Financial select sector $XLF extreme areas offering buying opportunities

In today’s article, we’ll examine the recent performance of Financial Select Sector ($XLF) through the lens of Elliott Wave Theory. We’ll review how the rally from the August 01, 2025 low unfolded as a 5-wave impulse followed by a 3-swing correction (ABC) and discuss our forecast for the next move. Let’s dive into the structure and expectations for this ETF.

Five wave impulse structure + ABC correction

$XLF one-hour Elliott Wave chart 9.24.2025

In the 1-hour Elliott Wave count from Sep 24, 2025, we saw that $XLF completed a 5-wave impulsive cycle at red 1. As expected, this initial wave prompted a pullback. We anticipated this pullback to unfold in 3 swings, likely finding buyers in the equal legs area between $53.62 and $53.08.

This setup aligns with a typical Elliott Wave correction pattern (ABC), in which the market pauses briefly before resuming its primary trend.

$XLF one-hour Elliott Wave chart 6.23.2025

The weekend update, from Sep 28, 2025, shows that the ETF bounced as predicted allow longs to get risk free. Currently, it is trading higher in wave ((x)) connector before a double correction takes place. A break above 54.51 will open the next leg higher and negate any lower prices.

Conclusion

In conclusion, our Elliott Wave analysis of Financial Select Sector ($XLF) suggests that it remains supported against August 2025 lows. As a result, traders should buy the dips and monitor the $56–$58 zone as the next potential target. In the meantime, keep an eye out for any corrective pullbacks that may offer entry opportunities. By applying Elliott Wave Theory, traders can better anticipate the structure of upcoming moves and enhance risk management in volatile markets.