💵 QM Trades: US Financials (KBE) Losing Momentum
Negative Short-to-Medium Term Setup Emerging
The US Financials sector — tracked by the SPDR S&P Bank ETF (KBE) — is flashing clear warning signals in our Quantmatix models. 📉 The combination of short-term deterioration and pending medium-term reversals suggests a sector that’s running out of steam.
🔍 The Signals
On 28th July, we recorded a Daily Score Reversal when our score stood at +5.2.
Today, that same score is sitting at -9.1 — a sharp deterioration. 🚨
We also have a Pending Weekly Top Quantmatix Negative Score Reversal, dropping from a +4.3 reading.
🛑 Key Technical Levels
Weekly Support: 52.94 — 4.6% below last night’s close of 55.50
Daily Support: Just 1.7% below current levels
Monthly Mean: 2.44% below current levels
This creates layered downside risk if momentum continues to weaken. 📊
🧠 Under the Hood
On the short-term timeframe:
❌ 94% of constituent scores are Negative
⬇️ 76% of constituents are declining
On the medium-term timeframe:
✅ 93% of scores remain Positive
⬇️ But 71% are declining
📉 17 negative reversals last week + 12 pending this week
This shift in breadth — strong long-term performers beginning to roll over — is a classic early-warning pattern. ⚠️
🏦 Notable Names with Pending Negative Reversals
Our Top QM model is flagging potential weakness in:
JPMorgan Chase (JPM)
KeyCorp (KEY)
Truist Financial (TFC)
Regions Financial (RF)
All are showing pending negative reversals on the medium-term timeframe.
📌 Quantmatix View
“With KBE’s daily score falling from +5.2 to -9.1 in just over a week and a pending medium-term negative reversal, we’re seeing signs of sector-wide fatigue. Breadth deterioration across both short- and medium-term frames reinforces the short bias.”
⚡ Trade Takeaway:
Bias: SHORT bias on sector & flagged names
Catalyst: Breadth deterioration + multi-timeframe resistance levels
Risk Management: Use technical levels for stop placement; watch for confirmation via further breadth declines