Hey, Ross here:
The major indexes pulled back again yesterday.
But what actually spooked the markets?
Today’s chart explains it.
Chart of the Day
This is the KRX – the Nasdaq Regional Banking Index – dropping 6.3% yesterday.
That was its sharpest one-day drop since early April.
The plunge came about after two regional banks – Zions Bancorp and Western Alliance – disclosed chargeoffs related to bad and fraudulent loans.
This led to widespread fears of what other unexpected losses could be hiding in these portfolios.
I’m actually not surprised by this at all.
In fact, a couple weeks ago, I shot a YouTube video talking about this very problem.
Right now, banks have roughly half a trillion dollars in unrealized losses on their books.
Thanks to accounting rules, those losses never have to be realized – unless depositors’ confidence falters.
To make a long story short…
I wouldn’t be surprised if we continue to see regional bank stocks take a beating as more investors wake up to the full scale of the problem.
This is also why I almost never buy banking stocks.
And I don’t recommend you do either.
The silver lining to all this?
While everyone is worried about a regional bank meltdown…
I’m here focusing on the areas of the market that are still surging.
Insight of the Day
Focus on strength, not on weakness.
So many traders love to focus on weakness.
Talking about how such-and-such part of the market is weakening…
And tearing their hair out worrying about it.
Now, I’m not saying you should stick your head in the sand and ignore such signs.
But as someone here to profit from the markets…
You need to be focused on strength instead of weakness
Because that’s where the money is.Despite what you’ve heard about market weakness, we are still consistently seeing more new highs than lows…
And that means one thing – breakouts are working.
You just need to know how to find them.
And that’s exactly what I’m going to show you in my LIVE briefing in just a few hours at 11 a.m. Eastern.
You see, when certain stocks are about to break out…
It usually exhibits a certain “tell”…
One that works even in the most uncertain markets…
Because it relies on detecting catalysts other investors may not know of yet.
I’ll explain everything in my live briefing later.
With everybody focused on weakness, let’s focus on strength
And go after the breakouts still happening right now.
Click here to guarantee your seat for my live strategy briefing if you haven’t yet…
And I’ll see you in just a bit at 11 a.m. ET.
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Editor, Stock Surge Daily
