Financials Update

 XLF's bearish ascending wedge and the typical head fake move. Wedges are "supposed" to break down at the apex, if you look at the last candle in the apex it even hints at that, but as we have seen so many times before, a breakout causes a lot of havoc for traders expecting a breakdown. The breakdown almost always comes as the wedge is for real, it's just the manipulation of the pattern between the apex and that actual breakdown that has changed.

 XLF 60 min chart has reached a new leading lows and quickly. The majority of the downside 3C action took place at the breakout area, which makes sense as that is what the false breakout is used for the purpose of distribution, whether selling or short selling.

 The 30 min chart shows the same, especially in the breakout area.

 The 15 min chart is more detailed and really shows the 3C deterioration at the breakout area in yellow.

 The 1 min chart shows some price strength today, although 3C remains on a downward trajectory. Shorting in to strength is not easy, but it is usually the lowest risk entry and the probabilities as you can see above look good.

 FAZ, the 3x bear financial ETF looks similar to XLF, just the mirror reversal.

 The 30 min 3C chart is very positive.

 Again the 15 min chart shows the detail of accumulation in the false breakdown area.

As well as the 2 min chart.

FAZ if good for leverage and especially swing type moves. Some of the Financial shorts I have mentioned recently and others that look pretty good include:

JPM, BAC (although I favor trading this with in the money Puts a month or two out and on a swing basis), MS (this is another I would favor Puts for the leverage), GS looks decent for a swing move for the next leg down, MBI, although not a true financial in the sense of the others, it's close enough,WFC also looks interesting.

Although I mention "Swing' trades, I'm a believer in taking what the market offers, this means I would not set a swing target, but let the market tell you where the trade is going; it may very well turn in to a nice position trade. I just prefer to view the initial trade as a swing trade, especially for risk management planning. While we are on the subject of risk management, on initial entries, I prefer to phase in to the trade; entering a short position on strength is like a gift, although adding to the position as it moves in your favor is also a good idea. I would go for the widest stop that is sensible for the initial trade entry, the way I use risk management, this means taking on fewer shares, but you can always add.