Since the first of this year, banks didn’t have much to brag about, as they lagged the broad market to the upside. While lagging, they potentially built a base that could reward the owners of banks for a while going forward.
Below looks at the Bank Index (BKX) over the past 6-years-
CLICK ON CHART TO ENLARGE
Potential that the sideways choppy action in the BKX index this year was an upper-level base to spring higher off of.
With stocks blasting off the moment today's stellar ADP report hit (even if subsequent PMI and ISM soft data roundly refuted the highest surge in private payrolls in over two years), pushed higher by the momentum ignition in USDJPY, some traders have declared today the day the reflation trade has (again) come back.
What a difference five days makes.
Recall last Wednesday evening, when none other than Goldman decided to be the latest to piggyback on gold's torrid momentum, by saing "there’s scope for the gold price to extend much higher over time." This is what Goldman's chartists predicted:
Back in November, for the convenience of those "who can't wait to take the other side of Goldman's clients, and thus the same side of Goldman's prop desk" we previewed Goldman's "Top 6 Trades for 2016."
Naturally, we explicitly stated that the "the best trades for 2016 will be to... do the opposite of the Top 6 trade recos" for obvious reasons.