XLF breaks short-term support
XLF and financials were were down more then the overall market yesterday as selling picked up in this sector. On Tuesday I mentioned to watch XLF because financial stocks lead this market and with yesterday's move it could be signalling some selling is coming.
Broken Support: XLF had not followed the market in climbing higher instead it remained in a range and the short-term support for this range was 14.73. This broken yesterday and sent the stock down over 1%. With this support level broken the next support level is at 14.46 and 14.44( the 20 day ema). If this level fails then the next logical support level is 14.10 which is an unfilled gap from late January.
New Resistance: Now XLF has formed in even greater resistance levels above the current price. Before yesterday XLF had strong resistance from the 14.80's which was formed after the 2011 summer base pattern broke. Now XLF has that resistance to contend with and short-term resistance from the failed highs at 14.86 and the newest resistance level at 14.73.
Overall: XLF breaking down does not show strength in the market as financial tend to lead the market. XLF's decline should stop at 14.46 for now but past that and this sector could go much lower. Keep following this sector its as close to a crystal ball and the market will give you.