The financial sector was under selling pressure last week as banks stocks were weighed down by a flattening yield curve. After surging 20 percent in 2017, the Financial Select Sector SPDR ETF (XLF) fell 0.4 percent last week to 28.23, up just over 1 percent YTD while the S&P gained over 8 percent over the same period. Now the question is whether recent pullback is a pause that refreshes or it’s a beginning of a something worse? 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. Over the past few weeks, the ETF has been basing sideways…Click here to read more.
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