One of the noteworthy developments in recent days has been the move in financials. The group was under selling pressure as long-term rates slipped back after recent gains. The benchmark 10-year note yield closed at 3.06 percent after climbed to the highest level since 2011. The Financial Select Sector SPDR ETF (XLF) dropped 0.82% to 27.95, bringing its MTD gains down to just 1.8 percent, slightly underperformed the S&P. Now the question is whether the rally has more legs? Below is an update look at a trade in XLF.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. As shown, the underlying is in a short-term bullish trend when the price bars are painted in green. The underlying is in a short-term bearish trend when the price bars are painted in red.
Chart 1.1 – Financial Select Sector SPDR ETF (weekly)
Our “U.S. Market Trading Map” painted XLF bars in red (sell) – see area ‘A’ in the chart. The first dominant feature on the chart is the rising trend line starting in early 2016. The second dominant feature of the chart is the downward trend since early 2018. The late March selloff tested and found support near the 4-year moving average. The early May rally pushed the ETF…Click here to read more.
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