It is but one indicator among a growing group of them that are diverging the bull market. The bank index led the S&P 500 from late 2011 and kept the picture bullish by making higher highs and higher lows in late 2012 during the Fiscal Cliff Kabuki Dance, when the world was supposedly ending.

We have gone over and over BKX-SPX, and that is because it is relevant to the Fed’s ‘taper’ regime, which would have theoretically benefited the banks with rising long term yields vs. ZIRP pinned Fed Funds.  Yet in a grand contrary play long yields have dropped despite the taper, despite the Great Promotion Rotation and despite the stock bull market.

If BKX-SPX was relevant in keeping the picture bullish during the times (Q4 2012) when everybody was concerned about the economy, what on earth is it now with a revving economy (today’s ISM Services is strong… hey Janet, let’s get a surprise Fed Funds rate hike… ha ha ha) as it makes lower lows?

Oh I know, maybe it is no longer relevant.  Or just maybe it is.