Bearish Trigger for Financials

About a month ago, we highlighted a bearish divergence in the semiconductor ETF (SMH) that indicated a potential rotation away from this growth-oriented group into more value plays. That rotation played out fairly well, as the SMH has indeed pulled back and broken its swing low from February. Now we are detecting a similar bearish pattern in the Financial Sector ETF (XLF) as well as many of the big financial names and regional banks.

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In today’s video, we’ll review how a bearish momentum divergence signals a potential trend exhaustion, and how to validate and confirm these signals using traditional support and resistance levels.

·      How the current chart of many financial names mirrors the recent bearish pattern in semiconductors

·      How a potential selloff in financial stocks relates to the incredible rise in interest rates over the last six months

·      Why the short-term tactical call and long-term market trend may diverge here, and how to think about a pullback in financial stocks

For deeper dives into market awareness, investor psychology and routines, check out my YouTube channel!

RR#6,
Dave

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. Please see the Disclaimer page for full details.