XLF Financials Weekly Chart Positive Divergence

Financials weekly chart shows positive divergence now setting up over the last few months. Stochastics and MACD line, however, is not positively diverged over the last couple months (red lines). The red circles show how the indicators wanted to see lower lows with financials as the low prints were made in August 2011. Now we see those lower lows satisfying the red circles and creating positive divergence for a bounce (green lines).

Keystone pointed out the top in the financials as it occurred earlier this year, that ominous top, along with copper's top, forecasted the broad market trouble we are in now. The pink H&S targets 10. The chart shows that price wants to bounce in the short time frame and then continue along sideways thru the 10-13 range for the weeks and months ahead. Banks around the world are in big trouble now, however, so the news flow can easily usher in increased weakness at any time. Generally, the banks have received a severe beating that is far along and long in the tooth at this point; the XLF falling from 17 to an 11 handle since its February top, thus, some price moderation is in order. 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.