Banks and XLF look to have bottomed this past week, supporting a local bottom in US small caps. Stockspy1 noted that the Russell 2000 includes many regional banks, linking the banking-sector turn to IWM. x.com 

The US large-cap correction isn't over until interest rates top and bonds bottom, which hasn't happened yet. The summer 2023 S&P 500 correction ended right when bonds bottomed in October, with TLT trading massive upside volume, and there is no sign of that now. Higher rates keep pressuring real estate, where lots of money has been trapped since 2022, a possible source of downside dislocation, and an aggressive further rise in rates could bring a panic bottom. x.com  x.com  x.com  x.com  x.com  x.com 

Financials could be bottoming as major institutional accumulation meets extreme relative weakness. The Financial Select Sector SPDR Fund has been compressed near $50 for 17 months, saw its second record-level volume accumulation last month, and its six-month candle is sweeping lows while defending the largest institutional support on record. It is reclaiming its all-time-high anchored VWAP after a bullish engulfing candle, with no sell pressure. A drop back below $50.70 would be unwelcome. x.com  … Show more

Regional bank stocks will turn when bonds turn, with a target of 110 for the SPDR S&P Regional Banking ETF from around 68. The turn could happen any day, but the move to 110 should play out over several months, and focusing on day-to-day moves misses that. x.com  x.com 

Long-dated US Treasuries look favorable as the rise in 10-year yields appears mostly over; inflation searches have peaked, and only 13 of 29 tracked commodities are above their 50-day averages. x.com  x.com  x.com 

US financials could lead the market into year-end if the Fed signals at the upcoming FOMC that rates will stay higher for longer, as expected. The financial sector is breaking out on the weekly chart, and banks such as JPMorgan, Goldman Sachs, Morgan Stanley and Bank of America are quietly reclaiming trend and pushing toward new highs. x.com 

Utilities have lost a large part of their tailwind, because the Iran war has cut the odds of rate cuts this year, now likely priced at zero, when multiple cuts had been expected. x.com 

Long-dated Treasuries could rally after a Fed hike, because a hike could lower or at least cap the 10-year yield more than any other intervention at this point. The 10-year yield bottomed near 3.66% when Powell started cutting in September 2024 and has not returned there since. @lord_fed's point that the long end may rally after the hike, having sold off through the 2024 cutting cycle, holds. x.com  x.com 

US stocks and long-duration Treasuries face renewed pressure as the market now looks for the next potential rate hike rather than cuts, which is cause for alarm across the S&P 500, long bonds and small caps. This could be the final correction phase of the downturn that started in October. x.com  x.com 

Fintech stocks are the counterintuitive trade as rates break out, rather than the usual oil and copper. Treasury yields are rising, but credit spreads are falling, which helps fintechs, while wider treasury spreads help banks. x.com  x.com