The financials have assumed their familiar role of being the laggards everyone loves to hate. Looking at the daily chart of the XLF, ETF for the financials, it is easy to see why. After showing some signs of life from late 2010 through mid-February of this year, the financials have blended sideways-to-down action ever since.
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Moreover, many bears are hanging theirs hat on the chart of Goldman Sachs, which has been a notable laggard since the middle of January.
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At the same time, the broader bullish case is still intact. J.P Morgan is still working on a weekly cup and handle, as is the weekly chart of the XLF, seen below. Hence, pick your bias with regard to the financials, but do not disregard the fact that the weekly bullish setup is still clearly in play.
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Thx Chess. Any quick thoughts on BAC chart? Iv”e been short and looks like a break of the 200dma.
Thanks.
Nice short. I was surprised it broke support last week. It’s filled the gap back to late December now though, so I would consider covering your short here.
awesome stuff chess
Thanks, speero.
Thx for the quick reply Chess. it (BAC) also has that gap dating back to Dec 10 @ $12.17
Love the charts as a case study, but I would not buy big banks with my worst enemies money, there’s my bias and I am sticking to it!
Chess, my bias is up from here; give it a 60-40 edge for long. I think the fact of : POMO, Breadth graphs, and long term SPX trend favor a long position. I would however only leg in slowly as there is a chance that this 5 day surge is merely a preface to a final dip ala the 6-17-10 surge then dip.