XLF Financials ETF Daily Chart; Oversold; Positive Divergence; Lower Band Violation

The red descending triangle remains in plkay for the banks. XLF failed below the baseline signaling trouble ahead. Price has been back-kissing the base line area, and the 50-week MA at 26.94 for the last week or so. Watch 26.94 closely; it will tell you a lot about the banks.

The green lines show positive divergence in play so the banks should bounce in the daily time frame. The MACD ine has a sliver of weakness in the VST so this may create some sideways chop for the banks on Thursday and Friday but the possie d and oversold conditions should provide upside ahead. The lower band is violated so the middle band at 27.23, at a minimum, is on the table. That would be a nearly +3% bounce from the current price.

Keystone does not have any positions in the banks currently long or short but will probably buy JPM or GS, which are set up exactly like the XLF, for the bounce in this daily time frame. The trade will be all about timing since the weekly charts remain week. Banks should begin bouncing any day forward and rally for a few days but do not fall in love with the trade. Take whatever profits it brings and 'git outta Dodge' since weakness will likely reenter for the banks on the weekly basis due to the weak weekly charts. So you have copper and bank plays to consider on the long side for the days ahead as per the last two posts. 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 7/14/18 Saturday Morning: The series of long plays mentioned in this recent batch of charts SCCO, COPX, FCX, XLF, JPM, GS, AAL and ACM are all winners across the board +4% to +5%. Keystone entered and exited SCCO, COPX, AAL and ACM. Humorously, the copper plays (Southern Copper Miners and Freeport), AAL and ACM collapse again. You have to be very nimble in these markets. Playing the long side is like picking up nickels in front of a bulldozer. SCCO and COPX still look good going forward so they are potential long plays again, perhaps see how the 2-hour charts look on Monday to look for an entry. Bank earnings continue so probably best to stay out of that drama. AAL looks good going forward; near-term there should be upside juice in that ole bird.