XLF trade ideas
Holding Short positions. Weakness on XLF & Financial sector.Holding Short positions. Weakness on XLF & Financial sector.
Banks to bring the whole mkt downXLF barely holding up in bearish trend. This is a true Canary 🐤 in the coal mine and barely breathing to survive. All bets are off on indices if this breaks $21.20
New Relative Lows For Fins & Utes vs $SPY - What's Next?Hearing much buzz about the fresh relative lows for Utilities and Financials vs the S&P 500 $SPY this week... these relative trends typically don't move together so at some point one is likely to give...
Considering the underlying downtrend in Financials vs Utes, my bets on Fins underperforming and $XLF breaking to new lows vs $XLU... This is likely to happen in an environment where stocks in general are not doing too well.
Check out the chart of Broker-Dealers & Exchanges $IAI trapped beneath long-term resistance in the "related ideas" below - This also does not bode well for Financials as even their strongest subsector is currently trading below significant overhead supply.
Moving SL and adding new positions $FAZ. Short $XLF.Moving SL and adding new positions $FAZ. Short $ XLF. I expect a deep pullback on the S&P, DJI and Nasdaq index.
Short XLF not because it is hard, but because it is easyIts top two constituents by weight, JP Morgan and Berkshire Hathaway's (stinky) B shares, have been performing very poorly in comparison to most stocks:
This along with XLK (tech bubble) and XLE (oil) are, to me, overvalued and must be denied higher prices.
XLF thougtsBigger picture wise, I think XLF should dip below 2015 low but not penetrate 08/09 low. So $14.9 is the first area I would think long.
I think we have have an opportunity here! $XLF $FAZI think we have have an opportunity here! $XLF $FAZ. Pullback on price action.
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
XLF Long Term ChartEveryone knows that we're gonna have issues with financials given all the bankruptcies that are going to happen with oil companies, restaurants, and other businesses.
The thing is, it took a full year for XLF to collapse from current price level to the bottom back in 2009. Much the same, I don't expect the market to hit bottom until next year....
What's amazing is how fast it dropped in Feb/March, not the whipsaw bounce we're seeing now. It's gonna be a long slow ride down...
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 ... .
XLF to Long, in Uptrend , Triangle consolidationCondition:
1. Downtrend line was broken by breakaway Gap (G1).
Start a new trend.
2. Weekly demand zone confirmed. (07/01/2016)
3. Triangle consolidation, near the uptrend line.
Entry in side Triangle: below 21;
or buy at next open if Gap breaks the Triangle downtrend line (G2)
Stop: 20.5
Target1: 24; risk/reward=1:6
Target2: 25; risk/reward=1:8
This is a trading school homework. I need 6 months to practice trading plan.
If you like it, thank you for your support. Please use SIM/Demo account to try it, until my trading plans get high winning rate.
Bear Flag Building in FinancialsLooks like a pretty clear bear flag in XLF. Financials have lagged the broader market on this bounce and I'd expect them to break down first. Should be a fantastic short opportunity.
Banks are drowning, bailout needed!US is swirling in a mountain of debts and with QE4 , they are printing more money to help shore up the failing industries, tourism, hospitality, oil, banks, airlines, etc. The debts mountain are getting higher and higher, breaking its previous peak year after year. And this is definitely not good in the long run when the bubble breaks!
Here, we compare the XLF ETF . Click on the Holdings and you can see the top 10 holdings which shows the list of financial institutions.
I expect more room to go down towards the support zone at 14.98 to 17.31 where it probably might have a pullback. Thereafter, we have to assess the situation and see if price action supports and heads higher or continue to go down.
Here, we see the legendary Warren Buffett spending 2.2 billion to buy back Berkshire shares in 2019. See, even someone of his level does not time the market as the price of Berkshire continues to go lower (meaning his 2.2billion purchase would incur a paper loss). But important lesson is he is buying them much cheaper though he does not know when it is going to bottom.
So, Citigroup and other banks are still a sell for me , for now.
XLF looks relatively betterI think it will bounce higher than other sectors. Just wait for timing. Current situation can not chase high.
XLF at key level - watch for bounce?XLF (Financials ETF) at a key level around 23.....long term trendline from 2011 (note RSI also at lows last seen 2011) and also within 4% of the Dec 2018 spike low support.
With the FED expected to slash and burn rates next week the worst of the decline for banks etc may be "in the price" and may see a bounce (short term) at least
