I wanted to share three of my existing positions with you that are in the financial sector.
First is Sallie Mae, known these days as SLM Corporation. It had a huge topping formation, plunged during the financial crisis, and spent years climbing its way back up to its failure point (red line). Now that we’re there, it’s vulnerable.
Anyone else feeling the summer doldrums? I am. It can vary from day to day. Yesterday, for instance, seemed like kind of a kick. Today was three letters: M, E, and H. Oh, well. There’s just not much going on. Earnings season hasn’t started, and the political scene just has boring nonsense like this Trump/Russia thing, whose bombshell news today rocked the market for about seven minutes.
In spite of all the ho-hum, I’d like to offer up one chart that kind of grabbed me: the financials ETF. As you can see below, there’s quite a compelling analog happening (click the chart to see a bigger, easier-to-read version). Hopefully the simple colored lines and arrows on this SlopeChart speak for themselves………
I’ll just toss out this chart, then I’ll say something unrelated….
Since the lowest point of the financial crisis (whose name itself is a joke – – turns out it was a financial opportunity for the investment banks), Goldman Sachs has increased nearly 500% in value, making Lloyd a billionaire. In addition, the federal government is crammed at the very highest levels with GS alumni. If there were any justice, or a munificent God, Goldman would have gone bankrupt in late 2008, but that, of course, wasn’t allowed to happen. Well-played, Goldman. Your greed, and your success, knows no bounds.
The combined impact of a better-than-expected non-farm payroll gains and the prospect of a Trump repeal of Dodd-Frank financial regulations goosed the Financial Select Sector SPDR Fund (XLF) +1.3% in early trading.
That said, let’s notice on the enclosed near-term Point & Figure chart, that current strength is pushing up towards a test of very powerful resistance at a quadruple high-print of 23.80.
A climb to a 23.90 print will trigger a new buy signal that will project to new high targets of 24.60 and 25.20. Only a print of 23.00 will compromise the constructive P&F set-up.
Originally published on MPTrader.com.