The weekly bars chart below of the XLF (big financials ETF) shows a situation developing where market participants are examining it closely. The XLF recently peaked at the upper blue line of its eight year channel.
This past week the XLF dropped through the lower line of its eight year inner micro channel shown in brown. Over the next few weeks if the XLF continues to decline, investors will be watching for a tradeable setup inside the 16 month red channel. As well supported as the financials are on most days, it would be reasonable to expect the XLF to trade within the red channel for some time even if it ends up later falling to the lower line of the blue channel because of worsening geopolitical situations.
Trade well my friends
Alan
