Here is an updated chart I first posted in March to supplement a technical analysis by Chris Kimble: Banking on the Banks. Not surprisingly banks led the market crash in the Financial Crisis. In fact, the Bank Index (BKX) peaked on February 20, 2007, several months before the market topped out on October 9 of that year.

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The Bank Index closing low was on Friday, March 6, 2009, down 84.6% from the 2007 high. The broader market closing low came the following Monday. BKX hit its interim high on April 23 for a gain of 211.2% from the 2009 low. By comparison the Vanguard S&P 500 Index interim high, also on April 23, produced a total return of 84.1% from the 2009 low.

The question now is whether Foreclosure-Gate, as the latest financial dysfunction has been dubbed, will send bank stock collectively into an accelerated decline. And if so, will the broader market follow?

Whither the Banks? Or to pose the question more bluntly, Will the Banks Wither?