The Banking Index topped out already in mid-October and has since declined. Since early November a big Bear Flag has been bulding and the Banking Index has now broken clearly down from this formationen. Is should only be a question of time before support at 41.42 is broken for a decline to at least 35.89, but more likely we would see 32.85 - 33.20 area.
Remember that the Bank Index is a leader, and therefore could foretell that the bigger indices is close to there tops.
Yesterday I warned about a possible truncated top(Elliott Wave Principle page 35). We still need a break below 10,398.70 to add confidence to that view and even better a break below 10,328.29.
Finally the possible "Diamond" top in the S&P 500 I showed a couple of days ago is still a possibility - It's not the most pretty I have ever seen, but pretty doesn't necessarily equal the best...
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