I’ll be the first to admit it: I’m old school when it comes to market analysis.
I was trained by traders who, in some cases, cut their teeth in the 1950s and ’60s. And they learned from people who were trading long before that.
This isn’t theory; it’s a lineage.
Today at TrendLabs, we use sophisticated models, proprietary algorithms, and more data than anyone 50 or 70 years ago could have imagined.
Technology has transformed how we analyze markets. But it hasn’t changed why markets move.
The same principles that worked decades ago – even a century ago – still work today. Markets evolve, but human behavior doesn’t.
And as long as people are making decisions, prices will continue to behave the way they always have.
Different tools. Same instincts. Same outcomes.
Financials Hit New All-Time Highs
We don’t get bull markets without Financials.
Some of the younger crowd has forgotten that – or maybe they never learned it in the first place. But plenty of market veterans forget it too.
That’s not an opinion. It’s just how markets work.
Financials are the plumbing of the system. If they aren’t participating, the bull doesn’t get very far. When bull markets are real, leadership starts here.
And yesterday, the S&P 500 Financials Index (XLF) closed at a new all-time high:
That deserves a spot near the top of any list of bullish developments in this market.
Most people are too busy obsessing over Tech to notice. Home-country bias. Recency bias. Pick your poison.
But everybody’s wrong when they ignore Financials.
We don’t have bull markets without them. And right now, they’re trading at the highest levels in history.
Whenever in Doubt, Zoom Out!
When I want real perspective, I zoom out. Noise disappears. Context shows up.
Here’s a long-term chart of Financials going back to the start of the century:
Notice how it took more than a decade just to reclaim the highs from before the Great Financial Crisis.
That breakout didn’t come easily.
Even after finally clearing that resistance, Financials still needed one more painful reset – the 2022-23 decline – to retest those former highs and complete the base.
That retest held. And last year, the move finally turned real.
Since bottoming in late 2023, XLF is on pace to finish its sixth consecutive quarter higher and has risen in eight of the past nine quarters.
This isn’t a short-term trade. This is a long-term regime shift.
When Financials spend more than a decade building a base and then break out to new highs, that’s not noise.
It’s confirmation that participation is broad. Confirmation that leadership is healthy.
And most importantly, confirmation that this bull market has real legs.
Ignore Financials at your own risk.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs