Jun 23 2009
Old buddy XLF
Yeah it’s late, but I just stumbled into a very nice setup that I like. I just pulled up a chart of XLF for the first time in quite some time and I like what I see on the short side. Trading XLF last year was my second biggest winner after TWM and I remember that well.
Boys and girls, it’s hard to find something that looks this pretty. I see a 200 MA that has held for the last 6 weeks. The 200 MA is declining and the 20 and 50 MAs are now flat. We had steadily increasing volume on the decline and steadily decreasing volume on the advance.
There’s no way I am shorting it at this price. I will not chase it to the downside. If I miss it, then I miss it. Get me a pullback up to halfway between the 50 MA and the 200 MA and I am going to short it with a stop over the 200 MA.
What’s probably going to end up happening instead is I’ll take the short right under the 50 MA, and then I’ll get burned all the way to the 200 MA before it turns around.