Chart Request for BAC & Financials

As I have mentioned many times, most people go about looking for stocks/trades completely backwards. They don't say, "A rising tide lifts all boats" for nothing. The fact is the overall direction of the market has the most influence on the majority of stocks, second most influential is the industry groups behavior or what we call sector rotation. However most people look for a trade without understanding the market's most likely path. The first thing you should do when looking for trades is understand where the market is and where it is most likely going, then you can align the correct sector and the correct stock with the market and your probabilities of a successful trade go way up.

So as for BAC and Financials, I wouldn't expect to see anything too different from the market analysis already laid out, an overall bullish tone recently, but within that a likely pullback before a continuation higher. I'd expect to find similar signals in BAC and Financials.

Lets look...

 BAC 1 min chart -negative divergence

 2 min chart showing a current negative divergence, again suggesting a pullback.

 However the 2 min chart did not bleed through to the 3 min chart which is still leading positive, this may indicate that BAC and perhaps Financials in general outperform the market on a relative basis. A pullback may create some second chance opportunities in BAC and other Financials.

 The 15 min chart never really saw much of a negative divergence at the June highs, there is a small one, but I'd say the underlying action looks closer to confirmation of the price trend, meaning that BAC pulled back simple because it was following the market as outlined at the start of the post.

In fact, lets take a quick look...

BAC in green and SPY in red; you can see clearly that BAC was just moving with the market, in fact the relative momentum shows BAC acted better as it didn't make as sharp a low on 6/21-22, nor did it on 6/25.

 Finally the 60 min chart of BAC does show the negative divergence more clearly at the recent highs, but it is a relative negative and not a leading negative (the less powerful of the two). There was a relative positive that turned in to a leading positive in BAC, so overall I'd expect BAC to perform similar to the market, it may even show better relative strength.

As for Financials as a group...

 The 2 min chart shows a clear negative divergence, again suggesting a pullback

 However like the market averages, the divergence has not migrated to the longer 5 min chart, which in my view would imply that the pullback is not very serious. Early today I mentioned that smart money almost always accumulates in to flat price ranges or falling prices, it is VERY rare to see them chasing price higher, typically if price suddenly moves higher on a fundamental surprise, smart money finds a way to create a pullback or shakeout at which point they enter the trade.

Financials 15 min, after seeing a negative divergence creating a deeper pullback than what we'd expect from a 2-3 min negative divergence, is now leading positive above the former high.

Both BAC and Financials as a group also tend to confirm the signals we have been getting from the market since this a.m.