XLF trade ideas
The Financial SectorThe Financial Sector
The following ETFs are related to the Financial Sector. The ETFs track different sections of the financial sector as noted. There are many more ETFs in financial subsections for the USA and international equities. Included for each ETF are the symbol, the total Assets Under Management (AUM), the Number of Shares in circulation (Shares), the Average daily Trading Volume (Avg Volume) for the 3 months prior to 7/12/2017, the Expense Ratio, and the Bull//Bull type as well as the leverage ratio.
I have tried to copy these data carefully but cannot be held responsible for any mistakes made. These data are important because high volume ETFs are liquid which means you can get in and out quickly and there is a smaller spread between the bid and ask price. This affects the actual profitability of the entry and exits trades. The same considerations applies to put and call options. Use the highest volume ETF that you can.
The risk of the 2x and 3x Leveraged ETFs is that the 2x or 3x ration only applies to one trading day. After that, the ratio declines daily due to the rebalancing effect. NEVER hold 2x or 3x ETFs long term as they fall in value over time. For long shorts (in a non margin account or 401k), just buy the 1x Bear ETF. Unfortunately FAZZ is very low volume.
XLF AUM 25.2 Billion, Shares 1,006 M, Avg Volume 73.9 M, Expense Ratio 0.14%, 1x Bull
Broad sector exposure.
VFH AUM 6.0 Billion, Shares 94.7 M, Avg Volume 0.8 M, Expense Ratio 0.10%, 1x Bull
***Note VFH tracks the MSCI US Investable Market Financials 25/50 Index
IYF AUM 1.8 Billion, Shares 16.4 M, Avg Volume 377,765, Expense Ratio 0.44%, 1x Bull
***Note IYF tracks the Dow Jones U.S. Financials Index
UYG AUM 847 Million, Shares 8.0 Million, Avg Volume 46,208, Expense Ratio, 0.95%, 2x Bull Leveraged
***Note UYG tracks the Dow Jones U.S. Financials Index
FAS AUM 1.4 Billion, Shares 29.3 M, Avg Volume 2.7 M , Expense Ratio 1.05%, 3x Bull Leveraged
***Note FAS tracks the Russell 1000 Financial Services Index
FAZ AUM 197 Million, Shares 12 M, Avg Volume 1.7 M, Expense Ratio 1.1%, 3x Bear Leveraged
***Note FAZ tracks the Russell 1000 Financial Services Index
SKF AUM 43.7 Million, Shares 1.7 Million, Avg Volume 38,138, Expense Ratio, 0.95%, 2x Bull Leveraged
***Note UYG tracks the Dow Jones U.S. Financials Index
FINZ AUM 173.0 Million, Shares 0.1 Million, Avg Volume 1,766, Expense Ratio 0.95%, 3x Bear Leveraged
***Note UYG tracks the Dow Jones U.S. Financials Index
FINU AUM 27.1 Million, Shares 0.4 Million, Avg Volume 10,327, Expense Ratio, 0.95%, 3x Bull Leveraged
***Note UYG tracks the Dow Jones U.S. Financials Index
FAZZ AUM 1.7 Million, Shares 0.1 M, Avg Volume 310, Expense Ratio 0.58%, 1x Bear
***Note FAZ tracks the Financial Select Sector Index VERY LOW VOLUME
I put these here for your and my convenience so we can use the elf which fits our needs best. If you know of a higher volume 1x bear etc for this sector, let me know.
For premarket US traders, you can go to STOXXdotcom in the morning and look up symbol SX7P (STOXX® Europe 600 Banks) as a leading indicator of how US banks will be doing.
Near the completion of a long-term 5 wave sequenceXLF is at its final stages of an impulsive move that started back in 2009. Long-term traders I believe should not be bullish and look to protect their positions either by reducing exposure or by raising their stop protections. I believe over the coming years we will see XLF below 20$ again. The April low is an important support that if broken will confirm the end of he impulsive wave and the start of the correction that could push price even towards 15$
Long XLFFor the past few months bank stocks have been getting hammered by the falling 10 year despite solid earnings beats and the raising of the Federal Funds rate by 25 basis points to 1-1.25. However, since the bottom of the XLF in late May @ 23, the XLF has been successfully able to hold its support and now after the stress tests results showed positive cash flows for the major banks able to withstand a recession of great magnitiude, many hiked dividends from anywhere between 3-100% while buying back tons of stock, solidifying strong confidence by management to shareholders and potential investors that their financial health is the best since pre-recession of 2008.
On a technical side, we see a breakout of the dreaded head and shoulders pattern in a bullish manner by holding the 23 support (the neckline) and busting through the head of resistance at 24.02 on high volume and strong relative strength indicating the price movement is legit and not a head fake like it was in May where the MACD crossed in a bearish manner and RSI quickly depleted indicating a roll over top.
I am bullish on XLF to 25.29 and then to 28.87 over the next 6-12 months, indicating an increase of approx. 15% on at least one more rate increase this year and potentially 3 next year pending continued job growth and rising inflation, as well as the idea of the Fed re-structuring the balance sheet and unleashing trillions of bonds and mbs onto the market from the recession of 2008, which will push the 10 year yield higher and widen the 2-10s spread further profiting the banks.
XLF POTENTIAL SHORTS. IF THIS DOES NOT WORK OUT TRADE THE SIMPLE BREAKOUT RETEST. BANK EARNINGS COMING UP ON JULY 14TH.
XLF Bat formation Potential reversal to 24.2 possible. XLF bat formation complete. Potential reversal to 24.2 possible
Financials about to complete a second bearish harmonic patternNotice the Sell Zone shown in this chart
The financial sector is forming a a descending triangle.This is usually a bearish pattern. The big trade is to wait for a breakout to either side. A short position can be opened here with a stop loss above the descending line. I will open a long position in FAZ (3x Financial Bear) at the market open this AM.
XLF surges on house vote, but don't buy into the move.XLF, the financial services ETF, surged as the House voted to repeal Dodd-Frank. However, financials are staring a wall of delinquencies in the face as the delinquency rate continues to rise higher. This will have a bigger effect on the market than passing this legislation. The delinquency rate continues to rise after the surge in lending at the end of 2016.
I am looking to short XLF. The economy is not as robust as most participants wearing blinders want to believe. Given this, XLF is a short at these levels. There will be more data coming through that iterates where the economy truly is.
XLF surges on House vote repeal Dodd-Frank, but don't buy.Dodd-Frank got closer to being repealed and likely the Senate will follow suit, from what I he been reading. However, the financial sector is facing a wall of delinquencies as the rate continues to climb. That would be a far greater market mover than the repeal of the legislation that would ultimately prevent financials from getting a wall of delinquencies. It is kind of ironic, if you think about it.
I am more interested in selling financials and this may be good starting point to enter a short. The financials are facing dire times ahead. This is a short-term boost that allows a short seller a better vantage to sell.
XLF, will Mdm Y do special stunt again?9 days ago, my XLF post shown that price has broken down the 2009 uptrend line twice in 3 months.
To add matter worst, we have a 2 consecutive weekly close for the recent break down.
Technically, i find this really unhealthy even if Mdm Y decides to do something to push the price back into uptrend line
Financial Sector Could Drop ?A probable Head & Shoulder formation could be in place, with the neckline standing at 22.90$. if Broken ultimate target would be 20.50$.
