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XLF trade ideas

XLF- Economic update, Liquidity and Financials (chart heavy)J.C. Parets had a great post today identifying an 8 month high for AMEX:XLF financials and a break above its descending wedge. x.com This is a deeper dive into the technicals for the sector, beginning with a look at the broader economy and central bank liquidity. Economic outlook The economy remains resilient. Broad economic variables continue to expand. This chart monitors: Non-farm payrolls Consumption Household employment Real GDP Gross industrial output Real personal income less transfer payments Note that real GDP and real personal income have descended from their highs but remain strong. Liquidity is up There is a high correlation between expanding and contracting central bank liquidity and risk assets. We see risk assets drawdown on a lagged basis when central bank liquidity tightens quickly, and expand when central banks inject liquidity. The end of September saw liquidity tighten to its lowest level since 2020. Equities drew down to a local low 4 weeks later. Central bank liquidity has increased by $100B over the past week and $500B over the past two weeks. Risk assets are rallying in correlation. Note the XLF correlation with liquidity and with the S&P Sector rotation Sector leadership is beginning to shift. Over 13 periods, we can see Leading - Tech, discretionary, utilities, industrial, and financial Improving - Energy, staples, health care, materials Rotation within financials Looking at the rotation within financials we can see some predictable trends. When the market is fearful of the financials sector there is a rotation into $JPM. During recessions and market turbulence, JPM gains relative strength to the sector, regional banks, and other large US banks. This trend reverses during expansion. We can also see progression when we compare the recoveries of XLF, IAK insurance sector, and a cohort of 3 large fintech companies. The cohort of V, INTU, and FI advance first, followed by insurance, and then lagged by the broader financial sector. We observe a very consistent breakout among large influences to the sector with JPM, BRK.B and BLK. Game plan I'm looking for confirmation similar to what we saw with IAK and INTU. 65-70% of the time, we see breakouts of these formations retest the breakout area. From there I will look for opportunities between 38-39 to take profit. These align with the 1.618 and 2.0 extensions from the most recent retrace as well as a proportional movement from a measure within the pattern. The beauty of playing this pattern in this manner is that we can confidently set a tighter stop, as a full candle close back into the descending wedge will invalidate the opportunity.
ALong
by Ben_1148x2
1
XLF breaking out?XLF has had a pretty good month so far. Probably the worst sector is showing some signs of life despite issues with the banking system. This week XLF has poked its head above the triangle and the close was pretty good. Volume increased from last week as the down trendline was breached. Now, it is not a confirmed breakout yet as horizontal resistance is right above it and things are getting a bit overheated in the shorter time frames. It will be interesting to see how the pullback plays out. Markets are due for a nice pullback soon. If $31.5 - $32.5 area holds on the pullback then it might go off to finish the primary wave 5 sometime during the first half of 2024. This may also pull regional bank stocks that will benefit Russell and IWM.
ALong
by mukit1
XLF - Looking Very WeakFinancials charts have completely been rejected by the downscoping trend line. A weekly bear flag looks like it's about to trigger and send price action much lower. Since the daily chart is getting oversold, waiting for bearish consolidation is a wise decision if you are wanting to short. With the rise in yields recently, it's clear the Banks net interest margins are being squeezed. Will we see another banking crisis? The last time we saw the XLF close below the weekly 50MA, we saw a quick 10% drop.
A
by Trading-Capital
1
Financials Could Be Breaking OutFinancials have been in the doghouse since Silicon Valley Bank failed in March, but now there could be signs of improvement. The first pattern on today’s chart of the SPDR Select Sector ETF is the falling trendline that began early last year. XLF’s rally through July battled against that resistance. It pulled back in August but has now pushed through that line again. Is the downtrend finally ending? Second, the 50-day simple moving average (SMA) had a “golden cross” above the 200-day SMA in mid-August. That could also show a more bullish longer-term trend. Third, the August low around $33.60 represented a 50 percent retracement of the move between early June and late July. Does that confirm direction is skewed to the upside? Standardized Performances for ETF mentioned above: SPDR Select Sector ETF 1-year: +4.02% 5-year: +21.36% 10-year: +117.73% Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision. Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
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by TradeStation
1
The largest ETF focused on the financial sector, XLF, is indicatXLF's trajectory is akin to that of IWM, with the primary distinction being the emergence of a 'death hook' pattern on a notably larger chart. This amplification in scale should, in theory, enhance the pattern's precision. Compounding the challenges for this sector, the price has dropped below both the 50-day and 200-day moving averages (MAs) with apparent ease. This breach signifies a concerning lack of support from these key moving averages. Recent downgrades by Fitch and Standard & Poor's (S&P) of various banks are expected to exert a sustained negative influence on this sector. Furthermore, the financial sector faces issues tied to elevated interest rates and the persistently high yields of the 10-year Treasury note. Consequently, the sector's trajectory is likely to remain downward, potentially resulting in a breach of the lower trend line and triggering a substantial drop across the banking sector. It's essential to consider that despite favorable reports from individual companies like NVDA, the broader market's performance heavily relies on the strength of both smaller companies and financial institutions. A robust market tends to hinge on the vitality of the banking sector."
AShort
by Consistent_Trades
XLF is aliveNothing better for financials than a FED hike pause. XLF daily chart is experiencing a 21/50 EMA crossover (purple converging with green line), has crossed above the Ichimuku cloud, and sits currently right at 200 day EMA (red line), which is also a key Gann level. XLF could reverse downward off this 200 day EMA, but there is a low volume profile above, so it has potential to rocket above into the next Gann line at 34.48. Given the apparent bullishness in the general indices, I give this bullish potential good odds. Nevertheless, we are not out of the woods with financials in the longer run, should rates remain high, the odds of more financial sector defaults remains high.
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by UnknownUnicorn13101
Most important $$$ sector in the American marketWe are likely approaching the event that will finally close the bull!@#$ MMT chapter of investment banking. The XLF sector is the most important sector to monitor as the speed and magnitude of its decline will likely dictate how the rest of the sectors will follow. Despite what the FED, government and bankers want us to believe, the financial system is not stable. It is grossly leveraged in CLOs, CMOs, general debt and other corrupt forms of financial engineering, and it shall have to fall for balance to finally return to the financial world. This is exemplified recently by "sudden" collapses of fairly major banks like Silvergate, SVB and soon CS. My hope is the event will not hurt us, the people, too severely when it finally crashes to its final destination. All the green circles are important and possible pausing points, but there is no need to pause anywhere if there is a credit event. GL.
AShort
by supere
1
Bullish Cypher target $37Looking at this trading range, I've spotted a previous bearish cypher, a current bullish cypher. Price Action has retrace back to the Previous (B) leg of the Bearish Cypher. The Previous resistances, is currently acting as support for the D leg of the present bullish cypher. We can confirm this w/ the bottom of the Stoch RSI. I'm looking to buy put options on $faz ( the financial 3x bear ETF ) near the open bell Monday Morning.. I can also buy shares in the premarket of $xlf or call options. It will depend on the price action of both at that time.
ALong
by moneyflow_trader
2