XLF Financials ETF Daily and Weekly Charts; Double-Top (M-Top); Rising Wedge; Overbot; Negative Divergence; Upper Band Violation; Price Extended

Stick a fork in the financials; they're cooked. The banks are topping-out in both the daily and weekly time frames. What a huge run higher since October 2023; from 31 to 46, a big +50% gain. America's wealthy class dances with glee, made filthy rich courtesy of the Federal Reserve's money-printing for the last 15 years. They spit on the huddled masses below.

The XLF ETF contains banks but also insurance companies and other financial-related companies. As the yield curve dis-inverts and begins a steepening cycle, getting back to normalcy, traders and investors figure the banks will benefit but that trade is played out; done and dusted. If you have a lot of profits in the banks, it is time to git outta Dodge, while the gittin' is good.

The daily chart comes up for the matching price high with all chart indicators sloping downward, negative divergence, so price is out of gas. There is no more fuel in the tank (indicators) to take price higher. The stochastics are overbot agreeable to a pullback. The double-top, or M-top, pattern is in play so a move downward would complete the pattern. Price is extended above the moving average ribbon so a mean reversion lower is needed. Price may want to tag the upper band at 45.92, maybe even sneak to 46.20-ish, but you would be wise to start scaling-out as it tops-out.

The blue circles show 5 days of distribution taking place this month during 14 trading days thus far so for one-third of the trading days in September, the smart money is sloughing off shares to the dumb-*ss money, the sucka's. Every top needs the bag-holdin' sucka's. That is why the television talking heads keep telling you to buy the banks. Buy, buy, buy! Sucka. The investment banks are sloughing off their shares to you, sucka. Pump and dump.

The weekly chart shows the rising red wedge pattern that is bearish. As price prints the matching high from August, the chart indicators are all neggie d. The one sliver of hope for XLF bulls is the short green line for the MACD trying to eek out a higher high but even so, it would only delay the top by a few days or week or so, and do not expect it.

Price tags the upper standard deviation band so the middle band, that is also the 20-wk MA, at 42.70, and rising, is on the table, and also the lower band at 39.66 rising sharply. Price is extended above the moving average ribbon so a mean reversion is needed. The ADX pink box shows that XLF is trying to hold on to a strong trend higher by its fingernails. If the ADX loses the 26-28 area, it verifies that the strong trend higher in banks is over (this indicator always lags).

The Aroon green line indicates that nearly all the bank bulls expect the bank stocks to go up forever going forward. The Aroon red line indicates that nearly all the bank bears expect the bank stocks to go up forever. That is funny. Rampant fearlessness and complacency. Excessive euphoria.

The XLF 2-hour chart is also in neggie d so the top is in now. Maybe some happy talk will maintain buoyancy in price to try and tag 45.92-46.20 but do not count on it. A multi-week move lower for XLF is expected to begin now. There is a lot of congestion down at the 40-42 area so that would be a logical place for price to drop to over the coming weeks and a lot lower if 40 fails. If you are long the banks, it is time to Surrender your shares and go short.

Keystone is not playing any banks or financials long or short these days but will look to bring on short (inverse) bank ETF's going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Tuesday Evening, 9/24/24, at 8:00 PM EST: Visa stock took the pipe today after the DOJ sues the credit card king. Former Speaker of the House Nancy Pelosi's husband sold over $500K worth of V stock before the announcement of the lawsuit. Human greed (in the form of crony capitalism) destroyed America just as it has done to every other government or country for 5,000 years. XLF is at 45.06 now down from the 45.66 above. The neggie d is doing some slapping. The low today is 44.90 and the second it tapped its toe on the 20-day MA support at 44.90 it bounced. CNBC commentator Tim Seymor tells everyone to buy the regional banks with both fists. KRE drops from 58.75 to 56.08 over the last 4 days printing a triple-top. Berkshire-Hathaway, Warren Buffet, continues ditching BAC shares.

Note Added Hump Day, 9/25/24, at 10:19 AM EST: XLF 44.79. The 20-day MA support at 44.90 has failed so it now becomes resistance. The 50-day MA is at 43.75 and rising.

Note Added Saturday, 9/28/24: XLF finishes the week at 45.15 with price maintaining the 20-day MA support at 44.92. The charts remain negative pointing towards a multi-week down move ahead for XLF.

Note Added Saturday, 10/5/24: XLF finishes the week at 45.65 bouncing on the happy Jobs Report.

Note Added Tuesday, 10/8/24, at 7:46 AM EST: iCapital strategist Anastasia Amoroso tells everyone to buy XLF with both fists. BMO analyst Brian Belski tells investors to buy SNV bank. Bank earnings are on tap in the days ahead and will determine who wins and who loses. Winners and Losers. Life's a gamble, and you might lose.

Note Added Wednesday Evening, 10/16/24, at 7:27 PM EST: XLF goes to the moon at 47.48 after the blowout bank earnings. Nothing has changed in the charts but since there is upward thrust, give it a week or two to top out and then begin a multi-week slide. Keystone still has no positions in the banks long or short.

Note Added Friday Morning, 10/25/24, at 5:44 AM EST: XLF 47.15. Banks remain lofty after yearnings and with rates moving higher. A multi-week slide is expected due to the negative divergence. The earnings delayed the top. The top is 47.81 on 10/17/24 but price likely needs to come back up to 47.5+ over the next couple-few days to mark the top on the daily chart and begin a solid multi-week down move.