Financials and the fear of missing out…

Below is another chart fusing together the technical backdrop for the Financial Sector (chart by my partner Arun Chopra) with some fundamental bullets listed below (by myself). Today we look at the huge rally in Financial stocks (NYSEARCA:XLE).

Here’s some bullets to consider while reviewing the chart below. Note that the chart was shared over on our website last week… note that XLF closed this week lower at 23.36; TYX higher at 31.84; and the Japanese Yen lower at 84.79.

  • In Summer 2016, Treasury yields capitulated and bottomed as “negative yield” sentiment was the rage.
  • Yields broke out and the Yen broke down after Brexit when global yields backed up and the BOJ started Yield targeting.
  • Meanwhile banks had been forming inverted head and shoulders, higher yields helped them reach the neckline, and they broke out on election results and anticipation of stimulus and still higher yields to come.

Sometimes a text from a friend can validate what the charts are showing – fear of missing out or FOMO – something teens have now borrowed from the financial world.

xlf-financials-banks-stock-chart-fear-of-missing-out-rally-december

 

Thanks for reading.

 

Twitter:  @FusionPtCapital

The authors may have positions in mentioned securities by the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

Not Investment Advice – Please read investment disclaimer.