Financials

Being Financials was the one group that as of Friday, looked like it alone was holding the market up, I think it's important to look at them and we may even see why they were the group that looked like they were holding the market up.

 First, remember the concept of wedges and how they no longer acted like Technical Analysis said they should, but ultimately they would be fulfilled, well here's a bearish wedge with a head fake breakout-everything TA says "Shouldn't happen". We noticed they move along to form a top or bottom for descending wedges and then eventually move in the direction the wedge implies, this wedge implies down.

 Note the resistance level for XLF/Financials, both Energy and Tech broke ABOVE resistance 7 days ago, perhaps Financials were still holding the market up as they didn't break above resistance until 2 days ago, all 3 candles with very bearish upper wicks too and declining volume. This goes back to the concept of the head fake reversal which we literally see as the last move about 80% of the time right before a reversal.

 XLF 22 min shows a neg. divergence knocking it down to Thursday's lows where we see the same accumulation we saw everywhere that day, lifting the market in many cases above resistance levels that would bring in demand, allowing the head fake trade as demand is needed to sell  or short in to. Since yesterday, XLF has been leading negative below even Thursday's low BEFORE the accumulation started, even though prices are significantly higher!

 Again, the 5 min timeframe is an important confirmation timeframe for intraday charts faster than 5 mins as it also includes some longer term institutional activity, it is leading neg. WELL below Thursday's lows last week. Look how fast this went leading negative after it broke above resistance and was at the highs in a flat trading range (for newer members, accumulation and distribution are VERY often seen in flat trading ranges).

 The 15 min chart, a very important reversal timeframe, it has been leading negative ever since it made a move above last Wednesday's highs, it also additionally went negative at yesterday's highs and today's-"selling in to price strength".

This may be the most damning chart, the 15 min. trend, huge accumulation in June, but since it looks like those shares have been sold in to strength every time they had a chance. As we move in to August, the divergences are so bad they are leading negative and well below the original June 3C level when accumulation of Financials started.

This is a VERY clean signal and a very negative signal.