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It was with some concern a few days ago I expressed in a post to my Gold and Diamond members that the financials were breaking to the upside. The failure of the XLF is/was an important part of the prospect for any downtrend in equities. As of this writing, this breakout remains in place, but XLF demands close and constant observation.
Specifically, there are three levels that I am watching: 27.52, 27.10, and 26.75. Breaking any of these would help spoil the bullish breakout and its potential, particularly a failure of 26.75, which would ruin the pattern utterly. As shown below, the XLF had emerged above its long-term descending trendline, but not all hope is lost – – plenty of financial companies reported last night, and it’s not exactly looking like a blowout follow-through is in the offing. Keep an eye on XLF!
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