XLF / Financials Update

I already have an October $20 call so I don't have plans to add at this time considering the risk. If the charts improve enough that I trust it, I may look in to adding. This is an area that if I wanted a new XLF Call (short term trading) position, I'd feel fine with taking it here.

Earlier I closed the FAZ trading position that was opened for this very specific reason. FAZ is a 3x short Financials ETF, if I were looking for a short term position in Financials long using equities/ETFs, I'd be looking at adding FAS (3x long Financials).

In a case like this, because I expect the duration of any upside move to be very limited, I prefer more leverage, FAS is a good alternative if you don't trade options, but I'd use something like FAS for a trade I'd expect to work for a week or longer.

Also remember as I said Friday the only areas seeming to get any bullish accumulation attention are those that have the most influence on individual stocks so that is as I said Friday, the main averages and the main industry groups, the 3 heavies being Tech, Financials and Energy. Thus far, i favor Financials and Energy over Tech.

Here are the charts for XLF (Financials 1x)

 The rounding bottom today is very clean, a typical upside reversal pattern, but there's previous support right at $20.11, to hit those stops XLF would need a move below $20.11. I'll probably set an alert and if we get a head fake and price concession, XLF may look more attractive to me to add risk.

The action in to at and after the F_O_M_C, again, the concept of the F_E_D related Knee-Jerk move is AS CLEAR as possible here, this is why I follow objective information and not the emotions that traders have when they see the market move up as it did last Wednesday.

The 3 min leading positive is enough for me to justify holding current XLF long (calls), I think I'd need to see more to add to that position, a move below $20.11 may provide that.

 At 5 mins, there's no migration of anything positive. If you look at volume, you can see this move in XLF down today and under recent support and the F_O_M_C gains, triggered a lot of stops as well as brought shorts in, this is one of the functions of a head fake move. 

However, once again the point being is there's not even a strong 5 min positive in the Industry group which is one of the assets being accumulated for this move, which I described as probably looking like "Noise" on a chart to most people.

The 30 min XLF chart rules all of the charts above, the leading negative hitting a new low in August was bad news, the fact 3C couldn't confirm on the F_O_M_C shows how strong the overall distribution has been and EXACTLY WHY GETTING THOSE POSITION OR CORE TRADES READY, THIS IS THE TREND TO BE TRADING IN MY VIEW or at least be ready to .