Sector Analysis Using Pure Price Action

[Gringo]

Financial index it showing no sign of weakness. The only check is that it has gone beyond the overbought area. This though could also mean that the upward trend has accelerated.

Notice how price has generally stayed above the mean of the TC. I am not so keen on shorting the financials.

Gringo

 

[k p]

I gotta say Gringo... that is a beautiful trend channel! Its just incredible how the two swing lows that set up the lower line, complete with the swing high between the two that gives you the upper line, and then the resulting mean, provides so much information months/years later!

The only bitch about it is that overbought level. On the one hand you're thinking overbought and hence you want to short, on the other hand, you gotta be aware that traders might after all have formed a new mean, especially since price hasn't even come down to the lower line in so long, and that attempt a few months back didn't quite make it. Do you consider this? I like how in the NQ, Db has show successively steeper channels going up over the years.

 

[llIHeroic]

I agree with you on staying away from a short Gringo. Even at the minimum I think there is at least one more pair of Down/Up legs before we might start to see a more serious return to the other side of the channel you drew based on the behavior XLF is exhibiting at the time being. Coincidentally, AAL seems to be in a similar spot recently if anyone wants to study how trends behave as they accelerate.

As always, thanks for the content Gringo. I enjoy your threads very much.

 

[Gringo]

Financials at least in my eyes are not easy to short, simply because of the government involvement and the smacking they like to give to those who disagree with the rosy financial picture.

The way demand is unrelenting it could turn into a sprint upwards like the one in the year 2000. Fundamentals are out of question here. If government starts buying shares the wise thing for us is to let them, and just ride the elephant.

 

[dbphoenix]

Financials at least in my eyes are not easy to short, simply because of the government involvement and the smacking they like to give to those who disagree with the rosy financial picture.

The way demand is unrelenting it could turn into a sprint upwards like the one in the year 2000. Fundamentals are out of question here. If government starts buying shares the wise thing for us is to let them, and just ride the elephant.

Actually there was no sprint in the Dow or the SPX. However, one can expect strength -- or at least a holding pattern -- until the end of the year.

 

[Gringo]

Actually there was no sprint in the Dow or the SPX. However, one can expect strength -- or at least a holding pattern -- until the end of the year.

You're right, I had Nasdaq in mind when I was talking about the run up in 2000.

 

[Gringo]

XLF is going strong but it would be wise to stay alert here.

The red angle of ascent may look different in both charts but the information is still the same.

Gringo

 

[dbphoenix]

Did you notice that the XLE broke out and is retracing?

 

[Gringo]

Did you notice that the XLE broke out and is retracing?

I don't follow these as much. Q is my abode. Even gold, silver etc., I tend to avoid now. When something simpler is there why mess with with the trickier.

Today I did see gas prices suddenly a bit higher. I was like oh, oil must have pulled something off. And here you are mentioning it. For entertainment.

I think you were having a discussion with someone a few weeks back regarding the 44 break or 54/55 break. I can't recall now with whom.

Gringo

 

[dbphoenix]

I don't follow these as much. Q is my abode. Even gold, silver etc., I tend to avoid now. When something simpler is there why mess with with the trickier.

Today I did see gas prices suddenly a bit higher. I was like oh, oil must have pulled something off. And here you are mentioning it. For entertainment.

I think you were having a discussion with someone a few weeks back regarding the 44 break or 54/55 break. I can't recall now with whom.

Gringo

Not entertainment. I'm getting ready to place orders.

As for CL, I brought this up last February on the CL thread, but they all laughed so I didn't post anything further. But now that it's "broken out", I'm interested. You know, buy low, sell high? What the ET pros are always talking about?