{"id":21672,"date":"2024-03-22T07:30:01","date_gmt":"2024-03-22T11:30:01","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21672"},"modified":"2024-03-22T07:30:01","modified_gmt":"2024-03-22T11:30:01","slug":"the-financial-sector-is-about-to-rest","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-financial-sector-is-about-to-rest\/","title":{"rendered":"The Financial Sector Is About to Rest\u2026"},"content":{"rendered":"

The financial sector could use a rest.<\/p>\n

Financial stocks have been leading the market higher since October. The Financial Select Sector Fund (XLF) is up 32% over the past five months. It hit a new all-time high yesterday. And, institutional investors are shoveling money into the sector as they dress up their portfolios for the end of the quarter.<\/p>\n

But, there’s a giant “CAUTION” sign flashing over the sector right now. The Financial Sector Bullish Percent Index (BPFINA) just triggered a sell signal.<\/p>\n

Take a look…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

Longtime readers know that a bullish percent index<\/strong><\/a> (BPI) shows the percentage of stocks in a sector that are trading in bullish technical patterns. It’s an easy way to measure overbought and oversold conditions for a sector.<\/p>\n

Typically, a reading above 80 – meaning 80% of the stocks are trading in bullish technical patterns – means a sector is overbought. Readings below 30 indicate oversold conditions.<\/p>\n

Buy and sell signals occur when a BPI reaches extreme levels and then reverses. For example, when a BPI rallies above 80 and then turns lower it generates a sell signal. When a BPI dips below 30 and then turns higher, that’s usually time to buy.<\/p>\n

The red arrows on the chart show the BPFINA sell signals over the past 16 months.<\/p>\n

Here’s how XLF behaved following each of those signals…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

Two of the three previous sell signals preceded sharp declines in the financial sector. XLF fell 14% in one month following the sell signal in February 2022. It fell 6% in one month when the BPFINA said “sell” last July.<\/p>\n

<\/p>\n

\n
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Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

The sell signal in December played out differently, though. Rather than falling, XLF merely chopped around for a month before resuming its rally.<\/p>\n

So, how will the current sell signal play out?<\/p>\n

There’s no way to know for sure. But, based on the action following the sell signals last year, there’s a 67% chance the financial sector will be trading lower one month from now. There’s a 33% chance it marks time, consolidates, and builds up energy to fuel another move higher.<\/p>\n

Either way, it looks to me like the financial sector will be taking a break for the next few weeks.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark<\/p>\n","protected":false},"excerpt":{"rendered":"

The financial sector could use a rest.<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-21672","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21672"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21672\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21672"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21672"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21672"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21672"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}