Today at 5 PM EST on Mish’s Market Minute Daily Facebook page live, I introduced Prodigal Son, Regional Banks.
I began with a joke about a stock broker and a minister. Both show up at the Pearly Gates.
The stock broker gets a silk robe and golden staff, the minister a cotton robe and wooden staff.
When the minister asks why, St. Peter says, “While you preached, people slept. But while he invested, people prayed!”
Hence, Regional Banks earns the label Prodigal Son.
KRE, his ETF symbol, has periods of wastefulness coupled with periods of high productivity.
Regional Banks is a key sibling in the Modern Family because he measures the health of the U.S. Regional Banks, where many local folks put their money.
Today, KRE got a boost.
Were investor’s prayers answered?
In the cartoon, KRE, the Prodigal Son stands in his office at a Regional Bank. He tends to be Bullish on America.
He leans on his desk for support. He’s always ready to ask for forgiveness just in case he cannot do right by his customers.
His cat (or one might say KRE’s alter ego), on the other hand, has unabashed confidence that whatever the Regional Banks do is always the right thing at the right time.
KRE is a reliable indicator of what the Federal Reserve might do regarding raising or lowering interest rates.
Coincidence that KRE, which had been sitting dormant on the 50-day moving average, would gap higher and close strong ahead of the Federal Reserve Minutes due out tomorrow.
If I were Janet Yellen and gang, I’d be thinking time to strike while the iron is hot.
Bullish sentiment is high. The Russell 2000 (IWM) whom you met last week in cartoon form, trades above the monthly channel line and on new all-time highs.
Granddad IWM or father to Regional Banks, typically opens his arms wide to welcome back his Prodigal Son.
Even when Prodigal spends lavishly and returns home broke, IWM’s love is unconditional.
