XLF trade ideas
$XLF Is the Financial Pullback Something More? (includes video)U.S. financial stocks have been in pullback mode this week despite the SPX moving higher. Considering that financial stocks had been a big boost to market gains over the last several months, this could be concerning.
The XLF is down about 3% - and regional banks KRE down 6% - since the recent top. Let's put this move into context, shall we?
As MacroView as posted before, financial stocks really began to rally in early Sept just as the 10s/fed funds curve bottoms around 90 basis points. The correlation has been rather strong between .65 to .93.
In our view, the curve and financials rallied on two things: markets were trying to price higher inflation (we saw this as the long-end steepened) vis-a-vie higher commodity prices. Then, markets were anticipating Pres. Trump nominating John Taylor as the next fed chair, who would be uber hawkish.
We were happy to take the other side of that bet. Powell is dovish. In turn, we saw yields and copper, particularly, head lower.
The 10s/fed funds rate topped out at 131 basis points and began to trade lower on the above events. Price action in XLF and KRE weakened and the pullback ensued.
Click the here to listen to where support may be found and whether or not financials and the curve will rebound.
Check us out on twitter @macro_view
XLF Bear Divergence Top of ChannelShorting down to previous breakout level if further signs of weakness are shown. Ran too far too fast.
XLF - Ascending channel, brokeout of boxXLF broke out of 10 month range. Now in an ascending channel.
XLF Hits Target of 26.69XLF has reached its minimum target of 26.81. So far HSI and Amp RSI show no signs of an impending reversal.
Thus this would be a time to consider taking some profits off the table but not to take a short.
Amp RSI in particular shows extreme overbought behavior which suggests price needs time before a reversal can happen.
Check my twitter account for more details: @KeeganHT
Financial Bull FAS XLFHave some runners in FAS, waiting for a little pullback to the red arrow to reload.
XLF Heading to 26.69XLF has obviously been on a nice run, but is well on its way to a 1.618 projection at 26.69 as conservative target.
XLF megaphone top to be completed.I believe right now we are in the 3rd of the 5th. There is still a bit to run for this ticker. Sell overshot double top in the coming weeks.
XLF looking like a good long position here as a short bond proxyIf you expect an uptick in inflation like I do in the US, the Financials could be a good way to play this.
With USD down more than 10% this year, commodities having risen by more, and continued labour market tightness, inflation could surprise to the upside over the next few months and $XLF could be the proxy to play this, rather than being short bonds - which is something I don't like to do due to the negative carry. This trade could also complement a long position in USD/JPY.
Potential DVG + LVL-key level since Dec.
-deltas: not below the rectangle - momentum strong for bears, bulls want a pivot move
XLF bear count. Worth watching?I'm actually bullish on stocks but this count might be worth watching.
XLF(daily chart). EW5, Ending diagonal ,Geo complete at Support.XLF(daily chart). EW 5, Ending diagonal , Geo complete, at Support.
XLF Financials looking for a decent short area. Potential Sell Target and following Buy target marked on Chart.
