During the past few weeks, we have been posting the Banking Index chart with a discussion about its impending breakout from a triangular pattern. 

As you may recall, the implications were for a 10%+ down move if it broke to the downside.   As you know, it broke to the downside, BUT ... we pointed out that a historical oversold pattern showed up at the same time.

Each previous, oversold pattern occasion, was a bottom for the Banking index and it moved higher from there.  I previously mentioned this because the Banking Index's Ultimate Oscillator reached a level of 27.9 on August 11th.  

At that time we said, if the pattern of the past three occurrences held, it would infer that the Banking Index had hit a short term bottom and would move up.   However we said, "to replicate the previous patterns fully, it needs (the Ultimate Indicator) to continue moving up to over 50 on the indicator scale now."

Well, at 11:30 AM last Friday, the Ultimate Indicator finally made it above the 50 level.  So, we have a positive short term bias springing off a two week positive divergence.  

Note: Sounds good, except for the fact that this pattern does not share the same strength that the 3 previous patterns had.   All three of the others immediately moved straight up and above 50.   This move had little strength and waddled around for two weeks before managing to get above the 50 level.

The good news is that it broke above an eight day resistance line on Friday with a short term upside bias.    The bad news is that the strength remains negative and very weak.  

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