Despite Bumper Earnings, This Sector Could Be Due for a Pullback

[Trading With Larry Benedict]( Larry’s Note: If you’ve been hearing a lot about Bitcoin lately, it’s only natural… It’s gone on a tear over the last few months, rising as much as 75%+. And the SEC just approved several new Bitcoin ETFs a week ago. Yet if you’re looking to take advantage of Bitcoin’s run, you won’t want to miss what I have to share… a way to profit from Bitcoin without buying a single coin. Using this strategy, traders have been able to make 6x… 9x… and even 22x more than Bitcoin holders over the same time frame. That’s why I’m holding a special event on January 24 at 8 p.m. ET to explain exactly how it works – so you can get started using it as soon as the next day. So please don’t wait… [RSVP for my upcoming briefing on this strategy right here](. Despite Bumper Earnings, This Sector Could Be Due for a Pullback By Larry Benedict, editor, Trading With Larry Benedict After a tumultuous 2023, the Financial Select Sector SPDR Fund (XLF) took off in late October. XLF is an ETF that holds a swathe of bank, insurance, and financial stocks. And at that time, it was trading close to its yearly low. But XLF soon got caught up in the huge “Fed pivot” rally. It gained over 20% in a month and a half. Despite that huge turnaround, XLF has struggled to maintain that strong momentum more recently. Even last Friday’s big earnings beats from big banks couldn’t do the trick. Banks like JP Morgan (JPM) and Bank of America (BAC) failed to drive XLF higher on the day. So today I want to check out XLF’s chart and see what we can expect from here… Recommended Link [The LAST Crypto Boom in History? (How to Capture 10x, 50X, 100x Returns in 2024…)]( [image]( If you missed out on any of the previous crypto booms in the last decade, then pay attention. Because a countdown has begun… Counting down to the moment a rare crypto phenomenon triggers April 16th. And when the timer hits ZERO… [The entire crypto sector could explode – sending hundreds of tiny cryptos soaring 10x, 50, 100x, and more – in just days.]( Get ready… Because this rare crypto event has only happened three times in history, but this time, it could be 10X BIGGER than any before… Yahoo Finance says it will: [“Spark an Investor Frenzy.”]( To help you get prepared, a former Wall Street executive, Teeka Tiwari, is revealing: [The #1 Crypto for you to buy, 100% FREE – no strings attached.]( [Click Here to Get the Details.]( -- Bearish Signals XLF had worked its way higher after its March 2023 low. Yet the chart below shows that it peaked and rolled lower in July. XLF steadily fell through October, making a series of lower highs: Financial Select Sector SPDR Fund (XLF) [Image] [(Click here to expand image)]( Source: eSignal XLF’s downtrend coincided with two bearish technical signals: - The Relative Strength Index (RSI) retraced from overbought territory (upper grey dashed line). Then it tracked predominantly in its lower band (below the green line). - The 10-day Moving Average (MA, red line) crossed beneath the longer-term 50-day MA (blue line). This had both MAs tracking lower. But a reversal of this pattern caused XLF to reverse and rally hard from late October. As the chart shows, XLF had a strong surge. The 10-day MA broke back above the 50-day MA at a sharp angle. And after breaking through resistance, the RSI burst higher and tracked in the upper half of its range. Also notice the bullish action of the MACD throughout XLF’s current up move. The blue MACD line broke above the orange signal line. And both lines then rose higher. After that strong surge, though, XLF’s rally has weakened since around mid-December. Take another look: Financial Select Sector SPDR Fund (XLF) [Image] [(Click here to expand image)]( Source: eSignal Although XLF has made higher highs (upper orange line), that once-strong uptrend has started to flatten out. All the while, the RSI is making lower highs (lower orange line). So buying momentum is waning. This diverging pattern often precedes a correction. So how should things play out from here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Crossover Pattern If the RSI and XLF continue to diverge, we can expect falling momentum to eventually pull XLF lower. We’d also look for the 10-day MA move down and hit the 50-day MA as further confirmation of a down move. Beyond that, we’ll need to watch the MACD closely from here. When we last checked in on [XLF on December 20]( we saw the MACD rolling over (left and middle red arrows). It was further evidence of XLF’s down moves. With that crossover playing out once more, I’ll see if this down move accelerates and shows us a potential short trade. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Which sectors would you like to see us discuss in a future essay? Send in your ideas to feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Colin Picked Nvidia in 2018, Now He Says “Buy These AI 2.0 Stocks ASAP”]( Colin Tedards is a modern investing legend: - More people tune into his weekly investor videos than primetime CNN and MSNBC… combined. - He bought Nvidia back in 2018, at $40… before it skyrocketed 1,065%. - And he worked alongside experts from NASA, the Mayo Clinic & the Pentagon on the predecessor tool to ChatGPT… IBM’s Watson. With the “second wave” of artificial intelligence set to unfold in the weeks ahead, Colin says AI: “Will make us smarter, healthier, more productive, and mint as many as 20 million new millionaires. But you won’t make a dime from AI in 2024 — unless you [do THIS before January 30th.]( [You can view his full video presentation by clicking right here.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. 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