XLF Financials Daily Chart Positive Divergence

XLF daily chart is set up with positive divergence over the two month and two week time frames with the exception of the RSI and MACD line which are starting to trail lower in the two week time frame (short red lines). The blue lines in the price chart shows a falling wedge pattern which would actually target 11-ish at its lower apex if you extend the lines to the right. The red circles show that price wanted to see lower lows than the August lows, and now we have those lower lows.

The news is very negative with financials now, BAC web site problems yesterday after they decided to gouge customers with fees, MS has a 35% chance of going belly-up according to CDS spreads, GS broke 90 yesterday not seen since early 2009, etc..., so there is momo to the downside, but, the chart is set up for a positive divergence bounce. The 10.80-11.20 area, now, is an attractive entry point for a long play. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.

Note Added 10/4/11 at 4:08 PM EST: XLF bounced 4% today off the positive divergence. FAS, the 3x financial bull ETF, gained 9%.