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The regional banks have gapped down to a crucial level today. As you can see on their sector ETF chart (KRE) below, price has checked back to the rising 50 day moving average, as well as an important multi-year level around $27.50. We should get a good feel this week as to whether a deeper pullback/consolidation is upon us, based on how the regionals react to this level. The trend higher since last October is quite steep, and a shakeout to reset the trend would not surprise me here. If anything, the regionals may just need some time to take a breather in lieu of a steep price correction from current levels.
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