XLF Trade Setup & Entry

I've been pounding the bearish drums on the financial sector in recent weeks & XLF (Financial Sector ETF) is starting to move below this bearish rising wedge pattern. An impulsive move & close below will sharply increase the odds of a correction in the financial sector. As such, XLF will be added as an Active Short Trade here on what I believe to be an imminent break below this 60-minute support zone as well as the bearish rising wedge pattern on the daily time frame. T1 at 23.93 is the sole target at this time with additional targets likely to be added soon.

As this is a somewhat anticipatory trade, meaning that we don't yet have an impulsive break below the 60-minute support zone nor an impulsive breakdown & daily close below the rising wedge pattern, my suggestion would be to initiate a position with a beta-adjustment of 0.50-0.75 (i.e.- a ½ - ¾ position), bringing it up to a full position (beta adjustment of 1.0) if & when XLF either starts to move impulsive lower and/or prints a solid daily close below 24.60. The suggested stop at this time is any move above 24.81 (a 3:1 R/R if only targeting T1). Also make sure to make the appropriate adjustment to your position size if using any of the leveraged ETFs such as SKF, FAZ, FAS, etc.. as your proxy for a short on the financials, assuming that this trade meshes with your trading style, risk tolerance as well as your views on where the financials are headed.

Mar 17, 2017 10:38am|Categories: Completed Trades - Short|Tags: |1 Comment

One Comment

  1. rsotc March 17, 2017 11:17 am at 11:17 am

    Just wrapped up a brief video analysis of the financial sector (XLF) including the technical outlook, key support levels & price targets for the largest components. Video is processing & uploading now, should be published shortly.


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