The first chart below is of the daily timeframe for the BKX, Bank Index. The pattern we have seen over the past few sessions could be argued as a bear flag, churning along the 20-day moving average and ready to break much lower. However, it is important to take a look at the larger timeframes for perspective, as well.
The second chart is of the weekly timeframe, which is sporting a bull flag. As has been the theme of recent blog posts, bearish patterns within the context of overall uptrends often serve as vicious traps for bears. It will be interesting to see how this one plays out, but so far the sharp resolution lower has not yet materialized.
Moreover, financials are showing good relative strength to the market, once again.