Weekly chart analysis - Harmonic Patterns Pay close attention to 40$
Two bearish harmonic patterns are in play here
XLF trade ideas
FINANCIAL SECTOR MELTDOWN IN T MINUS 3There is always a cause to an effect and the matter at hand is the markets are the textbook definition of OVERBOUGHT lower expectations so you can crush it, changing the definition of a recession so you can keep investors and of course the unknowledgeable stakeholders of the bank at ease this wont work the pressure will eventually burst the tank
especially with the coming rate hike
on the bright side while the pressure was building up they managed to reinforce and build a tank around the tank to reduce the damage and absorb the shock (the unusual rally in the QQQ n general market) yes this unusual rally in all markets might just safeguard a worst case scenario for that reasons the various zone are where id expect a continuation worst case senario it hits 26.55 yikes
imagine how much worse the other sectors will have it and of course the stocks in it (stocks will always yield X2,X3 more than the sector bull and bear)
that said im just going to show you where to short your money my speculation unfolds (hopefully it wont say the bulls)
1. THE AMEX:IAT
2. Once we know the AMEX:IAT dumping we look for bigger yields in its babies NYSE:WFC NYSE:JPM NASDAQ:PACW NYSE:GS NYSE:BAC check the diversified or regional cause they will yield X100 🤑🤑🤪😈😈😈 Id spot them out but i dont get credited enough for this shxxx so seek em out thats where the fun is
XLF breaking below a local demand line, rising top flat bottomRising top flat bottom channel. Two key support targets for downside. Technical analysis would suggest downside price action from here. RSI close to breaking below 50.
Watch the Banks - XLFAll information in the video. I think a turn for xlf is coming and it may be quite strong. Under 37.50 will be a marked change especially if they close the week below it.
Good luck!
XLF to sell off?Looking at XLF, we have had a good pump. Over the last few days the RSI has been burnt up and we are starting to see some bearish divergence as well as the price flattening. I would like to try to play this down to the green supply zone below, best of luck. It may keep ripping to the upper trend line shown.
Financials looking toppyNo position posting as someone requested. Notice price action peaked with vwmacd.. and is also showing bearish divergence. Again no position, only bank I would buy is NYSE:JPM
XLF- Economic update, Liquidity and Financials (chart heavy)J.C. Parets had a great post today identifying an 8 month high for AMEX:XLF financials and a break above its descending wedge.
x.com
This is a deeper dive into the technicals for the sector, beginning with a look at the broader economy and central bank liquidity.
Economic outlook
The economy remains resilient. Broad economic variables continue to expand. This chart monitors:
Non-farm payrolls
Consumption
Household employment
Real GDP
Gross industrial output
Real personal income less transfer payments
Note that real GDP and real personal income have descended from their highs but remain strong.
Liquidity is up
There is a high correlation between expanding and contracting central bank liquidity and risk assets. We see risk assets drawdown on a lagged basis when central bank liquidity tightens quickly, and expand when central banks inject liquidity. The end of September saw liquidity tighten to its lowest level since 2020. Equities drew down to a local low 4 weeks later. Central bank liquidity has increased by $100B over the past week and $500B over the past two weeks. Risk assets are rallying in correlation.
Note the XLF correlation with liquidity and with the S&P
Sector rotation
Sector leadership is beginning to shift. Over 13 periods, we can see
Leading - Tech, discretionary, utilities, industrial, and financial
Improving - Energy, staples, health care, materials
Rotation within financials
Looking at the rotation within financials we can see some predictable trends. When the market is fearful of the financials sector there is a rotation into $JPM. During recessions and market turbulence, JPM gains relative strength to the sector, regional banks, and other large US banks. This trend reverses during expansion.
We can also see progression when we compare the recoveries of XLF, IAK insurance sector, and a cohort of 3 large fintech companies. The cohort of V, INTU, and FI advance first, followed by insurance, and then lagged by the broader financial sector.
We observe a very consistent breakout among large influences to the sector with JPM, BRK.B and BLK.
Game plan
I'm looking for confirmation similar to what we saw with IAK and INTU. 65-70% of the time, we see breakouts of these formations retest the breakout area. From there I will look for opportunities between 38-39 to take profit. These align with the 1.618 and 2.0 extensions from the most recent retrace as well as a proportional movement from a measure within the pattern. The beauty of playing this pattern in this manner is that we can confidently set a tighter stop, as a full candle close back into the descending wedge will invalidate the opportunity.
XLF breaking out?XLF has had a pretty good month so far. Probably the worst sector is showing some signs of life despite issues with the banking system. This week XLF has poked its head above the triangle and the close was pretty good. Volume increased from last week as the down trendline was breached. Now, it is not a confirmed breakout yet as horizontal resistance is right above it and things are getting a bit overheated in the shorter time frames. It will be interesting to see how the pullback plays out. Markets are due for a nice pullback soon. If $31.5 - $32.5 area holds on the pullback then it might go off to finish the primary wave 5 sometime during the first half of 2024. This may also pull regional bank stocks that will benefit Russell and IWM.
Financial XLF CrashLast week was a bearish engulfing candle on high volume so it will continue this week. After 3 days of drop, prices reversed to hit some stops then continued down with the trend.
Target is Gap fill
XLF very bearishHi traders
XLF looks very bearish. Look at the daily candle from yesterday! No wicks. Bears are in a full control. Not expecting any short-term reversal on XLF yet.
Lower highs shows an on-going bearish distribution. Once we get a mark-down phase, XLF can drop even 10 % from the current levels.
Downtrending RSI confirms our bearish bias.
The target for shorts / entry for longs area is shown on the chart.
Good luck
XLF - Looking Very WeakFinancials charts have completely been rejected by the downscoping trend line.
A weekly bear flag looks like it's about to trigger and send price action much lower.
Since the daily chart is getting oversold, waiting for bearish consolidation is a wise decision if you are wanting to short.
With the rise in yields recently, it's clear the Banks net interest margins are being squeezed. Will we see another banking crisis?
The last time we saw the XLF close below the weekly 50MA, we saw a quick 10% drop.
XLFAnother rejection of the trendline and VWAP from ATH. Currently sitting on YTD VWAP. Another $31 test seems likely imo which would break the 200 sma. Can only bounce off that area so many times before it breaks through.
Financials Could Be Breaking OutFinancials have been in the doghouse since Silicon Valley Bank failed in March, but now there could be signs of improvement.
The first pattern on today’s chart of the SPDR Select Sector ETF is the falling trendline that began early last year. XLF’s rally through July battled against that resistance. It pulled back in August but has now pushed through that line again. Is the downtrend finally ending?
Second, the 50-day simple moving average (SMA) had a “golden cross” above the 200-day SMA in mid-August. That could also show a more bullish longer-term trend.
Third, the August low around $33.60 represented a 50 percent retracement of the move between early June and late July. Does that confirm direction is skewed to the upside?
Standardized Performances for ETF mentioned above:
SPDR Select Sector ETF
1-year: +4.02%
5-year: +21.36%
10-year: +117.73%
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The largest ETF focused on the financial sector, XLF, is indicatXLF's trajectory is akin to that of IWM, with the primary distinction being the emergence of a 'death hook' pattern on a notably larger chart. This amplification in scale should, in theory, enhance the pattern's precision.
Compounding the challenges for this sector, the price has dropped below both the 50-day and 200-day moving averages (MAs) with apparent ease. This breach signifies a concerning lack of support from these key moving averages.
Recent downgrades by Fitch and Standard & Poor's (S&P) of various banks are expected to exert a sustained negative influence on this sector. Furthermore, the financial sector faces issues tied to elevated interest rates and the persistently high yields of the 10-year Treasury note. Consequently, the sector's trajectory is likely to remain downward, potentially resulting in a breach of the lower trend line and triggering a substantial drop across the banking sector.
It's essential to consider that despite favorable reports from individual companies like NVDA, the broader market's performance heavily relies on the strength of both smaller companies and financial institutions. A robust market tends to hinge on the vitality of the banking sector."
XLFKeep an eye on XLF over the next few weeks. Breakout above the blue trend line would be bullish financials & ultimately the economy. Breakdown below $31 would be bearish imo.
XLF | SHORTAMEX:XLF
Possible Scenario: SHORT
Evidence: Price Action, Overbought RSI, Rejection on trendline.
TP: 30$
* All the markets are ready for a 10% pull-back
The Financials - back to the scene of the crimeTo the top of this channel again, and my guess is we go back down one more time. I'm thinking similar for the market - down for a nice drop and then a smaller bounce up to create more long term sideways action. The financials may outperform to the downside over the next few weeks/months, but should find support again around 31 - so a 20% drop is what I'm expecting soon. What would cause it? I have no idea.
$XLF Janet and Jerome wont let the banks failThey'll just keep pumping them up.... they start to struggle? no problem here is some liquidity.... its really quite terrible, but this setup on the chart is bullish as much as I dont like it.
XLF is aliveNothing better for financials than a FED hike pause. XLF daily chart is experiencing a 21/50 EMA crossover (purple converging with green line), has crossed above the Ichimuku cloud, and sits currently right at 200 day EMA (red line), which is also a key Gann level. XLF could reverse downward off this 200 day EMA, but there is a low volume profile above, so it has potential to rocket above into the next Gann line at 34.48. Given the apparent bullishness in the general indices, I give this bullish potential good odds.
Nevertheless, we are not out of the woods with financials in the longer run, should rates remain high, the odds of more financial sector defaults remains high.
Most important $$$ sector in the American marketWe are likely approaching the event that will finally close the bull!@#$ MMT chapter of investment banking. The XLF sector is the most important sector to monitor as the speed and magnitude of its decline will likely dictate how the rest of the sectors will follow. Despite what the FED, government and bankers want us to believe, the financial system is not stable. It is grossly leveraged in CLOs, CMOs, general debt and other corrupt forms of financial engineering, and it shall have to fall for balance to finally return to the financial world. This is exemplified recently by "sudden" collapses of fairly major banks like Silvergate, SVB and soon CS. My hope is the event will not hurt us, the people, too severely when it finally crashes to its final destination. All the green circles are important and possible pausing points, but there is no need to pause anywhere if there is a credit event. GL.
Us financial not looking in good shapeAs per weekly and monthly looks like a long term cycle coming to an end.
Green zone ...supply zone...
Red zone .. previous demand zone
Yellow zone... big boys might want this
Just a random guess.....
