Beck goes on to note that the recent technical damage incurred by VFH will take time to repair and that there currently is not enough evidence to merit allocating fresh capital to bank stocks and ETFs.

Interestingly, weakness for bank ETFs in July has arrived at a time when these funds should be perking up. XLF has been the second-best of the nine SPDR ETFs in the month of July since 1999. [Sector ETF Ideas for July]

In addition to those ominous signs, there is this: Over the past 30 days, there has been positive creation activity in the Direxion Daily Financial Bear 3X Shares (NYSEArca: FAZ), according to Direxion data.

Financial Select Sector SPDR

ETF Trends editorial team contributed to this post.