ETF CORNER

XLF : Measured target of $14.50

XLF : 2 symmetrical triangles, 2 different outcomes !

I figured I'd make the case for a breakdown in XLF since some of you were worried about the rally they had yesterday ! Let me be clear on XLF. In the previous symmetrical triangle (A) you can see how pathetic the volume was on the dowside (B). The outcome was a break to upside back to the 200 day mov avg. What is different now , although we have the same exact symmetrical triangle, is that the volume on the downside is huge (B'). Ultimately this tape is going to breakout of this triangle (A') on the downside. The low volume snap back rally XLF has had yesterday is still within the symmetrical triangle (A'). No worries here ! The target is near $13.80. SKF,FAZ and SEF should do well in coming days !

XLF : All sectors are not created equal.

By looking at the broad market if someone had asked me to guess at what level would XLF trade right now. My best guess would be close to $15.30 above the yellow line. Unfortunately, XLF is trading at $14.53 as i'm typing this. You guessed it. Financials are lagging ... and it's not a healthy sign. Here is what I see for XLF near term.

 

XLF : What would Al Capone do ?

If I were Al Capone, I would short XLF whenever it gets to that third red arrow near $14.50 and let it slide down to $12 ! This pattern is a little bit like the one I posted on DBC earlier in August, Look how well it worked (Click Here) !!