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XLF

HSBC Triple Bottom Dating back to 1996 $XLF $HSBC $Bank $JPM Why HSBC? HSBC Triple Bottom Dating back to 1996, they got a lot of cash on their books too so fundamentally, they are worth around $26/share. although they had shady practices n the past, if you want to pick a bank for long term investing, this is good value overall. Entry $23 area stoploss $20.90 1st target $24.4 2nd target $26 3rd target $32 What is Hsbc? HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments. The Retail Banking and Wealth Management segment offers personal banking products, such as current and savings accounts, mortgages and personal loans, credit cards, debit cards, and domestic and international payment services, as well as wealth management services, including insurance and investment products, global asset management services, and financial planning services.
NYSE:HSBCLong
by WallSt007
>BAD DAY FOR FINANCIALS<ElliotWaveFLATabc>3-3-5<CORRECTION<SHORTAs this title suggests. Things could get very bad for American Financial companies. We are directly at the cusp. 2 scenarios play out from here. This is the bearish scenario where we have JUST completed A 3-3-5 FLAT abc Elliot wave correction from v dumps. We should see another leg down equal to the V DUMP , dump from here. This will complete the 3-3-5 Correction on the larger timeframe. The Primary (yellow) ABC. ----- A = V Dump B = Rally to here (flat correction itself, just completed) C = Another drop 1:1 V Dump just beginning. --------- A one to one Fib Based extension of the drop puts us ... at the bottom of the chart there. The C wave completion Down. ---- Pull out your shorting pants chaps. One robot fist at a time.
AMEX:XLFShort
by thatsblatzphemy
2
Easiest Trade, fundamental calls for pull backWe have artificially propped up market condition with high prices and low volumes on any matrix. Financial sector is not untouched by it. Recent rally in financial sector feels more like a speculation than value investment. But we're all allowed to speculate so power to all market participants. However the rally calls for pullback and there's a easiest trade case to be made about FAZ which is 3X leveraged Financial Bears ETF. with great upside returns due to a pullback on fundamental levels. Be aware leveraged ETF is not a product to hold for a long time so quick returns enthusiast should understand risk before buying. Good Luck !
AMEX:FAZLong
by Onewestsideq
2
WELLS FARGO ($WFC): Are They Gonna Send this Back to the 1800's?✨ New charts every day ✨ Like, Comment & Follow to help the community grow 🎉🎉 --- Depressing revenue and earnings predictions and a potential dividend cut aside, it is hard to justify shorting the big banks. Despite this, Wells Fargo's chart looks particularly bearish. While it is likely WFC will preform well in the future, it looks like for now this company founded back in the 1800's is about to get sent back to the 18.00's or lower. Given that, let's look for a short setup. Resources: www.earningswhispers.com + www.marketwatch.com --- 1. Fractal Trend is showing a downtrend (Maroon bar color) on the Daily timeframe chart. This makes sense given how the big banks have struggled in terms of share price while dealing with COVID. 2. With this strategy, we are looking for short setups in a downtrend and as such want to enter short on retests of bearish order blocks plotted by Orderblock Mapping (Maroon) and/or bearish S/R levels plotted by Directional Bias (Maroon). 3. As you can see, we are close to getting a short entry from the strategy at R1. The goal here is to see a rejection of this level and continuation to the downside. 4. The target for this move is S2, although we will look for reactions at S1 and consider scaling a portion of our position off there to lock in profits. 5. We will exit this trade if our stop is reached or if Fractal Trend signals an uptrend (Aqua) while our trade is still open. With all that said, it should be noted that a drop of this magnitude for the big banks represents a move not seen since 2009 back in the wake of the Financial Crisis. Thus, even though the setup makes sense, it also makes sense not to be overly aggressive with this short's position size and consider it more of an overall market hedge.
NYSE:WFC
by AlphaBotSystem
5
Lower rates = worse bank profitability.Hey. I'd like to talk about the effect of lower interest rates on something called 'net interest margin'... In other words, how banks make money. The chart attached shows US commercial banks' net interest margin (blue) versus the target Fed Funds range (white). Net interest margin (NIM) is a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), relative to the amount of their (interest-earning) assets. What can we see from the chart? As the Fed Funds target range decreases, bank net interest margin does as well. Currently, there is talk of going negative, and just last week, Fed Funds futures priced in negative rates for the first time ever for the Dec 2020 meeting and the Jan 2021 meeting. This is important. See, if people are of the opinion that lower interest rates will lead to less bank profitability, then they are likely to short financial stocks. And if people are shorting financial stocks, it can lead to a decline in lending and liquidity in the economy - which leads to dampened demand. Over the last few years, a type of bond known as an AT1 (Co-convertible) has been used to try to sure up bank common equity tier 1 (CET1). This gives regulators a gauge of strength of the financial institution in question. It works like this... The investor buys the bond, and if the share price of the bank falls to a certain level, the bond is converted into equity to prop up the CET1 of the bank. The problem is that these investors (mainly hedgefunds and sophisticated investors), are alpha seeking... In other words, they will hedge the delta of the decline in their bond by shorting the bank stock. This creates a bit of a doom loop on two fronts, firstly by removing the validity of the AT1 instrument, but secondly, the decline in net interest margin leading to the shorting of bank stock and the incapability to adequately lend. Markets and economies function on liquidity, and without it, we are in serious trouble - which explains the lengths to which governments and central banks have gone to liquify *everything*... And why equities just keep going up... See lower rates and more QE lead to equity risk premium compression - that is, the premium paid to take the risk of investing into higher risk assets versus simply staying invested in riskless assets (such as government bonds) - and ends up with investors piling money into equity markets. If the perceived risk of investing into equities is a tiny bit greater than staying invested in risk-free assets, then you will get into equities. This is exactly what has happened over the last 10 years - and it's why the market threw a fit when the Fed tried to raise back in '18. Passive long strategies have become the norm - buying ETFs such as $SPY and simply holding - and this also affects bank profitability; less trading = less commissions paid to the dealer. This is one reason why so many banks have moved into high frequency market making activities - Volcker prevented them from prop trading, but allows for market making (which in the high frequency trading area is largely still prop trading, although trying to prove that is tough). Jerome Powell is expected to push back against negative rates tomorrow, and the rhetoric leading into this from Fed members has been that they do not like negative rates. It remains to be seen, but real yields across the curve from 1y-30y are currently priced negative... So what's the difference, really? (tongue in cheek).
F
by FinkPro
9
XLF - Financial sector SPDR S/R zonesHello traders, Description of the analysis: The financial sector is showing an attempt at stabilization, but so far there is no talk of stabilization. We see gaps up and down. It is necessary to wait for a clearly defined volume distribution. Gaps tend to fill sooner or later. The way up again will be hampered by marked resistances. At the moment, I would be very careful to invest in this sector. About me: Hi, my name is Jacob Kovarik and I´m trading on stock exchange since 2008. I started with a capital of 3000 USD. My first strategy was based on OTM options. (American stock index and their ETF ). I´ve learnt on my path that professional trading is based on two main fundaments which have to complement each other, to make a bussiness attitude profitable. I´ve tried a lot of techniques and many manners how to analyze the market. From basic technical analysis to fundamental analysis of single title. My analytics gradually changed into professional attitude. I work with logical advantages of stock exchange (return of value back to average, volume , expected volatility , advantage of high stop-loss, the breakdown of time in options, statistics and cosistent thorough control of risk). At the moment, my main target is ITM on SPM index. Biggest part of my current bussiness activity comes from e mini futures (NQ, ES). I´m trader of positions. I´m from Czech republic and I take care of a private fund (4 000 000 USD). During my career I´ve earned a lot of valuable experience, such as functionality of strategies and what is more important, control of emotions. Professional trading is, in my opinion, certain kind of mental training and if we are able to control our emotions, accomplishment will show up. I will share with you my analysis and trades on my profile. I wish to all of you successul trades. Jacob
AMEX:XLFLong
by Jacob_Kovarik
THE WEEK AHEAD: WFC, C, JPM, BAC EARNINGS; XLF, IWM, XLU; /CLEARNINGS: And ... we're back into earnings season, which ordinarily kicks off with a bunch of financials. Generally, I don't play these for volatility contraction, since they don't get all that frisky generally, but this environment is a tad different from quarters past, with the 30-day in WFC (45/76), C (44/91), JPM (41/63), and BAC (40/70) all greater than 50% and with the sector exchange-traded fund up there as well (XLF (47/58)). Rather than play one of the single names, I've pondered what could be done in the sector exchange-traded fund, XLF, instead. Pictured here is a long-dated XLF call diagonal with the back month at the 90 delta in June of next year, the 30 delta-ish front month in June of this one. Ordinarily, I don't go that far out in time with the back month, but June '21 happens to one of the expiries with the lowest implied, so it will be one in which the 90 delta has a lower extrinsic value baked into it compared to expiries of shorter duration. Costing 8.36 at the mid price, it has a break even of 23.36 versus 23.38 spot, a debit paid/spread width ratio of .76, and delta/theta metrics of 58.64/.77, so it's neutral to bullish assumption with plenty of time to reduce cost basis via short call roll. You'd be paying 8.36 for an 11-wide, so have a max profit potential equal to the width of the spread (11.00) and what you paid (8.36) or 2.64 ($264) -- about 31.6% return on capital, assuming max profit. Naturally, it would have been more awesome were one to have gotten in at the 3/22 17.50 lows. EXCHANGE-TRADED FUNDS WITH 30-DAY IMPLIED GREATER THAN 50%: XLU (52/52) XLE (47/75) SMH (43/57) GDXJ (41/81) EWZ (40/74) EWW (39/58) SLV (34/50) XOP (33/100) USO (32/128) GDX (28/62) BROAD MARKET: IWM (53/54) TQQQ (47/122) QQQ (40/42) SPY (40/41) EEM (35/40) EFA (31/35) FUTURES: /NG (78/73) /ZW (69/36) /GC (41/31) /ES (40/42) /SI (34/48) /CL (32/1555) /ZC (29/32) /ZS (21/20) I reference /CL in the header, primarily due to the background implied, but also due to price action. Some of the volatility may piss out at futures open given a supposed agreement by OPEC+ to cut production by 10 million bpd or so, with the last holdout -- Mexico -- coming on board. If we revist $20/bbl., I will consider adding /CL out-of-the-money short puts. VIX/VIX DERIVATIVES: What's new ... . We're in a high volatility environment and in backwardation with VIX finishing the week at 41.67. MUSINGS: In The IRA: Things aren't looking all that great for me from an acquisition standpoint with the short put ladders I stuck out there for things on my shopping list -- at least for the April "rung" of them. That's okay, since if they expire worthless, I'll keep the premium associated with that rung. Naturally, if I don't pick up jack via assignment, I'll look at re-upping with a rung to replace the expiring worthless if that happens or just let the remaining rungs ride and look for opportunities going forward. A lot can happen in a week ... .
AMEX:XLF
by NaughtyPines