XLF trade ideas
!XLF Re-Entry: 13:04:38 (UTC) Tue Jul 14, 2020With YoY% declines from some of the biggest financial institutions in the world today, I will be taking the XLF sector ETF short today.
T-Note Shorts Comfort Financials Financials (XLF) are down 22% so far this year, one of the worst performing sectors second to Energy (XLE). Financials report Q2 earnings this week, kicking off today with JP Morgan, Wells Fargo, First Republic Bank and Citi. It’s worth noting that Smart Money Hedgers are heavily net short the 10 Year T-Note which could offer some ground for the financial sector (XLF) and give it the nudge it desperately needs to start heading north. Current bets on rising rates will also add fuel to this theory.
Earnings tomorrow (15/07/2020) Bank of New York Mellon, PNC Financial Services, US Bancorp, Goldman Sachs Group. Wednesday 16th July starts with Bank of America, Charles Schwab Corp, Truist Financial Corp and Morgan Stanley. And to close the week on Friday we have Citizens Financial Group, Regions Financial Corp, Progressive Corp, BlackRock Inc and State Street Corp.
XLF at a Decision PointThe XLF is a major decision point. It's at the end of a wedge within another wedge. The solid green line at the bottom is flag support. XLF needs to maintain that flag support or it will take a trip to below $22.
Bank earnings are tomorrow. JP Morgan and Wells Fargo will set the tone for what earnings will be like. RTY and ES' fate now lies with the financial and transportation sectors.
That's why I didn't trade today. Too much uncertainty to what will happen with JP Morgan and Wells Fargo in post-earnings. Something tells me the pullback is not over yet.
Financials Looking Good $XLFAMEX:XLF
Financials are looking good mostly thanks to Uncle Jerome's aggressive stimulus plan and banks of course "being too big to fail". With that said, there are several key players ($GS $JPM) in this space that are also at the forefront of financial services innovation and strong cash flows/liquidity. All of this paints a pretty bullish fundamental for the short/immediate term and with the additional announcement of a potential round 2 of stimulus checks... Money Printer go Brrrrrrrr?
From a technical standpoint, we are are about to breakout from a symmetrical triangle to the upside. My target is $25 with movement happening by 8/6. Hopefully the mods leave this up for you guys.
- PennyBag
TRADE IDEA: XLF AUGUST 21ST 20/23/24/27 IRON FLY... for a 1.51 credit (.38 at 25% max).
Notes: 5 out of XLF's top 10 holdings announce next week, so this is a way to get a piece of that volatility without getting into single name, with a classic risk one to make one iron fly setup. I've split the shorties across current price, but would look to take profit at 25% max, as you would with a short straddle/iron fly. Naturally, you may have to adjust the strikes, depending on what XLF does early in the week.
For those who like to trade naked, the August 21st 23/24 skinny short strangle was paying 1.90 (.48 at 25% max) as of Friday close.
XLF Analysis XLF Bullish Confluence across TA, Dark Pool orders, Options Flow and Volume ( Contracts to buy 7/17 25c or 10/16 28c)
Volume Before Close: 1min-2.633M (1st), 5min-5.298M (1st), 15min-9.295M (3rd)
Dark Pool Orders: 6 Orders (144 Million)
Options Flow: 9 Sweep Orders (654,000) 3 Block Orders (365,000)
No Bearish Flow
TA Below
The most important picture of allWhile most traders and market analysts seem to be glued to the short term, I believe this longer term picture of the financial sector is crucial. In my eyes, the structure that has formed since the Feb 2020 top greatly resembles the topping pattern of the GFC with respect to price action and RSI divergence, except it is clearly a larger structure. Therefore, the most likely scenario is that the market is about to resume its descent with much greater intensity within a couple weeks. If we are lucky, then it will eventually be supported by the 2008 lows. However, I do see the possibility that this will become a degree of crash greater than the GFC, comparable to 1929 or even greater than 1929, especially because the initial selloff volume spike was so large.
IMHO, the most unlikely scenario is this 'V' shaped new bull market scenario that the majority seem to be adopting now. Economic fundamentals are too trashed, and bullish sentiment and speculation is much too extreme for that to happen right now. There are basically 6 stocks holding up the entire market at this moment and they are about to top according to Elliott analysis. This entire rally seems to be all hype with no reality priced in.
XLF also looks good on dailyBut likely up first then down and close the week in green. So don't be too greedy on weeklies.
$XLF Long - Three Inside UpThree Inside Up pattern observed on the 4-hour chart of XLF. This is a bullish reversal pattern.
Trump taxes, S&P 500 and FED Balance sheetS&P 500 finally has a setup. And FED balance sheet is magically still going down. Let's get in here.
In the news now, we see that Trump's tax returns may be made public, but probably not, at least not before the election. But the real news now is the liquidity. FED isn't printing. Congress hasn't started flooding liquidity from the Treasury General Account.
XLF Almost time :)
Which way will this go?
imo best to wait for a secondary confirmation as HP always says
Financial Sector Made a Decision TodayThis is the XLF chart at the 30 minute view. The XLF made a decision today between a downtrend resistance and a rising support.
It chose to rally with the banks' earning season coming up. That's what caused the ES to pop up in the afternoon.
Buy Financial ahead of earningsFinancials showed relative strength with sales growth expectations above other sectors according to UBS June CEO survey
$XLF Long - Potential 5th WaveOn the 4-hour chart, the price poked its head up above the desc wedge that has been forming. I believe we have seen waves 1-4, as noted in the chart. I went long financials today for a potential wave 5.
XLF Short Position, !Copper Longs; 12:54:50 (UTC) Mon Jun 29, 20With lumber up 2.3%, copper has made a new higher high and I am not bullish on copper, for the current bullish phase transition to bullish. This relates to the fact that we should see nominal GDP remain muted, thus causing stagflationary economic environment for the time being.
13:05:08 (UTC)
Mon Jun 29, 2020
XLF is ready for a bounce!!!I went long at Fridays Close and bought some FAS. Little red right now but I'm expecting a nice rally next week or even Gap Up Monday! \
I'm seeing nice bullish divergence on the hourly and 4 hour charts. If it burns through its Bearish as hell!!!
