Financials Update

After this post, I'm going to throw out some trade ideas for you, whatever is going on here, it seems clear that we are nearing a reversal so I want you to have some ideas for your watchlist. I will warn, reversals, tops, even bottoms are accompanied typically by exceptional volatility, I would personally be in favor of wider stops even if it meant taking fewer shares. You can always add to a trade moving in your favor, especially if it is a short trade (not an inverse ETF). Here's an explanation...

Since Financials have held up best today, which makes sense considering the Euro is not there to support Energy and AAPL seems to have disappointed as far as tech goes, here are Financials.

 Long term 60 min XLF from confirmation to a negative divergence to a leading negative divergence.

 15 min leading negative divergence and also in a rather flat area of price.

 The 5 min chart, like most other charts yesterday and earlier today shows a positive divergence and then a leading positive, that has started to fall apart a bit.

 Shorter term, the weakness on the 5 min chart is coming directly from the 1 and 2 min chart below and above.

1 min chart leading negative today.

Just to demonstrate the change today and confirmation of it, below are FAS which is essentially the same as XLF, just 3x leveraged, then SKF which is the bear financial 2x leveraged (note this should have the opposite divergence of XLF and FAS for confirmation) and then FAZ which is financials bear 3X leveraged and should look like SKF and the opposite of XLF/FAS for confirmation. Also note the difference or change and 1 p.m. today. Also for quick short coverage in financials, you can use SKF 2x or FAZ 3x leveraged inverse ETFs that will give you short exposure to Financials (although you buy them like you would any stock, they are inverse so being long SKF/FAZ is being short financials).

 FAS Financial Bull 3x ETF, note the 1 pm negative divergence

 FAS 2 min also a leading negative divergence around 1 p.m. -this confirms what we see in XLF/Financials.

 Weakness is making its way to the 5 min chart.

 This is SKF, Financial Bear 2x leveraged, for confirmation of the above charts, we should see positive divergences.

 SKF 2 min leading positive

 SKF 5 min is starting to see the same positive divergence, remember the short time frames bleed in to the longer ones if they are strong enough, the longer the timeframe, the more important the divergence.

 FAZ 3x Financial Bear positive divergence

 FAZ 2 min with a negative yesterday as expected and a positive leading today.

And that 2 min divergence is making tis way to the 5 min chart.