Surveying Financials Sector ahead of Bank earnings next week

I continue to see the US stock market as being attractive, technically speaking, and do not feel sufficient risk is there to warrant a selloff at this time. While price action has been a bit choppy in the last couple weeks, there remain precious little other evidence with regards to frothy speculation to excessive valuation measures that would warrant a major selloff.  Rallies up to SPX-5350-5400 look likely into mid-April before a consolidation gets underway.  Treasury yields and US Dollar should have limited upside after this bounce, and both look close to rolling over.

Despite this past week’s minor weakness in US Equities, it’s worth remembering that US markets have only experienced five down weeks in the last five months’ time.  Friday’s rally helped SPX recoup about half of the week’s early decline and seems to have repaired the minor technical damage caused by Thursday’s drop.

Large-cap Technology continues to hold up quite well despite QQQs underperformance vs. SPY in recent months, and Friday’s strength looked like an important signal that a bottom to this recent consolidation could be at hand.

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