Don't Forget The Last Time The Bank Stocks Dived Before The Market

This has been a popular question for investors: Can the market rally without banks?

Perhaps a better question would be: Does the bank selloff presage another big market selloff?

Between the flattening curve, lower market volumes (affecting Wall Street) and now the foreclosure crisis, the weakness in the banks is starting to really accelerate into selling.

This chart from Doug Short gives a nice look at the historical connection between bank stocks and the broader market.

Remember what happened the last time when banks sold off first.

banks chart

Photo: Doug Short

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