Mar8 weekly chart reading: XLF

Last prediction about XLF is wrong.

Weekly chart:

• The uptrend started in Apr 2005 has broken in the last July. Afterward, the trend line was tested once and then the down channel was established.
• The lastprice pattern is triple bottom breakdown. The first one is in Aug 2007, the second one is in Nov 2007, and the third one is in Jan 2008.
• The best possible scenario is to have a fourth bottom, either a sharp bottom or U-bottom, and then reverse this trend.
• Look at the RSI and STO indicators, there is a small space for further downside movemnet, but not much.
• The slope of OBV is very steep, and it may possibly recover a little bit.

Although there is no sign of reversal yet, and the last week's low doesn't look like a near term bottom, it is definitely a bad entry for short/put. There may be a strong a sharp upside movement to push the price to 26.5, and then it may go down again.

Daily chart:

• We are now in a down channel enclosed by two bold solid blue lines.
• Note that every time when RSI touched 30 and STO went below 20, a small upward correction was coming. This is what happens now.
  
• Note that during the last few weeks, every time when the prices went up, the volume was very significant. This is possibly because many people consider the financial sector is standing at an important bottom, and the valuation is low, so they are rushing in.
  
• There are two resistances at about 27 and 30 respectively. There is no good sign to break them yet.
• The volume in the last week was big.

I predict that the sector may go up and down a little bit, then there will be a strong upside movement. From both weekly chart and daily chart, I feel it isn't wise to open the short/put position because of the small potential profit and high risk.