XLF Financials ETF Weekly Chart; Overbot; Negative Divergence; Upward Sloping Channels

Bank runs are bad. But the recent US bank run is a different animal; it is a joyous bull rally. In 3 months, the financials (banks, insurers, etc..) catapult higher from 50-ish to 58-ish, a 16% orgy rally. Bank stocks gain over +1% per week for over 3 months. It's time for another $4K custom-tailored Armani suit and fancy lunch in Manhattan.

However, no one ever promised you a Rose Garden, and along with the sun, a little rain has to fall some time, as Lynn sings. When Grandma would complain to Grandpa about needing one thing or another, Grandpa would shrug his shoulders and say, "Liz, I never promised you a rose garden," and then he would play the song on the hi-fi stereo. We would laugh. People expect too much from each other nowadays. Relax, and enjoy the ride.

The banks are cooked on the weekly basis. Price prints the matching or higher high and all the chart indicators are in negative divergence (red lines). She's out of gas and there is no fuel remaining in the tank. The MACD over the last couple weeks points higher but you can see the neggie d in place over the last 1-1/2 years. That may create a jog move (down-up) but the top will be in place anytime now or within the coming days or week or two.

Banks will then retreat for multiple weeks. The upper band was violated so a trip back to the middle band, same as the 20-wk MA at 54.53, is on the table. That would be an -8% drop. The RSI and stochastics are overbot agreeable to a pullback. Plan accordingly.

The 2-leg bull flag played out in textbook fashion off the March bottom. The first leg is 48 to 53 so that is a difference of 5 points. The sideways consolidation occurs forming the flag with the slight bias lower. It is textbook. Then the second leg begins at 51 so adding 5 is a 55-56 target that is easily achieved and price did not stop there. XLF kept on running higher but now runs into the brick wall of neggie d.

Keystone is not in XLF long or short but obviously the play forward is to build a short position for the multi-week pullback at hand. 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 Hump Day Morning, 9/9/26: Whoopsies daisies. XLF falls -1.4% to 57.30 that should be the start of a multi-week neggie d spankdown. The 50-day MA at 56.93 is important since it matches price S/R. The 57 is the line in the sand where bad things happen if price slips below. Treasury Secretary Bessent is cocky mouthing off that the BOJ is under his control so much for independent central banks. Japan owns a boatload of US debt so Bessent feels an urge to act like daddy. He dares the market to test his actions proclaiming, "I am the house now." Traders will test Bessent. He is on the other side of the street now. When he makes such a statement, traders are going to push him and see if he backs-up what he says, or, if he is an empty suit like Donnie Chump, all hat and no cattle. Okay Bessent, let's see what ya got.

Note Added Saturday, 9/12/26: XLF 57.25. The neggie d spankdown in the weekly time frame has started. The bears left behind a gap. The expectation is for banks to trail lower for a few weeks forward. Keystone is not in the banks long or short right now but obviously short is the path forward.

Note Added Saturday, 9/19/26: XLF is at 55.86 receiving the start of the neggie d spankdown.  

Note Added Thursday Morning, 9/24/26: XLF is puking its guts out, driving the porcelain bus, dropping down to 54.54.