XLF / Financials Update

This is a pretty neat set of charts, multiple timeframe analysis is pretty easy here and you get a good feel for strength in each timeframe.

 The 4 hour chart is the highest probabilities, it's the long term trend of underlying action.

The leading negative here is a very serious deal, however it is a primary trend so the trade has to be set up for that, luckily it pretty much is. There was a resistance zone just above $22 that looked fairly probable to be taken out, wait until you see where it was and what happened.

The accumulation for the move to take out that yellow trendline was Jan 27th through Feb 6th, the same as the overall market that we have seen time and time again and that we saw as it was happening and even allowing us to predict days and in some cases weeks in advance. The actual move above triggered bulls to buy as a new breakout move does, but you have to know whether it's a real breakout in which case 3C would confirm with a higher high or a bull trap/head fake in which case you get distribution of the event, this was market wide so it's not surprising that it was there in Financials as well so this is a really nice looking entry area for XLF short or FAZ long as new positions or even add to.

I'm not going through every timeframe, but we're not hiding anything either, I skipped to the 15 min, we see distribution at the former high sending price lower and much stronger distribution on the head fake move, this leaves XLF in a much weaker position, but an excellent entry area.

Since we are now looking at the short term market movements around 2-3 min charts, here's the 3 min with a relative positive from the 7th (last Friday) where we saw others as well to allow us to have a game plan for this week and of course this morning's gap down was accumulated, but again nothing beyond 5 mins (that chart is leading negative), so we have a weak XLF, if we can get a little upside here this too will be right there on the list of short candidates that I'd like to hit as close as possible to the pivot from stage 3 to decline.

The 1 min chart looks smlar to others today with the lows accumulated, this is why I thought this morning's SPY shakeout of longs from the last 6 days all at a loss on the open was a minor head fake, but I really like this set up, it's another "Come to us", but truth be told I'm really getting myopic with htis, years ago I'd have entered this and just sat still and let it come around, we have better tools now and a better understanding of the games, but there's no doubt XLF is in a great area, low risk, high probabilities and very weak.

I'd set some price alerts just to remind you , maybe something from $22.20-$22.40-ish.