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Financial Sector (XLF) : Breakout?
August 8 2016 ( From Tradingview )
August 8 2016 ( From Tradingview )
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The Situation
SP500 Financials (XLF ETF) previous yearly low was made on
February 11 then at 19.53, level last seen in the mini flash crash on
August 24 2015. (See first chart below) It did a second low on June 27
at 21.32 on post-Brexit Fears. And since then, the XLF ETF is within
a higher highs and higher lows technical pattern. (See first chart below)
Since July 14, the XLF ETF traded in a narrow range and kept trying
to break a Major Daily Resistance Trendline that started back since
July 23 2015. (See first chart below - Red Trendline)
The XLF ETF finally broke on August 5 that Major Resistance Trendline (See First Chart Below - Red Trendline - Ellipse)
on a small uptick in trading Volume.
In fact, the Financial Sector are outperforming the Mighty SP500 Index (Ratio of XLF ETF over SPY ETF) only since July 6 2016 after testing the Support Trendline on a Relative Basis. (See second chart below - Thick Blue Trendline - Ellipse)
Bulls still have a lot of work to do as we need to break the 200 DMA (Day Moving Average) on a relative basis (See second chart below - Green Line) and the next Major Resistance Trendline (See second chart below - Thick Red Trendline) to open the door for a real major breakout on the SP500 Financials (XLF ETF).
But what is interesting indeed is that the Financial Sector is only catching up to the Mighty SP500 Index, as the Nonfarm Payrolls last Friday increased the odds of a rate hike from the FED, giving some hope for banks on net interest margin.
That Breakout on XLF ETF is quite different than the others sectors who already did; no new high on Financials price wise (still 6.2% below peak price reached on July 23 2015 excluding dividends) and the Breakout is only on price, not on a relative basis, making technically speaking that last move a tad weaker than the Technology Sector as an example.
I remain cautious as the XLF ETF (US Financials) is almost at the highest valuation on a relative basis compare to its International peers taking the IPF ETF as a proxy (SPDR SP International Financial Sector ETF)
which is based on the S&P Developed Ex-U.S. BMI Financials Sector Index. Also the volatility of Financials remains quite high compare to the broad market indices which does not bode well in terms of confidence.
Bulls must protect at all costs that Major Daily Trendline (now becomes Support) that started back since July 23 2015 (peak in price in that Bull cycle).(See first chart below - Thick Red Trendline - Ellipse).
.
SP500 Financials (XLF ETF) previous yearly low was made on
February 11 then at 19.53, level last seen in the mini flash crash on
August 24 2015. (See first chart below) It did a second low on June 27
at 21.32 on post-Brexit Fears. And since then, the XLF ETF is within
a higher highs and higher lows technical pattern. (See first chart below)
Since July 14, the XLF ETF traded in a narrow range and kept trying
to break a Major Daily Resistance Trendline that started back since
July 23 2015. (See first chart below - Red Trendline)
The XLF ETF finally broke on August 5 that Major Resistance Trendline (See First Chart Below - Red Trendline - Ellipse)
on a small uptick in trading Volume.
In fact, the Financial Sector are outperforming the Mighty SP500 Index (Ratio of XLF ETF over SPY ETF) only since July 6 2016 after testing the Support Trendline on a Relative Basis. (See second chart below - Thick Blue Trendline - Ellipse)
Bulls still have a lot of work to do as we need to break the 200 DMA (Day Moving Average) on a relative basis (See second chart below - Green Line) and the next Major Resistance Trendline (See second chart below - Thick Red Trendline) to open the door for a real major breakout on the SP500 Financials (XLF ETF).
But what is interesting indeed is that the Financial Sector is only catching up to the Mighty SP500 Index, as the Nonfarm Payrolls last Friday increased the odds of a rate hike from the FED, giving some hope for banks on net interest margin.
That Breakout on XLF ETF is quite different than the others sectors who already did; no new high on Financials price wise (still 6.2% below peak price reached on July 23 2015 excluding dividends) and the Breakout is only on price, not on a relative basis, making technically speaking that last move a tad weaker than the Technology Sector as an example.
I remain cautious as the XLF ETF (US Financials) is almost at the highest valuation on a relative basis compare to its International peers taking the IPF ETF as a proxy (SPDR SP International Financial Sector ETF)
which is based on the S&P Developed Ex-U.S. BMI Financials Sector Index. Also the volatility of Financials remains quite high compare to the broad market indices which does not bode well in terms of confidence.
Bulls must protect at all costs that Major Daily Trendline (now becomes Support) that started back since July 23 2015 (peak in price in that Bull cycle).(See first chart below - Thick Red Trendline - Ellipse).
.
Financial Sector (XLF) : Breakout? $SPY, $XLF
#Trading #Investing #xlf #SP500
#stocks #financials
Daily RATIO
SP500 Financial Sector (XLF)
over SP500 Index (SPY ETF)
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
SP500 Financial Sector (XLF)
over SP500 Index (SPY ETF)
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
SP500 Financial Sector (XLF) - Daily Candles
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
Financialiceberg.Com
Financialiceberg.Com
Daily RATIO
SP500 Financial Sector (XLF)
over S&P Developed Ex-U.S. BMI Financials Sector Index (IPF ETF)
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
SP500 Financial Sector (XLF)
over S&P Developed Ex-U.S. BMI Financials Sector Index (IPF ETF)
20 DMA ( Day Moving Average - Yellow Line )
50 DMA ( Day Moving Average - Red Line )
200 DMA ( Day Moving Average - Green Line )
Financialiceberg.Com