XLF Financials Daily Chart; M-Top (Double-Top); Neggie D Spankdown in Progress

The financials are receiving a neggie d spankdown on the daily chart from the M-top (double-top). Price printed the higher high but all the chart indicators are sloping down, negative divergence, and out of gas, hence, price collapses.

The indicators remain weak and bleak wanting to see lower prices for XLF going forward in the daily time frame. The weekly chart also topped out due to neggie d so the financials are going to be soggy and sick for a few weeks forward.

Look at the huge volume candlesticks the investment banks cannot throwaway shares of the financials fast enough. Joe Sucka bot some banks during the earnings hype a couple weeks ago and now receives his head on a platter. Warren Buffett, the reason the analysts and strategists were pumping BAC the last few years, has been sloughing off shares to any sucka willing to buy them. Buffett has also been unloading AAPL while the television pundits tell you to, "buy, buy, buy!"

There was an ascending triangle (orange) pattern during late April, May and June, that resolves higher as would be expected (a bullish pattern). The vertical side is 2.5 points and the breakout is 42 so the target is 44.5 and 44+ is close enough for gov't work satisfying the ascending triangle pattern as the negative divergence and M-top then created the top and smackdown.

The blue line is 41.96. The chart shows that 42-ish is a key S/R level for XLF. Keybot the Quant remains short and is tracking XLF 41.96 as the key bull/bear line in the sand. The battle started Friday but this number will tell you the stock market story for Monday. As financials go, so goes the stock market. Watch XLF in the pre-market. XLF begins at 42.09 only 13 pennies in the bull camp creating upside for US stocks.

If XLF fails at 41.96 tomorrow, it is lights out for stocks and another leg lower is on tap for the SPX. You can use the XLF 41.96 as a rudder that steers the stock market ship at least into mid-week and it will likely remain important all week. The market remains edgy and moody, like Jack Kerouac. 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 Monday Evening, 8/5/24, at 6:34 PM EST: XLF collapses out of the gate this morning like everything else. XLF finishes the sick session at 40.84 with the bull/bear line in the sand, identified by the Keybot the Quant robot, at XLF 41.87 (this replaces the 41.96). The bulls have a lot of work to do tomorrow if they want to right the stock market ship.

Note Added Wednesday Morning, 8/7/24, at 6:47 AM EST: XLF ran higher yesterday helping to create the stock market recovery, but then fell on its sword, and stocks fell into the closing bell with XLF at 41.50. XLF 41.92 is the bull/bear line in the sand with price trading at 41.96 in the pre-market. Obviously, this range, say 41.87-41.95 is key as Keybot the Quant pointed out before it occurred. S&P futures are up big this morning +50 due to the BOJ verbally intervening sending the yen lower. Watch the XLF 41.92 line in the sand today. If XLF moves above and closes above 41.92, the relief rally is real and has further legs. If stocks rally, but XLF fades dropping below 41.92 and ending the session lower, the bulls got nothing and stocks will fade going forward. There's the 42.00 print for XLF. The bulls are pumping banks higher this morning so they can pump the stock market higher.

Note Added Wednesday Evening, 8/7/24, at 8:30 PM EST: The banks are playing a key role in stock market direction currently. Keybot the Quant algorithm calls out XLF 41.96 as a key bull/bear line in the sand. The XLF exploded above 42 this morning carrying US stocks on its back but then it fell on its sword at munch time and stocks fell apart from there. The XLF is creating stock market bearishness ending the session at 41.55.This is important since banks, financials, insurance companies, credit card companies, have tried to recover and head higher to help the stock market the last three days and all three times have failed to end the day lower. Folks, there is a problem at the banks. We do not know what it is as yet. But there is likely a problem with the banks based on the XLF action.

Note Added Friday Morning, 8/9/24, at 3:14 AM EST: XLF pops to 42.22 above the 41.98 bull/bear line in the sand. XLF did not fade in the late Thursday session like prior days. The bulls create higher stock prices with the strength in the banks. The drama continues. Dollar/yen is above 147. JPM says the yen carry unwind is about 75% complete. Bank of New York Mellon says the yen carry trade has further to unwind for weeks and maybe months ahead. Macquarie says there are no signs of global contagion during the stock market crash but cautions that there may be vulnerabilities exposed in the coming days in hedge funds, private capital, crypto operations, etc.....

Note Added Saturday, 8/10/24: XLF wins the day ending the week at 42.40. Bulls win. NYA floats higher to 18267. The battle continues. Keep watching the saga next week. The bull/bear line in the sand for XLF is at 41.99 so bears need a 41 cents drop in XLF (-1%) to usher-in stock market weakness. Watch the banks and financials pre-market to get a feel for the story ahead.