XLF rally from blue box delivers risk‑free setup

XLF (State Street Financial Select Sector SPDR ETF) has shown a bullish impulse since the June 3, 2026 low. The 1‑hour Elliott Wave structure favors further upside as the ETF has been making higher highs and higher lows, which supports a buy‑the‑dip approach at defined blue box areas.

Elliott Wave technical view from June 19 2026

The rally from the June 3 low is unfolding as an impulse.

The advance completed wave ((iii)) at $54.89.

A corrective wave ((iv)) followed, unfolding as a zigzag:

• Wave (a) ended at $53.90.
• Wave (b) bounced to $54.61.
• Wave (c) reached the blue‑box area near $53.62–$53.00 (equal‑legs zone).

Buyers were expected to appear in that blue box, offering a low‑risk long entry and the potential for at least a three‑wave bounce.

Updated one‑hour view from June 23 2026

After the blue‑box reaction, XLF produced a clean rally that allowed members to establish risk‑free long positions once protective stops were in place.

A break above the prior $54.89 high is required to confirm the next leg higher.

Initial upside targets on confirmation are $55.29 and $55.94 before a likely profit‑taking pullback that may unfold in 3 or 7 swings.

Key levels and rules

Invalidation / Critical Support: below the blue‑box low near $53.00 (use chart‑specific invalidation).

Short‑term confirmation: break and hold above $54.89.    

Targets on confirmation: $55.29; $55.94.

Trade plan: buy dips into blue boxes using 3, 7, or 11‑swing sequences; place stop‑losses below the invalidation pivot and scale into winners.

Trading insight

Maintain a bullish bias while the impulse structure and higher‑high sequence remain intact. Use corrective pullbacks to the blue‑box zones as defined entry areas, then manage positions with clearly defined stop‑losses and profit targets. This approach lets you create risk‑defined or near risk‑free positions once the trade is in your favor. Discipline in risk and money management, combined with a working knowledge of Elliott Wave and cycle relationships, is essential to execute this plan consistently.