XLF Financials ETF Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Price Extended

The banks, insurers and financial companies had a good 1-1/2 year with XLF catapulting higher from 30 to 52, a humungous +73% gain. The Wall Street fat cats are smoking fine cigars dabbing the ashes on the faces of the huddled masses. The RSI and stochastics are overbot agreeable to a pullback. The red rising wedge is bearish with price teasing a breakdown from the lower trend line.

The red lines show that has price makes matching and higher highs for 3 weeks running, all the chart indicators are out of gas. There is no more fuel to take banks higher on the weekly basis. This is when you are flying down the highway and all of a sudden the vehicle jerks a little bit, then sputter, sputter, choke, jerk, darn, its running out of gas, pull over quick, but not there, it is a cliff.

Price is teasing that upper band so the 53 may be tagged before she reverses hard on the weekly basis. The middle band at 49, and rising, and lower band at 45.23, and rising, are on the table going forward on the weekly basis. That 47-ish level may be solid support is she starts collapsing to the downside.

Price is extended above the moving average ribbon so a mean reversion lower is needed. The ADX pink box shows that price is still in a strong uptrend. But note that as price makes its highs over the last year, the ADX is dropping; neggie d. If the ADX falls below 28-ish, now at 34, the strong uptrend would be officially over. The ADX is a lagging and confirmation indicator.

The Aroon displays the same comical behavior as many other charts. The green line shows that all the bank bulls remains bullish believing that banks will go up forever. Humorously, the red line shows that all the bank bears believe that that the banks will go up forever. This uber bullishness on banks has been ongoing for the almost one year. The bulls and bears are partying on one side of the boat, with Keystone the only one on the other side and he is stepping into a life raft and when he does the USS-XLF will probably capsize. You will get taught a lesson if you hang out with those banksters.

Price should receive a spankdown going forward starting now. XLF may want to squeeze-out 53, if she does it will probably be over the next few days, then a multi-week move lower the rest of this month and much of March. A month from now, it would not be surprising to see XLF down at 47-ish. Keystone does not have any position in XLF long or short currently but obviously short is the path forward for the next few weeks.

Friday is Valentines Day. On their way to a date, men will stop at the local drug or convenience store, to see what they can buy real quick to make their honey happy, that they hope honey will think a lot of thought went into it. The wine and roses keep the love boat afloat, that may be adrift, and needing a rope. Oh my. Jenny is about to get wicked. Have mercy. Where are the heart pills. 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 Friday Morning, 2/14/25, Valentine's Day, at 6:06 AM EST: XLF is at 51.70. Get yourself out before the multi-week downslide begins. It is a double-top, or M-top.

Note Added Sunday, 2/16/25: Berkshire Hathaway's Warren Buffett continues throwing BAC shares overboard also C. He cannot get rid of the bank shares fast enough. Isn't he touted as the bigtime smart investor? Buffett is ditching banks so why would you be buying them? Maybe it is best to take advice from Jimmy Buffett and spend a day in Margaritaville.