XLF Financials Daily Chart

The banks were the last to the bull party this year but they will tell you better late than never. XLF is at a 6-month high. The joyous buying in the banks extended the broad stock market rally over the last month. XLF contains insurance companies and is not a true pure bank ETF but a great gauge of the sector nonetheless.

You can see the upward joy in price this year, however, you also see a rising wedge, overbot RSI, stochastics and money flow, negative divergence and an upper band violation. Hmmmm, that's not good. In fact, those are all bearish indications. It looks like the banks may need to pull back a few days to catch their breath.

The RSI and MACD line are receiving some momo after the late-week bullishness last week. If the RSI or MACD pop above their prior highs that will extend the top on this daily basis for a couple more days.

If you bring up the XLF weekly chart, the indicators remain generally long and strong in the near-term so it is likely not worth chasing the negativity on the daily chart on the short side. The pullback will likely be only a few days and then price should come back up due to the buoyancy in the weekly chart. The weekly chart hints at more highs coming in price say a couple weeks out.

On the weekly chart, the stochastics are overbot and money flow is flat so there is likely a topping basis occurring on the weekly chart that may occur in early May so that may be the time to look at the short side. Keystone has no position in XLF. 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 1:34 PM EST: XLF gaps higher up 1.4% to 28.08, a 28-handle. Global investors love the banks today.