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Figure 1 is a weekly chart of the S&P Select SPDR Financial Fund (symbol: XLF). The red and black dots are on the price chart are key pivot points, which represent areas of buying (support) and selling (resistance).
Figure 1. XLF/ weekly
This is a widely followed ETF that correlates highly with the market. As the banks go, so goes the market. Currently, price is below the three most recent key pivots and there is only 1 interpretation for this finding: bear market. A weekly close below 13.76 would seal the deal. Support levels are at 12.38.
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1 comment:
What stands out is how anemic XLF's retracement from the bottom has been compared to the S&P500. Large financials continue to be a weak sector. And the inability of XLF to rebound (and the losses they may still incur on bad loans and market bets) signals that financials will be incapable of leading the broad market higher. If anything the large caps will continue downward as financials deleverage and PE multiples further decline.
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