XLF LongBanks are ready for the next leg up. Target for next swing would be the upper resistance level.
XLF trade ideas
Two Charts That Indicate S&P 500 Sell-Off, Part 2: XLFThis is part 2 of this series. The Financials.
In Part One I pointed out a bearish 5 wave impulse pattern (with a-b-c corrective waves) nearly completed.
I also postulated the following formula:
Inter-market analysis suggests the following formula (from Don's book of logical assumptions).......
E = MC x 2. Translation: Energy = Momentum Change x 2 ( XLE momentum change and XLF momentum change). To me, both are heading lower.
The XLE looks to be heading lower. The XLF looks to be heading lower. Are these two major components going to lead the S&P-500 lower?
The evidence suggests yes.
The bearish harmonic pattern above in XLF, and the bearish harmonic pattern in XLE (Part 1) both suggest trouble ahead for the S&P-500.
Today I would like to close with a quote from Jack Yelton: “There is a very easy way to return from a casino with a small fortune: go there with a large one.”
I hope this has been helpful, entertaining, and informative. May all of your trades go well. Don.
Follow up on financialsSee post 4 days ago. Gap was closed. Bear market in financials likely starting I believe. This chart shows interesting Fibonacci relationships and channel. In EWT "B" waves not infrequently are triangles. In this case I believe an expanding triangle.
Could use this weeks high or down trend line as stop. Take care
Markets are not anticipating a Fed Rate Hike--Currently, the XLF is trading at a significant support level at 22.22s. The last time it broke this level was at the beginning of the year with significant recession risks.
-- If the XLF trades above this level, this indicates a short-term bullish outlook to the mid 20s. Could test the prior highs, especially if the FED comes out HAWKISH.
-- Risk defined at :
STOP: below 21.30s
Target Entry : 22.50
Target Exit : 24.00s
-- Markets are not pricing in a FED rate hike for March, and a surprise hike could send this to higher levels and even break former resistance levels
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TWINS: XLF & IWM, BOTH MOVE IN TANDEMI believe IWM is setting up for the completion of a long top which is rolling over. I believe IWM will fall to about $95 before moving on to higher highs.
For those of you who chart XLF, please be aware that XLF and IWM move in tandem. If you are charting one then you are charting both.
Both are lagging, both have had technical bounces, and both need to participate in the "stock" market if we are to have a meaningful move higher.
The above chart is of XLF, but the thick bright green line is IWM. As you can see, these two issues move together.
I hope this has been helpful and informative. May all of your trades go well. Don.
Financials about to drop? The RSI-ROC I believe is even more sensitive to reversals and divergences than the RSI. When you get a negative reversal followed by a bearish divergence as we have now (and had in November) often a significant fall follows. The gap has not completely closed so there could still be a small bounce up to close it. Well see. Just the same it all looks bearish to me. Have a great and profitable week.
Financials backtesting key support after move upwardNice R/R here. @allstarcharts has a great blog post on XLF poised to outperform over intermediate time frame.
XLF banking on more buying pressureWith major bank earnings out of the way XLF have faired well and the confirmation of the break of the 200EMA coudl mean a move towards $24.50.
XLF to finish out distributionFinancials should lead the S&P to new highs as we have seen accumulation after flash drop, which resulted from 2 year distribution.
Long FinancialsWeekly charts: the XLF/SPY ratio has bounced off the 61.8% fibonacci retracement level of its major long term move started in 2011. Hammer pattern has formed on heavy volume on an absolute basis. Real opportunity to enter in the financial sector.
lets see if this monthly TL holds ... if not CoCo it is...lets see if this monthly TL holds ... if not CoCo it is...
XLF LongWith the rise in rates by the FED the
margins at the banks and credit card
companies will improve. I look for the
banks to become more favorable on
the street
MACRO VIEW: XLF AT MACRO UNCERTAINTY, STILL RECOVERING FROM 2008Financial SPDR ETF is still recovering from 2008 losses and did not make it back in terms of prices.
On long term basis - XLF has only recently crossed back the 10-year mean upwards (now at 21.50) and have been in 5-year uptrend until the recent August selloff. Currently it is trading within 1st standard deviation from 5-year mean, showing no macro trend.
On short term basis - XLF is also showing no trend, as the price is trading within 1st standard deviations from 1-year and quarterly means.
In summary, the 5-year uptrend will resume only after price will cross back 24 (5-year uptrend border). Until then, trend is lateral.
XLF - Squeeze release soonWith a massive squeeze on 4 timeframes (4hr/6hr/1D and 1W), XLF is poised to make a big move (In the chart, blue candles are all TF squeeze candles).
Squeeze release is usually accompanied by a fakeout, so need to be careful there, but based on other momentum indications, good chance of this breaking up. Breaking up that RSI resistance will be a good confirmation.
First target is 25.8 level.
