The one consistent theme I’m reading about these days……..and I’m certainly inclined to agree with it……..is the puzzlement about the complacency with respect to a forthcoming change in Fed policy. In other words, the “great unwind” of $4.5 trillion in assets the Fed has gorged upon during the past eight years. Tomorrow is the big day, and as I suggested yesterday, things are going to be boring until then (as we collectively observed the changes of a few hundredths of a point across our computer monitors).
Anyway, in an effort to make a silk purse out of a sow’s ear, I offer you the chart below (which, as always, you can click for a bigger version). It offers up a parallel, or analog, if you like, with respect to financial stocks. I’ve got November puts against the XLF. It will be interesting, to say the least, to see what effect the Fed’s big announcement on Wednesday at 2 p.m. has on equities in general and financials in particular.
You can see this via an exchange traded fund……..
Notice a trend here? It’s hard to believe on a day like this, but keep your perspective.
Price on three top Insurance ETFs has been dropping since mid-August, as shown on the following Daily charts of IAK, KBWP and KIE. In the process, they made some extreme lower swing lows on each of their respective three technical indicators, suggesting that further weakness lies ahead.
As of Friday’s close, they are trading around their 200-day moving averages, so failure to regain an upward bias from that level could spell further sharp drops for these ETFs. Watch for any major volume spikes on further weakness to indicate possible panic selling. In the short term, we may, first, see a retest of their 50-day moving average (possible “Dead Cat Bounce”) before the next leg down occurs. (more…)
I last wrote about the Financial ETF (XLF) on July 11th.
Since then, it failed to hold a brief breakout above the 25.00 major resistance level (convergence of 40% Fib retracement and upper channel), as shown on the following Monthly chart.
Price is sitting at the bottom of the upper quarter of a long-term uptrending channel…a segment that it hasn’t typically remained in for very long, or ventured above, since it began its long ascent from its 2009 lows after the financial crisis. (more…)
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………