Last December we noted that XLF, like many indices, had regained a trend line which it had lost.  It was the third time in a row for the ETF that focuses on banks and insurance companies — which kinda made sense.  As we wrote then:

I suppose it’s to be expected, as no sector has benefited from the Fed’s largesse so greatly as have financials.

It would all be amusing were it not for the fact that XLF just closed below a major TL again.

Will it bounce right back as though nothing happened, or will this plunge leave a mark?

continued for members…The close-up shows a clear departure from the white channel, with a wide assortment of downside targets — from a mild test of the 23.88 high to a deeper .886 retrace to 22.10 (also the white .500 Fib.)

The upside target remains 25.82 — the .618 retrace of the 85% crash from 38.15 in 2007 to 5.88 in 2009.