FINANCIAL ICEBERG
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TECHNICALS
SP500 Financials (XLF) : At Crossroads ?
September 22 ( From Tradingview )
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The Situation
The XLF ETF tested and broke on August 21 on the dowside the
200 DMA ( Day Moving Average ) then at 24.50.
( See 1st chart below - Green Line 200 DMA )
Observe the underperformance trend since August 25 of the XLF over
the Mighty SP500: a Rejection of the Resistance Trendline on a Relative
Basis that goes back since July 23rd 2013. ( 2nd chart below - Ellipse ).
But the most interesting Technical Factor for me, it is that the SP500
Financials (XLF ETF) broke on August 21 a Major Support Trendline from
a Rising Wedge then at 24.58 that started back on October 15 2014.
( 1rst chart below - Red Trendline - Ellipse ).
SP500 Financials ( XLF ETF ) is trading within a technical pattern called a Pennant with todays level of 22.85 as support and 23.26 as resistance.. It could become a major reversal for XLF as already we had a false break out on September 16 and that we are back below the 20 DMA ( Day Moving Average ) then at 23.07.
( See Chart Below - Grey Trendlines )
Volume normally expands at the start of the flag or pennant, contracts as the pattern develops and then expands on the breakout. What we saw is that volume on updays ( Dead Cat Bounce ) was done in a lower volume environment, typical of Bulls losing control to
the Bears. ( See Chart Below - Bottom Blue Area Line )
But what bring all my attention is that we tested on September 21 on a Relative Basis ( Ratio of XLF over
the Mighty SP500 ) a Major Support Trendline that started back on April 5 2013. IF we break that Support Trendline, it is all over for XLF ETF. We can say that Financials are at Crossroads.
( See Second Chart Below - Ellipse )
SP500 Financials (XLF) : At Crossroads ? $SPY, $XLF
#Trading #Investing #xlf #SP500
RATIO
SP500 Financial Sector (XLF)
over SP500 Index
21 DMA ( Red Line )
SP500 Financial Sector (XLF)
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
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