Tag Archives: Treasury yields

Trading Strategy – Financial Select Sector SPDR ETF

Stocks were off to the races at the sound of the opening bell aided by a better-than-expected personal income report and pending home sales report and several speeches from Federal Reserve policymakers suggesting the central bank has time before it starts reducing its bond-buying.

Most cyclical groups registered solid gains with financials settling in the lead, sporting a gain of 1.3%.  Financials were closely followed by this month’s top performing group, telecom services. The high-yielding sector took a significant hit when Treasury yields began their climb in May. However, recent days have seen the sector rally even with yields not far from their recent highs.  As such, the Financial Select Sector SPDR (XLF) jumped 1.29% to 19.57.  Below is an updated look at a trade in XLF. The ETF was outperformed the market in recent days and is at an interesting spot.

The graphic below is from our “U.S. Market ETF Trading Map”, which show the near-term technical bias and trading ranges for XLF.  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.  The yellow bars identify period of neutral or sideways trading pattern.  Additionally, the light-blue shading represents the short-term trading range.  A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading).  Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.

Chart 1.1 – Financial Select Sector SPDR (daily)

As indicated in the above chart, our “U.S. Market ETF Trading Map” rates XLF as a Buy.  XLF had been trending rapidly higher after the June correction tested and respected support at the bottom of its short-term trading range. Wednesday upside breakout had pushed XLF above the trend channel moving average (as represents by the white line in the chart).  Money Flow measure trended higher from above the zero line, indicating an increase in buying pressure. This is short-term positive but let’s notice that XLF is nearly short-term overbought following recent advance…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.

This is just an example of many successful trades that our member had enjoyed recently. After all, aren’t you glad you subscribed?

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