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Good morning, everyone, and welcome to Wednesday. In spite of another everything-is-green nighttime session, I continue to beat my XLF drum, as I consider it a critically important chart to track. This ETF, which represents financial stocks, continues to grind its way through what I contend is a momentous (albeit glacially-slow) topping pattern.
The market has been going pretty much vertical since Friday, and today’s rally is a little mysterious. As far as I can tell, there’s no news – – none – – to explain the push higher (unless one thinks that President’s declaration that he’d be OK doing away with “spring forward/fall back” every year is bullish).
I think it’s useful to maintain a bit of paranoia about what could happen. Let’s focus on financials. I’d say there are two important lines in the sand to watch with the ETFs below. The first, the S&P bank ETF symbol KBE, has a neckline at 45.99 (if you’re having any trouble making out the tiny digits I’ve put on the chart below). That neckline constitutes the completion of an inverted H&S pattern which, in that instance, would send the price flying toward the green trendline.
If I were to pick out the Top Three Charts to follow in the coming year, one of them would absolutely be the financials, symbol XLF. We’re continuing to break down nicely on this, and of particular import is the price gap at $26.23 which took place this week.
Today is one of the godawful boring days in the “market”. As I’m typing this, the ES is up a staggering 0.06%. I’m having an OK day, and old friend Morgan Stanley is, slowly but surely, continue to tiptoe its way lower. I’m going to be quite inactive trade-wise today, focusing instead of more SlopeRules improvements.
I follow financial stocks closely, and one which stands out to me as a particular under-performer is Cigna (symbol CI) shown here.
