XLF trade ideas
XLF: preparing for a "sharper" correctionWith XLF hitting 25 Region - a long term resistance - it is reasonable thinking about a short via FAZ ...
Weak all weekXLF was weak in spite of money centers issued very good number. The price consolidates just above strong LT support at 23.00 Good time to plan short, to me it's gonna work both for momentum trades and swings
US Financials Sector Under PressureWe have updated our monthly publication - US Sectors Relative to S&P500.
It is an overview of the major US sectors, and covers, amongst others, Consumer Discretionary, Consumer Staples, Energy, Healthcare, Technology and Financials.
Within several ratings changes, we have Downgraded Financials to Underweight.
On an absolute basis, the US Financials ETF XLF is showing signs of exhaustion. Prices are correcting back from the March highs at 25.30, with focus now on the 22.55/57 break level from November/December. Falling momentum studies suggest risk of a break beneath here, with subsequent focus then turning to the 20.00 break level.
Relative to the US S&P500 Index, price action is also looking vulnerable.
In the coming months, we see further Underperformance as institutional investors reduce exposure.
Individual names which are currently under pressure include Bank of America Corp (BAC), Citigroup Inc (C), Goldman Sachs Group (GS), JP Morgan & Chase Co (JPM), Morgan Stanley (MS) and Wells Fargo (WFC).
However, several names are managing to hold on to their relative strength. Investors who are maintaining a Financials portfolio are currently seeing safety in for example, American Express Co (AXP), BlackRock (BLK), Berkshire Hathaway (BRK), Moody's Corp (MCO) and Prudential Financial (PRU).
XLF H&S neckline break - Bad Auto Loans / No Bank Reg Reform?AMEX:XLF AMEX:FAS AMEX:FAZ AMEX:KBE NYSE:C NYSE:BAC NYSE:WFC AMEX:IWM RUT TVC:RUT
Head And Shoulder Pattern On Financial Select Sector SPDR ETF There is a clear and crisp head and shoulder pattern on the chart of the Financial Select Sector SPDR Fund (NYSEARCA:XLF). For investors who do not know, a head and shoulder pattern is very bearish. For the massive downside to occur, the neck-line needs to be broken. Please be aware, the neck-line has not broken yet Financial Select Sector SPDR Fund, so there is no immanent danger, but based on the chart, it is likely it will happen in the next week. When the neck-line triggers, the XLF will drop from its current $23.40 to $21.00. This spells major downside on financial stocks like Goldman Sachs (GS) and JPMorgan Chase (JPM). This should be very concerning for investors in relation to the overall market. If the financial stocks fall sharply, the market will be taking a beating.
Head And Shoulder Pattern On Financial Select Sector SPDR ETF There is a clear and crisp head and shoulder pattern on the chart of the Financial Select Sector SPDR Fund (NYSEARCA:XLF). For investors who do not know, a head and shoulder pattern is very bearish. For the massive downside to occur, the neck-line needs to be broken. Please be aware, the neck-line has not broken yet Financial Select Sector SPDR Fund, so there is no immanent danger, but based on the chart, it is likely it will happen in the next week. When the neck-line triggers, the XLF will drop from its current $23.40 to $21.00. This spells major downside on financial stocks like Goldman Sachs (GS) and JPMorgan Chase (JPM). This should be very concerning for investors in relation to the overall market. If the financial stocks fall sharply, the market will be taking a beating.
XLF will lead market lowerAMEX:XLF AMEX:SPY TVC:SPX OANDA:SPX500USD TVC:VIX AMEX:VXX AMEX:UVXY NASDAQ:TVIX AMEX:FAS AMEX:FAZ
XLF Synthetic StraddleTrade Setup:
-1 XLF May 19 20/23/23/27 Synthetic Straddle @ $1.26
DTE: 53
Max Win: $126
Max Loss: $126 (1x credit received)
Breakevens: $21.74 & $24.26
Trade Management: 25% profit; 1x credit received loss
Green is profit zone; Vertical black bar is expiration.
Potential Sell Zone towards FOMC24-25$ is a potential Sell Zone that includes:
1) Weekly Structure
2) Bearish Crab
3) The 78.6 Fib level (reversal level)
A close below 23$ can provide the confirmation signal - In such case, XLF target will be 21$
XLF to go for $26 areaEven though it has almost touched the top line but at the daily level, 5 wave is not done yet.
No US Market Crash until XLF reaches $26-28May get decent pullbacks on the way up, but I do not expect real selling until financials reach support lost from 2008 highs. I would expect to see distribution and momentum slow as we approach $28. If and when that happens, I would be looking to build a large short position in SPY.
XLF. Welcome to hell!I will try to call a multi-year top on the XLF fund. Will short from 25, targeting... Probably, 12.
But my main question is: was the whole movement from 2009 to now a wave 1 or it was a B and we still wil see a Wave C? If that was a B, then we can probably say: welcome to hell, banks! Hope you enjoy your stay here
Financial ETF Bearish Deep Crab w/ Warning SignsHere is a perfect example of a harmonic pattern but not a harmonic pattern opportunity! An ideal Deep Crab that has many WARNING SIGNS. The Terminal Bar (the exact completion point in the PRZ) and RSI condition are less than ideal. Also, Harmonic Traders must understand that the EXECUTION PHASE of any harmonic pattern OPPORTUNITY does not begin until Terminal Bar+1. So, we look for a potential short next week but with much skepticism for the bears!
Anyone who promotes a "set&forget" strategy dismisses the discipline required to make the critical assessments that can avoid flawed harmonic patterns. 80% of all harmonic pattern losses can be avoided BEFORE the trade is even executed.
Base in FinancialsThis base in XLF looks very solid. For now I'd expect another leg up rather than retracement.
Ascending TriangleI'm liking this ascending triangle. This is really getting squeezed at the end here. I'm going to play this with options buying the $24 calls expiring next month.
XLF gonna hit new high XLF sees strong momentum on Tuesday trading and there's support @22.85. Trump's policy will benefit the financial sector anyway and we are expecting to see a pullback+bounce back to previous highest level and break through into a new territory!! Wait for the pullback to build the portfolio.
Short XLF small correctionAfter the strong "Trump" rally at the end of 2016, we could see a small correction in the financial sector. Indeed, we already saw the 10 year US yield going from 2.60 to 2.36, which isn't a good sign for banks in the short term.
Furthermore and from a technical perspective, the divergence between the security price (flat since 1 month) and the RSI (downtrend since 1 month) indicate a short term trend exhaution that could lead to a small correction.
