Sunday, October 2, 2011

Financial Services Sector Down -23% for Quarter (Chart) *Downtrend since February peak* XLF

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XLF peaked on February 18, 2011 at an intraday high of 17.20 and close of 17.18

XLF Overview XLF, the Financial Services SPDR, ETF, closed the quarter-ended September 30, 2011 at 11.18 and was down -23.06% for the quarter. XLF is down -25.96% for 2011 and up +88.66% from the March 9, 2009 market cyclical low. A multi-year peak close of 17.18 was reached February 18, 2011, the highest close since 17.33 on October 14, 2008. XLF is now -31.26% below this recent peak.

S&P 500 By comparison, the overall market, the S&P 500, was down -0.44% for the week, was down -7.18% for September, was down -14.33% for the quarter, is down -10.04% for 2011, and is up +67.24% since the March 9, 2009 market cyclical low. SPX closed at a multi-year closing high of 1363.61 on April 29, 2011, the highest close since the June 9, 2008 close of 1404.05, and is now -17.03% below that peak. XLF is outperforming the overall market long-term since the March 9, 2009 market bottom, underperforming the market in 2011 though both are negative, and underpeformed the market for the quarter-ended 9-30-11. A review of the S&P 500 is here, S&P 500 Closes Quarter Down -14.3% (Chart) *USA recession ahead?*.

XLF Daily Chart Below is a daily chart of the XLF since the February 18, 2011 multi-year peak to illustrate the overall price decline and interactions.

XLF Chart Review
Intermediate-Term Trend: descending 25d avg < descending 50d avg, XLF < both, bearish
Long-Term Trend: XLF < 10m ema 14.51, bearish
Key Resistance: 20d avg 12.32, trading range midpoint 12.41, 50d avg 12.99
Key Support: trading range closing low 11.56, trading range intraday low 11.34
Moving Averages: below 20d, 50d, 100d, 200d, 400d avgs
Uptrend Line: above since 9-23-11, line from 3-6-09 lo 6.18 to 9-22-11 lo 11.56
Downtrend Line: below since 8-2-11, line from 6-1-07 hi 38.02 to 2-18-11 hi 17.18
RSI 14-Day: 42.51 is reasonable, descending
RSI 28-Day: 48.92 is reasonable, descending
MACD (12,26,9): = 0.00, descending
Volume: lower 96.2M latest day, 50-day avg = 122.2M

Conclusion XLF is trading at levels last seen in July 2009. Economic, fiscal, and political uncertainties along with financial system uncertainties have pulled XLF, along with the equity markets, downwards. By peaking on 2-18-11 at a multi-year high  and then generally downtrending, XLF was a leading indicator of the the S&P 500 peak on 4-29-11 and subsequent general descent. The intermediate-term indicator is bearish and the long-term indicator is bearish.
● 200-Day Average XLF dropped below the 200-day average (15.25) on June 1, 2011 and continues well below.
● 300-Day Average XLF dropped below the 300-day average (15.04) on July 25, 2011 and continues well below.
400-Day Average XLF dropped below the 400-day average (15.10) on July 25, 2011 and continues well below.
● Fibonacci 23.6% Retracement XLF dropped below the Fibonacci 23.6% retracement (13.69) on August 5, 2011 and continues well below. The Fibonacci range utilized is from the 6-1-07 cyclical closing high of 38.02 down through the 3-6-09 cyclical closing low of 6.18.

XLF Portfolio Holdings These top 10 holding comprise 50.59% of the total holdings. The top 10 holdings, the estimated weight, of the Financials SPDR, at September 30, 2011, are:
Wells Fargo 9.10%
Not Stated 8.92%
JPMorgan Chase 8.39%
Citigroup 5.34%
Bank of America 4.43%
Goldman Sachs 3.42%
American Express 3.33%
U.S. Bancorp 3.23%
Simon Property Group 2.31%
MetLife 2.12%

About the XLF The XLF represents an estimated 13.59% of the S&P 500 by weight. A wide array of diversified financial service firms are featured in this sector with business lines ranging from investment management to commercial and investment banking. Among the companies included in the Index are JPMorgan Chase, Wells Fargo, and BankAmerica Corp.

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