XLF, à la JPM earnings in pre-market today, printed a high of 27.12 so far today in the pre-market session, right at the 27.13 price resistance + key 61.8% Fib retracement level once again. Odds favor at least a slight pop over that level in the regular session today while a reversal from there would extend the existing divergences. To be clear, a solid breakout & close above the 27.13 resistance level is bullish until & unless the breakout fails & the potential divergent high is confirmed, as the current divergences could be taken out should XLF continue up towards the next resistance level around 28.30. Previous & updated daily charts of XLF (2nd chart reflecting prices as of yesterday’s close).
The March 28th divergent high may have marked the end of the run for TLT (20+ year Treasury Bond ETF) although a successful backtest of the 122.50ish support level followed by another thrust up beyond the recent highs would is certainly possible. My additional thoughts in reply to an update request from @campbellholland415 in the trading room earlier today:
Yes, I will update TLT today & will say that the 122.50 level should act as support & would be an objective level to enter or add to a position on TLT.
Keep in mind that TLT just put in a clear divergent high on the daily time frame and while I suspect that we might get one more thrust higher to extend & possibly even take out those divergences, they should be respected along with the fact that TLT started an impulsive move lower following that recent DH & appears to be bear flagging on the daily chart now.
Translation: Objective entry does not guarantee success so a long around the 122.50 level with a stop somewhat below in case TLT is going much lower which would likely mean that the stock market would be heading above the 2018 highs soon.
EUR/USD is approaching the top of that bullish falling wedge I’ve been monitoring & appears poised for a break out soon. If so, that could help to confirm the next buy signal for gold and/or the mining stocks as a breakout in EUR/USD is analogous to the breakdown in the US Dollar and a falling Dollar is bullish for gold.