As it turns out, the banks didn’t die.
The reports of their demise were greatly exaggerated.
And Financial Select Sector SPDR Fund (XLF) is rising toward the long-term moving average:
We could see a possible Buy trade on this ETF soon.
While we wait, we need to ask a question: If the bank crisis is over, what will do well?
The answer: tech.
When rates are low, or dropping, tech thrives. It’s easy for tech companies to get money at low rates and, thus, it’s easy for fast-growing companies to expand. Rising rates puts a huge money crunch on start-ups (and tech in general), which is why we saw so much bloodletting in tech over the past year.
But that might be changing. Traders are guessing that the rising rate environment is changing.
And tech stocks have been soaring.
Here’s a computer software company, HubSpot, Inc. (HUBS), that’s been hot and is in one of the hottest sectors:
If it breaks above $421.50, it could go on a big run.
The last time it broke above the long-term moving average, it rose over 300%.
Happy trading,
Scott
