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The Big Bank Sell-Off


Not all overbought conditions are created equal.


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community.

A sell on the big banks -- Citi (C), JPMorgan (JPM) Wells Fargo (WFC), Bank of America (BAC) -- has taken the futures from up 7 last night to down 12.

Anticipating when a pullback would begin has been a tough proposition. Not all overbought conditions are created equal.

Although the market momentum has shrugged off all bad news and excuses for profit-taking in the last 4 weeks, reversing quickly within hours or a single day every time the Daily Swing Chart turned down, the market apparently doesn't like Mayo -- Mike Mayo, that is -- who launched coverage of traditional bands with downgrades this morning.

In addition, earnings season is starting, and companies have for the most part walked away from guidance. They may be apt to be surprised. The reaction to earnings will determine whether we get a multi-week correction.

On Friday, the market closed above the key S&P (SPX) 833 level, which is 270 degrees up from the low. But not all breakouts are created equal. As offered last week, Friday/ Monday squared out at 853, while the end of the first week of April sets up a possible high to high to low to high sequence.

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