Financial Sector ETF (XLF) 02-02-10

This ETF closed up 0.14 at 14.56.  The range has been about a point and a half.  It is oscillating between the first price objective for the move down and the first price objective for the move up and this has been going on since September of last year.  I missed a great covered call opportunity.  Right now there is upside pressure being applied to price on this chart and yet the momentum to the upside has been rather ho hum.  Not a place to be short, but the upside doesn’t seem to be great. 

Finance Spyder (XLF)

The XLF closed down again today at 14.01 off another 25 cents.  Is all the bad news out yet?  Will Bernanke get reappointed?  Will there actually be bank reform in spite of all the lobbyists working day and night?  Will the banks and investment banks be able to trade with depositors funds?  Will there be a change in the status of Goldman Sachs, Morgan Stanley, Citi, and JP Morgan?  Will the major banks have to divest themselves of their brokerage arms?  All of these questions and more are leading to the unsettling drops in the bank stocks.  Despite all these unknowns there has just been a mild retracement from the highs.  For some it has been painful.   The XLF stopped just above the short cycle price objective at 13.94.  The target for the short cycle and the first price objective for the retracement move down is 13.43.  There shouold be support there if the current short cycle price objective fails to hold price.  The second price objective for the move higher is still in play at 16.23.  These numbers will be slightly off because of compression the chart in order to show these levels. 
There is still downside pressure being applied to price and the indicator is deeper into the over extended area of the chart.

Financial Sector ETF (XLF)

The financial sector has come under fire this past week and it seems to have put a halt to the rally.  The ETF closed up eight cents today at 14.26.  Price has not taken out the December low.  There remains downside pressure on this chart and the indicator is entering the over extended area of the chart.  The chart shows that the financial stocks have basically done nothing since September of last year.  This is either massive distribution or some very smart money is accumulating the stocks in this ETF.  The Obama administration has jaw boned about various restrictions on the banks which they feel will reduce the amount of risk that they can assume and reduce the risk to depositors money.  They are even talking about downsizing the banks into various individual parts rather than existing as giant conglomerates creating various instruments of mass financial distruction.  No more to big to fail.  The markets hate the unknown, and what is about to happen, if anything after the lobbyists get through with it, is unkown.