Warning, warning, financials in huge problems

XLF was for some time in a bullish and bearish mode opportunity. There were chances for bulls as it was close to triggering the bullish reversal pattern, the inverted head, and the shoulder, but it failed. On the other side, bears did have their reversal pattern, a rising wedge that was broken yesterday, triggering a sell signal. This is a zone/situation in which XLF could drop really hard and really fast.

Volume is increasing on the drop, which is bearish.
We are still above the 50-day MA and BigRed, which is neutral due to the fact we are below the 20-day MA.
RSI is dropping hard, signaling weak market conditions.
MACD is ticking strong red while the MACD line starts to fall hard.

Overall, with the triggering of the rising wedge and breaking below the trendline, there is a really small chance for bulls for some time now. There could be some kind of retesting of that broken trendline, but only retesting after which I expect the price will dive just like that. The first major support should be where there is BigRed and a block area from the end of 2022. The chances for that to hold are not big.

For bulls, the only last hope is that we don't make a lower low (blue dotted line), but it is only a hope as it seems for now.

Yorum:

Proof of how a rising wedge is a powerful bearish formation.