- For summer-EOY, will likely need to look at Finance sector as one of the leaders in indices.
- Price losing momentum (falling into lower channels), bounces appear corrective in nature.
- Distribution pattern formed.
- broke down.
- Price very likely to sell-off to bottom of the megaphone pattern, 9M , 20W , 200D .
- Usually the distributive sell-offs in indices form the W shaped structures, so a secondary sell-off is very likely.
- Then a corrective rally into mid July, before selling off in earnest into Q4.
- June 30, G-SIB banks begin stock buybacks, should save XLF .
- However, this is extremely after an initial relief rally, see:
It remains to be seen if the buyback rally will fuel another cycle, leading into season, or will indeed be corrective in nature, so watching out for the nature of the bounce, should it come.
If XLF somehow makes a new high - I will eat my hat and my charts, but hopefully not lose my $$$. Watching/waiting for a potential new short entry.
But good idea, need to be very careful with shorting in this market.