XLF Financials ETF Weekly Chart; Bank Earnings Season Begins; Potential Triple Top (that are supposed to not exist); Negative Divergence; Tight Standard Deviation Bands Forecast Big Move Ahead; Price Extended

The bankster yearnings are on tap this morning starting with JP Morgan, Citigroup and Wells Fargo. The results are only a couple hours away. Wow!! Hey everyone, the Wells Fargo wagon is a comin' down the street!! Of course the bank earnings over the coming days will dictate the path ahead even though the chart is set up negatively.

The blue stars show the potential triple top in the XLF an ETF that holds banks, insurers and other financials. We watched the Apple triple top a short time ago, that turned out to not be a triple top because price catapulted higher on more AI hype. Instead of AI, they should call it AJ for, "Ask Jeeves."

As Keystone has said many times, trip tops are 50/50 propositions. Even though the old adage says, "Triple tops do not exist," they actually hold about half the time (price drops from the third peak) and fail half the time (price jumps higher nullifying the third peak).

The three peaks in price come with negative divergence across all chart indicators (red lines) so the XLF wants to begin a multi-week slide lower technical-wise but as stated above, bank earnings are on tap so flip a coin. The upper band is at 42.48 so it would be prudent for price to tag that number on the top side. The purple arrows show a tight band squeeze occurring so the move from earnings is going to be a big one. Unfortunately, tight bands only predict magnitude and not direction.

Price is extended above the moving average ribbon so a mean reversion lower is needed. The Aroon green line shows that about 70% of the bank bulls expect prices to continue higher forever while the red line shows that 100% of the bank bears have capitulated and believe that prices will continue higher forever. That's funny. The bank bears have left town and are in hibernation. The Aroon is a contrary indicator. If you look at the early 2023 fractal (brown box), that is where she is at again, and that created an exciting collapse as the red line shoots higher and green line collapses.

The ADX pink box shows that the strong trend higher for the financials remains in place although it is trending lower and may fall out of the box over the next couple weeks or month. The ADX is a lagging indicator that will serve as confirmation that trouble is on tap as the strong trend higher is lost.

The purple circles show distribution occurring all year long (smart money passing off shares to the dumb money). Analysts and money managers appear on business television touting banks because they are pumping and dumping. They need the public to serve as the bag holdin' sucka's.

The XLF daily chart is also in negative divergence wanting to top-out, however, there is VST momo occurring this week. Short-sellers are likely covering their negative bets ahead of earnings adding upside fuel. There are insider traders already trading off earnings numbers they know but the public does not. Wall Street is a corrupt casino; everyone knows that. If earnings were not on tap, banks would be expected to become soggy and roll over for a multi-week drop.

The chart is set up for a multi-week slide lower but the earnings can change that picture for a couple weeks or so. If the trip top is nullified and price takes off higher, the XLF will then set up for the multi-week slide in 2 to 4 weeks. Simply watch for the neggie d to reform. Keystone is not long or short any of the banks or financials (except what is held in generalized index shorts). Let the festivities begin. A lot will be known over the next couple hours.

XLF begins the day at the 42.24 palindrome. In the pre-market, XLF is up to 42.40 and tagged 42.48 (upper band) a couple hours ago. Of course, these numbers will change once the corrupt Three Stooges release their earnings. JPM is 207.45 now trading at 207.21 in the pre-market. C is 65.71 now trading at 65.53. WFC is 60.16 now trading at 60.01. 

Everyone is impatient for the bank earnings. That sounds like the latest song from Pixies that just dropped. Love the rock 'n roll driving beat. You're So Impatient. 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 7:00 AM EST: JPM and WFC are the first banks out of the gate with earnings and they fall on their face. A wheel just fell off the Wells Fargo wagon and no one is singing anymore. WFC collapses -6% to 56.70. JPM loses -0.8% to 205.80. C sits at 65.70 and XLF is at 42.23 now flat losing all the pre-market joy.

Note Added 9:24 AM EST: C bucks the negative trend topping expectations gaining +1.4% to 66.65. JPM 206.49. WFC 56.50. XLF sits at the 42.24 palindrome in the pre-market unsure on which way to run.

Note Added 9:33 AM EST: The US trading session begins with Citi leaking lower. C 65.70. JPM 203.49. WFC 55.97. XLF 42.27.

Note Added Saturday Morning, 7/13/24, at 5:40 AM EST: The bank yearnings are off and stumbling. JPM finishes yesterday down -1.2% to 204.94 flat on the week. C is thwacked -1.8% to 64.52. WFC lost a couple wheels off the Wells Fargo wagon collapsing -6% to 56.54 a huge gap-down. Television pundits that just lost their shirts are proclaiming that now is the best time to buy WFC. Despite the negativity in the kick-off of the bank earnings with the Three Stooges, the XLF floats higher +0.3% to 42.38 on Friday. XLF pops +2% this week ahead of the yearnings. The trip top remains and next week's bank earnings will dictate if triple tops exist, or if they don't. V, MA, GS, BX, PGR, CB, AIG and PNC are higher on Friday providing lift to XLF. Thus, credit card companies and insurers helped buoy the XLF. Regional bank earnings will come into play next week. America's garbage crony capitalism system allows thousands of unneeded banks to operate that only pose a threat to the overall financial system. KRE gains a huge +9% last week to 52.09; keep an eye on it.

Note Added Tuesday Morning, 7/16/24, at 6:00 AM EST: Goldman Sachs reports yearnings yesterday and creates happy action in the financial space. GS finishes the Monday session up a huge +2.6% and the XLF catapults +1.5% higher to 43.00. The banksters are popping champagne corks while guzzling Fed wine. It's party time at the corrupt casino.

Note Added Tuesday Morning, 7/16/24, at 7:00 AM EST: BAC reports happy numbers and pops +2% in the pre-market. The banksters break out in song; Happy Days Are Here Again, la, la, la.....  No more cares or troubles. Wheeee. Whoopie. Morgan Stanley will report shortly and try to keep the financial party going. XLF 43.15. JPM 210.69. C 65.55. WFC 58.00. KRE joins the bank orgy jumping higher to 54.31. XLF launches higher verifying that 'triple tops do not exist'.

Note Added Tuesday Morning, 7/16/24, at 8:35 AM EST: MS soils the sheets collapsing -3% on earnings to 102.12. XLF 43.09.

Note Added Wednesday Morning, 7/17/24, at 5:50 AM EST: The big bank earnings euphoria creates a new all-time high in the SPX at 5670 and sends the small cap indexes to the moon. Regional banks will put their cards on the table in the days ahead. XLF rocket launches higher to 43.49, into the stratosphere, out of the tight bands. Remember, tight bands tell you a big move is coming but do not predict direction; in this case it was obviously up.