Today’s State of the Chart focuses on the finnies – specifically the XLF.  I’ll chart this ETF in three time frames: weekly, daily, and 60 minute – starting with the weekly.

This chart is the most important of the series, in my opinion.  The weekly symmetrical triangle that has formed just below strong resistance is a very important pattern to watch.  Also worthy of attention is the 50 level on the RSI, and the weakening PPO.  Symmetrical triangles are often continuation patterns – and on weeklies these formations can be particularly powerful – but a break in either direction is what I will be looking for.  This is long-term charting- which is usually not my style- but this is a strong move building, and will play a big role in overall market direction, making it worthy of paying close attention.

The daily chart shows the important moving average battle currently taking place.  The 200dSMA has been dragging down the XLF for nearly two months, but the XLF plotted a hammer above this critical MA in today’s session.  The 200dEMA is still well above current price at 12.94, and there is a confluence of MA support from the 20, 200, and 50 SMA’s in the 11.75 to 12.05 range.  These levels will remain very important, and I expect breaks to reveal near-term moves.

The final time frame is the 60 minute chart.  I’ve posted this series of three triangles on twitter for weeks, and we see the 3rd broke to the downside, yet did not take out 11.30 support.  Unless that support is convincingly broken, the XLF remains range bound between 11.30 and 12.70.

In summary: the ‘State of the Chart’ for the XLF is best revealed in the weekly symmetrical triangle.  I believe the weekly time frame is where we will see the big move in either direction materialize.  Meanwhile the moving average battle continues on the dailies, and the horizontal range lingers on the hourly.

Watch the state of the chart and trade accordingly.

Regards and Happy Trading,

@theEquilibrium

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