On Thursday the viability of the recent bank rally was called into question after bulls encountered strong headwinds in the form of weaker than expected U.S. economic data and mixed comments from theEuropean Central Bank chief.

Specifically, ECB President Mario Draghi said the euro zone economy continued to face great uncertainty but saw some signs of stabilization.  Also U.S. retail sales rose at the weakest pace in seven months in December and first-time jobless claims increased.

If the latest developments call the recovery into question – the rally in the banks will be among the first catalysts to land under a microscope.

How should you trade bank stocks considering the sector climbed more than 6% in less than two weeks.