FINANCIAL ICEBERG
Always consider hidden risks
​
 TECHNICALS
Financial Sector (XLF) : Near Major Breakout? 
​ August 23 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
May 31 2007! (See first chart below - Red Trendline - Ellipse)​​

​​​Quite surprising to have a very low trading Volume as we test a Major Technical Level.
 (See First Chart Below - Bottom of the Chart - Blue Area)​
​
​​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.​ 
​​​​​
​​​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 economic surprise index is on the rise and then increase the odds of a rate hike from the FED, giving some hope for banks on fatter net interest margin.

That Potential Breakout on XLF ETF is quite needed for Bulls as it represent 15.9% of the SPY ETF total allocation and is the second heaviest sector (first sector is Technology at 20.9%).

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 low which is surprising when testing a Major Technical Level.
​
​​​​I think the broad market (SPY ETF) need the Financials to continue to perform well; as we test the Major Resistance on XLF ETF, Bulls need to put their faith into that Potential Breakout.
​(See first chart below - Thick Red Trendline - Ellipse).
​​​​​​
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Financial Sector (XLF) : Near Major 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