In our Dec 29 update on XLF, we noted that the rising white channel from Aug 24 and an important TL would be tested were the SMA200 to hold.
Note that XLF just tested its 200-day moving average at the top of the falling red channel within the rising white channel which is, itself, rising within a larger falling white channel.
If it breaks out, then the top of the falling white channel and/or the rising white channel midline is the next overhead resistance to consider. If it doesn’t break out, then we should see the rising white channel fall and the yellow TL tested again
Not only did the rising white channel break down, but the yellow neckline failed as well. Given these bearish developments, we’re left to wonder just how much worse things can get.
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