As per my previous post on 28 July, Financials and Energy sector has been the area I have noticed to be a laggard and would have a higher probability of a upward move.
If we look at the XLF (Financial ETF), it looks to have been consolidating for a period of time and during that period, big tech stocks have been making major moves. Looking at yesterday's movements, we can see that there is money flowing out from the Tech sector and moving into Energy and Financials. I will cover the Energy sector in a separate post.
XLF Daily
Notably, Bank of America has been consolidating upwards since 20 July and JP Morgan has been consolidating sideways since 13 July. Looking at Bond yields, it is currently at its all time lows and it might potentially move up as it is considered a flight to safety during the whole US China tension.
Looking at the daily chart of BAC, it is likely to touch the 200MA at 28 and the last time it did it went tumbling down so we will need to see if it can break out this time. It is technically a gap fill for the big fall in March if you can see from the charts.
BAC Daily
The chart for JPM is looking pretty ok, with a sideway consolidation over several trading days and we would likely see a move soon if it continues to consolidate at this range. Similar to BAC, there is a gap fill in March and we would likely see resistance when it starts to move up to the 200MA.
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