XLF Financials in troubleKeep an eye on the rate inversion and financials. If this inversion gets worse or if financials break support then it's game over for the market.
XLF trade ideas
The #Fed Is Saying the Cycle Is DoneToday's FOMC minutes, and subsequent conference, was enlightening. The Fed has signalled that there will be no additional hikes in 2019, which the market had already priced in. Additionally, the Fed's quantitative tightening ( balance sheet reduction) will be tapered and expected to end by the end of September.
The bid-to-risk was short lived as the SPY and DIA closed negative, and QQQ was well of session highs. There was a frantic bid to treasuries, which The Macro Strategist have been advocating for months. Cyclicals have lagged the 2019 rally, and they received no solace from Powell & Co.
The problem with the Fed's complete withdrawal from monetary tightening comes at a time when, much like ECB's Draghi, was forced to admit the best of growth and inflation are beyond us.
Financials were slammed post-FOMC, and they will test minor-rally support of $25.86. The near-term TACVOL range sits 26.99/25.88 while the intermediate range 28.19/23.07 which would target to the downside.
Notice, XLF is tracking the eurodollar 2019 lower ready to price a lax Fed.
Warning signal for U.S stocks? Pay close attention to XLF today (FOMC) - Although it is currently testing support there's an option for a false break signal here.
If XLF won't close in green today after Powell's message, this can be a trigger for another short term wave (and potentially even a strong one) in U.S stock markets.
XLF will go downDowntrend is still valid. we got the correction from top 26.50 level. The price might move to 23.30
Financials $XLF weekly RSI broke out, options trade details:Financials (XLF) showing relative strength this week and a midday trade put on 50,000 April $27/$24 bull risk reversals for $0.26, top holdings BRK.B, JPM, BAC, WFC, C, USB, AXP, GS, CME, CB
Pair Trading Idea XLF / KREApplying some of the most popular indicators on the pair XLF/KRE shows an interesting pattern. While KRE has been clearly outperforming XLF since December 2018, a trend reversal seems to occur. XLF might catch up in the coming days and weeks.
Financials ... now.Current stock market rally has been driven by Tech and Financials ... thanks to the Trump Powell Put and the worldwide recurring or ongoing QE by central banks (ECB, BOJ, PBOC) ... while the FED seems to be on track, too.
Question is ... are stocks heading higher? Or will we see a massive pullback and retest the low?
200 SMA is clinging from above to the supply/demand zone.
$XLF Bearish to Neutral Perhaps some consolidation in this area to propel it over the downtrend line. Im staying away from this sector for now.
Financials are a good Proxy for this market $XLFDecision time is approaching in the Fins and they will most likely show the way for the rest of the market. Volume has been steadily falling indicating exhaustion is near, whether it is by buyers or sellers remains to be seen. Personally I favor buyer exhaustion, which would lead to a test of 200MA hourly and the fib at 24.85ish. Seller exhaustion would target 27.50. Break of the triangle is key, but beware fakeouts. Whichever way XLF decides, SPX should follow. Upwards it could squeeze as high as 2870, downwards the familiar 2500 area awaits.
Tech sector and financial sector analysisBulls remain in full control, I'm bullish until the 4hr trends change but I'm cautious as a bull given how extended we are on the daily and weekly charts. Make sure to watch my SPY video, already published, for a much more detailed longer term look
Financials (XLF) Bullish Wedge or forming Head of H&SFinancials have sputtered as of late, and this can be interpreted in two ways:
Scenario 1: This is a bullish wedge and because of expected future interest rate hikes financials will break out and create new highs in the $32 -$35 range for the AMEX:XLF . Supporting this is the RSI hit lows previously seen on 3/22 and all the way back to the beginning of 2016. Stoch has also recently hit a low and moving upward.
Further, the selling pressure has been strong but the stock has remained in the bullish wedge pattern.
Scenario 2: Selling pressure will break through the wedge formation and the stock will retrace to the ~$23 level. XLF has declined following almost every recent interest rate hike. Stock will retrace to $23 then bounce off support and subsequently fall after hitting resistance (previous support line for wedge).
In the market we are in, I would error on the side of the trend (bullish). However, based on the way financials have behaved as of late, I would not be surprised if scenario 2 would occur. Either way, breakouts either way could be quite profitable if the proper stops are put in place.
Financials Earnings?WHy is this in the green after a couple bad reports? I dunno, short it. WFC isn't going to do any better.
SPDR SELECT SECTOR FUND (XLF): Pivots, Supports & ResistencesFind Winning Trades In Seconds >> efcindicator.com (Special Discount)
SPDR SELECT SECTOR FUND (XLF): All The Pivots, Supports & Resistences
SPY, QQQ, and XLF face key resistance tests this coming weekThe oversold bounce is real and bulls have changed the daily trends to their favour, but the weekly trends have yet to change. Here's what I'm looking for heading into next week - We have tight ranges on SPY, Tech and Financial sectors and the breaks of these ranges will give us clues for what to expect this coming week
XLT SHORTEntered yesterday and position, via options, and ended up about where we entered minus a few $ for commissions and option spreads.
Today on 195 minute bars we see a 50% retracement from yesterday, the price just at LT resistance and a very tight triangle. Plan to go short at 24.02 with target around $22 or lower.
Interest rates don't matter for XLF, lolSo here we are, right back to the same price level as the last Fed rate announcement. Complete retrace of the tank for XLF, along with AMZN. In fact, retail XRT is actually higher than it was before the announcement, because apparently neither banks nor retail care about interest rates, lol. Look at HYG, corporate bonds are right back up there as well.
If the market makes any sense, this will trade between here and $22 for a while then H&S down to $19 eventually. However, nothing seems very logical in this market (look at the price action on GOOGL), for all I know, they can jack the market right back up.
My best guess is a down week next week with a possible double bottom the following week (see my SPY post). I doubt they can jack up the Dow by 800 pts again next week, so at least there's a chance that crappy stocks will go down. Let's just hope they don;t melt the market up like last January.
