Futures are down sharply as yesterday’s currency moves and VIX smackdown are being unwound by Moody’s banking downgrades. At least banks aren’t waking up to a 40% windfall profit tax such as Italy just imposed. This timely bit of truthiness certainly has the potential to get ES to our SMA50 target in the lead up … continue reading →
Tag Archives: xlf
After being stuck in a textbook triangle pattern for almost six months, XLF finally broke out last week. We noted its having reached overhead resistance a few weeks ago [see: Yield Curve Model – Correction Imminent.] At the time, the 2s10s was threatening a breakout which, per our model, suggested a downturn for equities in … continue reading →
Our yield curve model is again sounding the alarm on overpriced equities. Unless the 10Y – which closed its June 8 gap this morning – declines sharply right away, the 2s10s spread signals a sharp equity downturn to finish the correction which began on Oct 12.The bad news for equities? A sharp drop in the … continue reading →
As the cause of the global financial crisis, the financial sector caught the brunt of the melt-down — falling 85% between 2007 and 2009 versus SPX’s mere 57%. Since bottoming in Mar 2009, it has continued to move in exaggerated fashion relative to sectors receiving lesser freebies from its servants on Capitol Hill and Constitution … continue reading →
XLF spent about 6 weeks dallying around the .382 retracement of its fall from 38.15 to 5.88, finally squirting through in late April. Like SPX, it peaked on May 22 — only to tumble 8.6% (versus 7.5% for SPX.) The Jun 24 bottom wasn’t particularly motivated by a harmonic pattern or channel; it simply turned … continue reading →
On April 2, 2012, SPX completed a Butterfly Pattern at 1421 — the 1.272 extension of the July – October 2011 plunge. It provided a great entry point for the fledgling pebblewriter.com’s first major short position. We scored over 20% in about 2 months [see: All the Pretty Butterflies] trading the 11% decline. XLF hadn’t … continue reading →
Financials have had a great run ever since we called the June 4, 2012 bottom [see: So Crazy, It Just Might Work]. But, all good things must come to an end. I’d give them another few days/points at most. I had jumped on the short side Mar 27, 2012 [see: End of the Line and … continue reading →
Around the horn with major indices and currencies… Like SPX, most are at a threshold where they must either break down or break out (I think “break down,” but we’ll know soon enough.) Coming up: VIX, RUT, COMP, NYA, NDX, DJIA, FTSE, SPX, DX, EURUSD, USDJPY, AUDUSD, CL, GC, SI. And, yes, I’m happy … continue reading →
The last time I devoted an entire post to financials [June 5: So Crazy, it Just Might Work] XLF was down nearly 19% from its March highs. I held my breath and made some ridiculously bullish predictions. But, all good things must come to an end, and I think the tide is turning for financials. … continue reading →
As a member correctly pointed out in his comment on XLF Update, a ramp in XLF would mean some big returns for important components such as BAC, C, JPM, etc. This is very true. Though it pains me to say it, I think banks are ready for a bounce. I sold all my remaining JPM, … continue reading →