Comparative Analysis of Financials

3C is named such as a simple reminder, "Compare, compare, compare". Sometimes you'll be surprised where you find solid correlations that help you figure out what the path of highest probability is.

Here I'm comparing XLF (Financials) vs. FAS (3x leveraged long Financials) which should look similar to XLF and the 3rd comparison is FAZ (3x leveraged short Financials), which should look like the mirror opposite of XLF and FAS.

What I've found is good confirmation between the 3 in multiple timeframes. It also appears that the divergences and the timeframes thy occur on support the view of the next trend being a short term pullback, however, XLF, like many of the averages, has the 15 min chart in an important area in which a short term pullback could turn in to something more dramatic tot he downside. The longer term charts which are not here because they don't quite apply yet, still suggest 1 move higher and likely a strong one before the Primary bear trend re-aserts itself and we move from shop to a more trending market.

 XLF intraday 1 min is pretty much in line, we are starting to see these 1 min charts fall apart as per the last post.

 XLF 2 min leading negative

 FAS 2 min leading negative

 FAZ 2 min leading positive

 XLF 3 min leading negative


 FAS 3 min leading negative

 FAZ 3 min leading positive

 XLF 5 min leading negative

 FAZ 5 min leading positive

 FAS 5 min leading negative (like XLF)

 XLF's 15 min chart is in a negative area already, however should it worsen, the near term outlook would likely have to be revised.

At 30 min XLF is largely in line and longer term doesn't look as bad, this suggests that there is still a trend up after a pullback and before the primary trend re-emerges.