CHART SPOTLIGHT: The Financials Sector ETF – $XLF
The S&P Financials Sector ETF (NYSEARCA:XLF) took a further step down in a move which largely has followed what Treasury yields have done over the last few days.
XLF sent a warning on Thursday when it undercut the lows of the prior four days. This came after confirming a TD Combo sell signal on Wednesday. The sell signal made it difficult to think that positive earnings would have much effect on the Financial sector.  And they didn’t… as a lower low came on Friday before XLF recovered a bit.
True to form, both JP Morgan (NYSE:JPM) and Citigroup (NYSE:C) earnings failed to produce gains, seeing both stocks reverse violently to close down near the lows of the day Thursday, and toil a bit more on Friday. Â Both are at risk of their own trend reversals.
The Financials are an important part of the market, and a negative development will likely serve as a serious headwind to stocks for the foreseeable future. Pullbacks to 420 look likely for the S&P Financials index, while XLF could reach $25.00-$25.50.
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Twitter: Â @MarkNewtonCMT
Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
