Jul 142015
 

With the addition of the WFC short entry today, there are now three Active Short Trades in the financial sector: FAS/XLF, BRK.b & WFC. This market has been unusually difficult to trade lately, both on the long & short side, due to both the recent very choppy price action as well as the fact that the broad market (S&P 500) has basically gone nowhere since the beginning of the year. As of today, the SPY & QQQ have exceeded the upper-end of my expected bounce ranges with the volatility indices ($VIX & $VXN) pulling back in more than expected before reaching my next upside target.

Bottom line is that the market has been very tough to call lately, at least for me, and so I'm keeping position sizing light for now but will continue to post what appears to be any objective trade setups or notable technical developments as they occur. As always, DYODD and only take (or pass) on trades that you feel comfortable with. With that being said, here's an overview of the financial sector (XLF) along with several of the top components.

XLF (Financial Sector ETF) is currently backtesting both the more recent bearish rising wedge pattern (yellow) as well as the primary uptrend line generated off of the Oct 2011 lows. XLF/FAS remains an Active Short Trade and also offers an objective new short entry or add-on here on the backtest. The stop for the FAS/XLF short remains a close (not an intraday break) above the recent highs.

XLF daily July 14th

XLF daily July 14th

BRK.b (Berkshire Hathaway cl. B) still looks to be in the early stages of a major correction or new bear market since breaking below both the primary uptrend line & 40 week ema. BRK.b also offers another objective short entry or add-on here as after falling about 2/3rds of the way to the first target, BRK.b is now currently challenging its 40-week ema, which has acted as good support in the past & now broken, is likely to act as resistance when tested from below. note: the 40 week ema is the same as the 200 ema on the daily time frame. A quick look at the daily chart will show how this is the second day in a row that BRK.b has failed on an attempt to take back & print a solid close above the 200 day ema. note: the weekly chart is shown below.

BRKB weekly July 14th

BRKB weekly July 14th

WFC (Wells Fargo & Co) was just added as an Active Short Trade earlier today on this backtest of the recently broken bearish rising wedge pattern.

WFC daily July 14th

WFC daily July 14th

JPM (JP Morgan Chase) is currently backtesting a very steep bearish rising wedge pattern which, like nearly all of the major financial stocks, was formed with prices making a divergent high (which helps to affirm the bearish nature of the wedge pattern). Also as with most other major financial stocks, JPM also has negative divergence on the weekly time frame as well, further indicating that a substantial trend change in the near-future is likely.

JPM daily July 14th

JPM daily July 14th

BAC (Bank Of America Corp) appears to have recently broken below a minor uptrend line within this larger ascending broadening wedge pattern as shown on this 4-year, 2-day period chart.

BAC 2-day July 14th

BAC 2-day July 14th

Finally, I have two uptrend line variations for this steep rising wedge with C (Citigroup) currently backtesting the blue uptrend line.

C daily July 14th

C daily July 14th

 July 14, 2015 2:37 pm  Equity Market Analysis Tagged with: , , , , , ,
Aug 162013
 

JPM was added as Short Setup on July 31st with an entry to be based upon a breakdown of this 14 month uptrend line.  The stock did make a solid break below that support level yesterday and moved back higher this morning to kiss the [continue reading…]

 August 16, 2013 2:02 pm  Completed Trades - Short Tagged with:
Jul 312013
 

As this daily clearly illustrates, JPM has traded in near lockstep with the S&P 500 in recent years.  Current, as with the $SPX, the recent breakout to new multi-year highs has some red flags that could spell trouble ahead for the largest financial institution in [continue reading…]

 July 31, 2013 1:41 pm  Completed Trades - Short Tagged with:
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