Introduction to EW Theory - Planning the first analysis - Part 2The XLF weekly chart corresponds to the example of our article "Introduction to Elliott Wave Theory - Planning the first analysis - Part 2".
XLF trade ideas
Do we hold go higherAll up to XLF , I say we hold some story will come out big question is how far can we rally 295 is easy but can we get thru we are still basing here and in down trend, but lets see next few days.
Stay hedged though i am out all short but have TVIX .
We break 295 long king Kong to 302 maybe higher maybeIts all up to banks, like i said before we break that 295 boom we go, but we have not broken yet. Witting see happen Tuesday Monday Holiday, market back normal by wed we will know. I have orders buy spume SPY GS LONG
Watch CAT guys
XLF fib extension chartpush to resistance around 27.50 or failure and to the downside to retest support
yield curve inversion... prepare for gamma riskall good things have to come to an end, but man o man. the banks are about to loose all resemblance of control. im a vix trader, so when i see the yield curve i instinctively see a commodity curve. when the front month risk is worth more than the back end risk ie gamma jamma. the perception to participants is to sell the front month buy the back month. in a normalized curve you'd want to buy the front end and sell the back end. the spread between would cause natural decay/ lower volatility. with the front end above the back end, risk is forwarded creating the likelihood of outsized moves. while in consolidation i say brace for an epic downside shift, but post downside shift sell outside call spreads or butterflies. right now, we're officially on borrowed time
Correction for XLFFinancials are looking to correct. This coincides with S&P 500.
We will more than likely bounce off of support.
The fin.sectorThe financial sector is well known as the lifeblood of an economy. Financials have dominated the markets over the past years with their uptrend.
If we take a look at the XLF, Financial Selected Sector SPDR Fund, for example, we can see an uptrend in this sector since the end of economic crises. Just in a 5y XLF is up more than 22%.
Note that the price movements in this sector can lead to major cyclical moves. The current prices and the growing sense of geopolitical tension could be a reason to re-evaluate exposure there.
XLF failed breakoutXLF has failed its breakout and lost the 20 dma on heavy volume. Seems to be reacting to the expectation of more rate cuts which are not favorable for banks. Looks like it could sell off into the 200 dma which has some confluent fib zones and is at a price volume pivot.
Financials - Upward BreakoutFinancials broke out of its recent range today, entered half position in $FAS and will enter the other half on tomorrow retrace if there is one.
If not, will look at how the price action plays out. More updates to follow.
FINANCIALS JULY MONTHLY 2019 (DETAILED-END OF THE CYCLE TA)One major detail that stands out is the 30-31$ resistance. In order to continue its bullish run it must close above these levels.
Although this might be a tough task since we are in the late stages of the cycle. My focus in the next year will be this exact sector, since most banks will not be able to hit the same profit margins due to the inversion in the T. bonds yield curve(unless they take on more leverage).
Systematic risk(Beta) has overall increased, because of the trade uncertainties with China.
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XLF ShortBought weekly puts here cheap. Looks toppy, hit resistance, and why the heck are financials rallying while rates are inverted?!?!
Small position.
xlf in a popular retreat zone. may be good hedge, or shortHeres some interesting spots on chart. xlf been lagging. similar to iwm.. which looked to be backing out of similar resistance zones.
May pickup some puts to add to my rally for nothing hedge.. Keep waiting to hear why we're back up here. fed rate that never changed? trump deals that never get made? earnings revisions everywhere.. so much debt.. etc
Seems this or iwm reacts stronger to downside, vs spy or vti.. Some may consider this a warning that there is downside risk mounting.. others on the trump train just see more money to harvest. Not sure where i stand. I guess id say im not convinced. But eager to see what happens.
Double Top and profit taking XLF has reached to the final target zone of a bullish setup (posted in my Facebook page)
Now, with a double and a resistance zone, we can see some pullback (or even a strong bearish wave).
This can be a warning signal for stocks...
SPX also struggles to close in new records highs territory - Back below 2960 and generates a potential false break and a potential daily Pinbar (still a couple of hours to the daily close)
Warning Warning Warning - Trump and Powel in need for the rescue
XLF: Strong buy opportunity.The Financial Select Sector SPDR is trading within t 1D Channel Up (RSI = 64.631, MACD = 0.090, Highs/Lows = 0.4050) and todays pull back is only a technical reaction to the RSI approaching 70.000 on 4H. Both the MA50 and MA200 are supporting which is a very bullish development. Our TP is 29.10.
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US financials bearish outlookNot an easy call. Technically it is more probable XLF to break the upper trend line and resume the bullish trend. But this is end of cycle so the upside is limited in my view with the rates being sqeezed, FED balance sheet tightening.
not feelin JPbanks aren't feelin the fed at all, lose that 50 day and im short. smell a hard fade comin.
good level to be short against in banksus banks know theyll soon be going the way of european banks, with rates at 0 even negativefor an extended time. Central bank manipulation may boost loss making tech stocks, but financials going the way of the dinosaur
XLF 21-Jun-19 Call Credit SpreadXLF 21-Jun-19 Call Credit Spread
30-Day IV: 19.0 +0.6
IV Pct Rank: 74% Elevated
+0.31D Long 1 Call: 27 Strike @ $0.24
-0.62D Short 1 Call: 26 Strike @ $0.77
-0.31D Credit: $0.53
Trigger: Unusual Option Volume
Target: 50% Credit or 11-Jun-19
Short XLFLow rate environment and flat yield curve have created an unprofitable environment for banks and financials.
In addition the recently dovish fed in a still tight labor market will likely increase inflation and marginal costs weighing on financial's and corporate companies' alike profit margins. These factors will make earnings and guidance difficult this coming earnings season (april-may).
From a technical perspective the financials have rallied with the market since the Dec. 24 bottom. XLF has underperformed as rates have fallen and now is hitting fibonacci resistance making a lower high with hidden negative divergences on the daily chart. AMEX:XLF
Expect momentum to turn downward and earnings and guidance through april and may to only serve as a catalyst for lower prices in the financials sector.
