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Springsteen Still Has It

I've seen Bruce in concert a couple of times and its always a fun show. The audience gets into it and he plays for over 3 1/2 hours. This 12 minute halftime show had to be tough for him to plan.

The chart above is the 20 year chart of the S&P 500 with a chart of the relative performance of the banks in relation to the S&P 500 (the black line). You can see how the black line always leads the overall average. One of the various indices we track is this relationship of the banks to the broader market.

You can see the fall in the black line in 1998 preceded the fall in the S&P in 2000 and led the recovery as banks began to outperform. You can see that the banks began to underperform in mid-2006 before the S&P started its fall in late 2007.

One thing is certain in this bear market: like all others since statistics were recorded, we cannot have a new bull market in stocks without the banks outperforming the S&P 500 for at least six weeks. Don't look for that to happen anytime soon. Read the earlier post that discusses how we plan to manage the current trading range within this bear market.

Getting back to the halftime show, Little Stevie Van Zant isn' that little anymore – too many years eating pasta on the Sopranos instead of running around on stage, I suppose. No matter, as soon as the banks turn the corner and begin to outperform the broader market on a relative basis, the stock market will also be born to run yet again.