Happy saturday traders! Next week, we have a load of bank earnings and we start off with BAC and WFC tuesday morning. Here's my thoughts on BAC: Double bottom pattern on daily TF and put/call ratio of .76 . On Friday, 3800 38.5 7/16 calls were bought during the day. Options are looking for a 3.5% implied move. GL! I will post a WFC analysis later!
Possible Scenario: LONG
Evidence: Price Action
Call options 10/15/21 strike 38$
Financial sector lagging for few weeks and now it's ready to take the lead again.
This is my idea and could be wrong 100%, not a buy/hold/sell signal.
Symmetrical triangle forming off of a long-term uptrend line. Blew away earnings but had a solid run-up to ER so will be expecting a retracement back to the 370 level. However, am bullish & will be looking for an entry for a long play and a breakout from this triangle.
The sectors ended the week in a very character than they started the week. None of the leading sectors early in the week were leading by the end of the week.
Financials (XLF) started the week in first as investors anticipated earnings reports from big banks that began on Tuesday. By Friday, the sector slipped to the middle of the list, ending the week with a...
Idea for XLF:
- 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.
- Ending diagonal broke down.
- Price very likely to sell-off to bottom of the megaphone pattern, 9M SMA, 20W SMA,...
Energy (XLE) and Financials (XLF) topped the sector list this week. Energy continues to rise while crude oil prices hit record highs. Financials (XLF) is recovering along with yields on Treasury Bonds, which both were hit by the hawkish stance from the Fed last week.
At the bottom of the sector list were the defensive sectors. Utilities (XLU) was the only sector...
XLF has been following a perfect IWM fractal so far. i overlayed IWM recent accumulation pattern on xlf. Lines up with what i think will be a further rotation away from value and into tech/growth next few weeks. accumulated longs at the lows last friday, and will leg into couple month out calls if it can consolidate like this.
Idea for Macro:
- Financial sector selling off heavily.
- While it's early to call a bear market, the exhaustion gap at an all time high is a reasonable signal for market reversal.
- XLF, XLE and FAAMG have been holding up the broader markets at this high... Cracks appearing?
- Institutions will invest based on 18 months into the future...
I like the setup here for some quick gains in this ETF. Downside risk is very low compared to potential upside within the next 10 days give or take.
Longer term this could go higher, value stocks are strong in general due to inflation concerns and the reopening momentum.
Best of luck if taking this trade.
As noted in my previous ideas about $SPY (bearish), $XLF, $XLI, $IWM, $XLE might be the catalyst that leads the markets higher. $XLF tapped the 8day EMA twice before going back to positive which to me shows resilience with a market that has no sense of direction. A nice hammer doji before breaking off into Memorial Weekend. XLF might try and tap the upper band...
It was a mix of defensive and cyclical stocks that led the sector list this week. Only three sectors ended the week with gains, while the high growth sectors took the biggest declines.
Consumer Staples (XLP) topped the list with Utilities (XLU) in fourth place. Both are defensive sectors for investors. Real Estate (XLRE) was lower in the list but still...