XLF Technical Set Up Heading into Bank Earnings

XLF (Financial Sector SPDR ETF) -- Some notable earnings due out tomorrow morning before the open-- JPM, C, WFC, PNC, which could make a difference for this sector, which represents about 14% of the entire S&P 500.

The attached graphic below shows that 5 of the 11 major sectors of the S&P are down for the first half of the year, and XLF is one of them, down 3.1%.

Perhaps tomorrow's results will trigger a catch-up move?

Based purely on the attached weekly chart set up, t XLF peered over the edge of support at 26.50/30 at the end of June, but managed to hold its footing and back away from the edge, but not enough to trigger any significant buy signals.

All of which brings us to tomorrow. To gain any upside traction in reaction to earnings, XLF needs to take out and close above 27.25, which will point to upside continuation that tests its Jan.- July resistance line, now in the vicinity of 27.80. Above 27.80 will begin to morph all of 2018 from a potential topping pattern into a bullish digestion period ahead of the emergence of a new upleg.

Inability of XLF to close above 27.25  will preserve the negatively-biased 2018 distribution topping formation, and as such, will leave XLF vulnerable to another loop down to test critical support at 26.50/30. MJP

XLF

In using any portion of MPTrader, you agree to the Terms and Conditions governing the use of the service as described in this disclaimer. Our disclaimers, policies and terms are subject to change without notice. MPTrader (www.mptrader.com) is published by AdviceTrade, Inc. and MJP Market Strategies, Inc., both of whom are publishers. The Web site is maintained by Codexia, LLC and has a marketing affiliation with The Technical Trader. None of these firms or individuals is registered as a broker-dealer or investment adviser either with the U.S. Securities and Exchange Commission or with any state securities authority. Mr. Paulenoff's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Paulenoff's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions and Mr. Paulenoff and employees of AdviceTrade do not have personal positions in instruments mentioned on the site. Hypothetical performance results do not include trading commissions and other execution costs that would be incurred if the trades referenced in the diary or elsewhere on the site were actual trades. Past performance is no guarantee of future results. MJP Market Strategies, AdviceTrade, and Codexia cannot and do not assess, verify or guarantee the suitability or profitability of any particular investment. The risk of loss in trading index futures can be substantial. You should therefore carefully consider whether such trading is suitablef or you in light of your financial condition. You bear responsibility for your own investment research and decisions and should seek the advice of a qualified securities professional before making any investment. As an express condition of using this service and anytime after ending the service, you agree not to hold any employees of MJP Market Strategies, AdviceTrade, or Codexia or the companies themselves liable for trading losses, lost profits or other damages resulting from your use of information in MPTrader in any form (Web-based, email-based, or downloadable software), and you agree to indemnify and hold MJP Market Strategies, AdviceTrade, and Codexia and their employees harmless from and against any and all claims, losses, liabilities, costs, and expenses (including but not limited to attorneys' fees) arising from your violation of this agreement. This paragraph is not intended to limit rights available to you or to us that may be available under the federal securities laws.