Financial Flip Fantasia

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.

(Click on image to enlarge)

The other level is 27.35 on the big XLF fund. Personally, I think this bounce is going to run out of steam before even last week’s highs are taken out, but as I said before, it’s useful to stay a bit paranoid about prospective sea-changes.

(Click on image to enlarge)

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.