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XLF Descending Broadening Wedge Pattern

I had an inquiry on XLF (Financial Sector ETF) from member @dpandita. After essentially hitting the measured target for the 2015-2016 Inverse Head & Shoulders pattern, XLF has been forming a Descending Broadening Wedge Pattern. An upside breakdown of the pattern & break above the recent highs would be bullish while a downside break of the pattern would obviously have bearish implications.

XLF daily Feb 3rd

XLF daily Feb 3rd

The catalyst behind today’s nearly 2% gain in XLF as well as the 2.58% gain in KRE (Regional Bank ETF) & the primary driver of why SPY & IWM significantly outperformed QQQ (which doesn’t contain any financials and IWM being very top heavy regional banks & other financials) today was the following headline: Trump Signs Executive Actions Toward Scaling Back Dodd-Frank (source: WSJ.com)

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Feb 3, 2017 4:07pm|Categories: Equity Market Analysis|Tags: , , , , , |Comments Off on XLF Descending Broadening Wedge Pattern