FINANCIAL ICEBERG
Always consider hidden risks
 TECHNICALS
Financial Sector (XLF) : Breakout? 
 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).
​​​​​​

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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) - Daily Candles
​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 )​
Financialiceberg.Com