XLF/Financials

Yesterday we saw an unusual leap in financial stocks, mainly Money Center names like Bank of America, as such XLF broke out to the upside.

This morning we have some news from Bloomberg that probably was the cause of that pop. It seems a settlement is underway in the fraud committed by these banks in all things having to do with foreclosure-YES we are behind the information curve and yesterday that news was being discounted by way of higher prices. It's cynical, but there are two realities, Fraudclosure-gate was (and still could be) likely to be the second shoe to drop in the banking sector. The second and more cynical reality is that if you are connected to Washington by the purse strings, you can count on favors. That's our America, one set of rules for them and another for us.

Still, XLF is acting a bit strangely today. The banks are down a bit, but Financials more broadly are taking it on the chin.

 XLF thus far looking like a bearish engulfing pattern today-(daily chart)

And here's the 3C 1 minute chart from yesterday and today. Note yesterday looks much like the SPY post I just put up, except the gap u[p this morning in XLF, it saw a strong negative divergence right off the open and XLF has traded lower since.

I'm going to take a look at the financial sector, the money center banks don't seem like they ar responsible for the depth of the decline alone, so there may be some opportunity lurking out there in a related financial sector.