Philly Bank Index (105.22)

It's like hanging onto a tiger by the tail. Yesterday the Philly Bank Index recorded a ridiculous ten-point spike low before closing less than half a point below its previous daily close. It's not the first time this index has left a disgusting price spike in place for the record.

The Philly Bank Index has had a long affinity to the important 100-point century level on the index. Between 1998 and early 2004, the index worked away below 100. In the spring of 2004, the index finally closed above the 100 barrier for the first time, and thereafter it proceeded to straddle the century level (100) until late 2005.

Since then it has driven along above 100, until yesterday's huge downside spike fell into place. The spike low was recorded here as 94.26, so for the record we are back to straddling the century mark (100).

A lot has happened in the brief span of time since my February 11th, 2006 Bank Index comment. At that time, I was looking for base building, and we got a short term rally instead. On February 11th I finally moved from a neutral longer term stance to a positive outlook. Now I have to go back to a neutral long term view. It looks to me like we won't get away from the 100 area for awhile yet.