Banks (NYSE:XLF) are still consolidating and will see some news by the Fed today.
Confirmation was also coming from the financial ETF (XLF) which was also lagging just a bit.
Since the June lows, XLF has gained 17.8%, while the Spyder Trust ( SPY) is up 13.5%.
The Financial Select Sector SPDR (XLF) gained 1.1%, with Citigroup up 0.8% and Bank of America gaining 1%.
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Other financial stocks followed their lead, and the financial sector SPDR ETF (XLF) ended the day 2.1% higher.
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The relative strength (RS) analysis has been declining (line b) since September, consistent with the weakness in XLF.
Leading the way are the Transports (NYSE:IYT), Financials (NYSE:XLF), Industrials (NYSE:XLI), Homebuilders (NYSE:XHB) and the Russell 2000 (NYSE:IBM).
The Financial Sector ETF (XLF) closed the day down 0.48%, but contained the damage well after the gap down.
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Financials (XLF) have lost some steam recently but found good support along the 21-day moving average, showing some commitment.
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On Friday, he issued a short-term buy recommendation for XLF ( NYSE: XLF), the financial services sector SPDR fund.
In this sector, we like the Financial Select Sector SPDR Fund ( XLF).
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If the XLF is already embarking on the third wave, each passing day should see it gather more strength.
Chart Analysis: The Select Spyder SPDR Financial ETF ( XLF) closed above the weekly downtrend, line a, last week.
The Financial Select Sector SPDR (XLF) is now 6% so far in 2012.
The Financial Select SPDR (XLF) was up 2.8%, with components Goldman Sachs (GS) and Citigroup both up 3.7% on Thursday.
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The RS line on XLF has been accelerating to the downside all year, indicating it would be weaker than the major averages.
The XLF is down 42% since that apex, but smaller banks in the KBW Regional Banks (KRE) ETF fared better, down 24%.
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The XLF was a major drag on the market in 2011 as it lost 18.5% while the SPY was pretty much unchanged.
Of course, US financial stocks were also hit, with the Select Sector SPDR Financial ( XLF) at its lowest level since July 2009.
The financial sector came under further pressure after the report, as the Select Sector SPDR Financial ( XLF) finished the week 9% lower.
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The relative performance still looks quite strong (compare it to XLF), as it shows a clear pattern of higher highs and higher lows.
In terms of performance, the Select Sector SPDR-Financial ( XLF) has done the best, as it is up 13.3% so far in 2012.
The Select Spyder SPDR Financial ETF ( XLF) was one of the two of the main sectors that gained over 3% last week.
So long as XLF remains above that level, it would seem to be more of a buying opportunity, at least for a swing trade.
His financial sector portfolio has gained 150% since its inception in 2003 versus a loss of 9.8% for the Financial Sector SPDR (XLF).
Berkshire Hathaway is the second largest holding of the Financial Select Sector SPDR ETF ( Amex: XLF), making up more than 8% of that ETF.
The biggest driver of the profit gains in 2010 was smaller write-offs in the Financial sector ( XLF), compared with the jaw-dropping levels of 2008-09.
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Financial Select Sector SPDR ( XLF - news - people ) fell 1% Tuesday afternoon, with Citi among the sector's worst performers.
Option traders have mysteriously shunned the XLF as of late.
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