Yesterday’s 14.35 high on the S&P Financials Index is close to the 1.618 Fib extension from the rally following the 42 trading day -17% decline in the $XLF index. The XLF declined -3.4% intra-day before closing at 13.98.
Today the US Monthly Employment Report is reported before the open and sure to make any pre-market analysis moot. With that caveat, here are today’s daily price signals and pivots for the S&P SPDR financial sector:
Daily Trading Signals
The following daily trading signals were generated for 7 Aug:
The Low Breakout Continuation Setup requires that the preceding trading day’s low needs to be exceeded to confirm a change in trend direction. The signal seeks to take advantage of a pullback in the immediate daily trend.
The Momentum Reversal Buy Signal is a stronger reversal indication than the Low Continuation & Reversal signal. This momentum reversal signals typically fire following a trend move the previous day that has traveled too far, too fast and is accompanied by an extreme short term Relative Strength Index that indicate a very high probability for a reversal. While the Low Continuation Reversal Signal points to a good likelihood for a reversal move sometime during the trading day, the Momentum Rebound Buy Signal use the 1st hour high as a specific price level that needs to be exceeded to trigger the Momentum Rebound Buy Signal.
Exceeding the high reached in 1st hour of trading triggers the Buy signal.
Today’s daily pivot is 14.06, and the weekly pivot is 12.82. Price action above the daily pivot is bullish.
The XLF’s normal trading range is projected to be between 13.74 – 14.23.
The XLF’s extended trading range is projected to be between 13.55 – 14.41.
Specific price levels and projections are discussed on the charts below.
Short term 15 Min & 60 Min
60 min symmetry support is 13.84. The Hourly charts break down with a 60 min close that level. A 60 min close < 13.69 targets 13.28 – 12.99.
Daily
The rally from the 10.83 lows on 10 Jul has gone parabolic on the daily charts, into weekly Fib price extensions between 13.69 – 14.47. A daily close > 14.47 argues for even higher targets between 16.21 and 16.72.
Weekly
The recent 42 trading day -17% decline in the $XLF index, laid the groundwork for the recent rally. However to to put the recent rallies and declines in perspective. The XLF has rallied 144% from the Mar lows into 6 Aug’s 14.35 high.
Long Term Weekly prices stay bullish > 12.10. A daily close below that level should have the index trade back to the swing lows of 10.83.
Updated 15 min, Hourly, Daily, Weekly charts with additional Fib support and projection levels are posted below.
Daily Trading Signals, Pivot Support & Resistance Levels are posted in each section.
How did you trade your FAS puts?
Just bought some out of the money put contracts for speculation. They have not worked. Our rought target is to double our money with this trade but it could also be a 100% loss. Sorry I cannot give you a lot of details in terms of strike and the other positions we took in pair with these puts.
But basically the point is that we are speculating the financials should have a sizable correction.
I’m short FAS at 74.56. I did not expect channel to break. Looks like the market is on our side now.
I agree. Are you a trader?
Yes I trade.