This week I twitted some interesting charts when the financials ETF (NYSE:XLF) reached critical areas. For example, yesterday financials tested the September uptrend line to see if buyers would step in once again and push this thing higher:
As you can see, this is a very classic technical chart. We can see the rally drive nicely, then we get a nearly perfect double top. After the double top we have a lower high at a previously important level, then buyers exhaled while sellers rode the sleigh back to the September trend line.
In this chart from the end of the day yesterday, you can see a trade I made where after the XLF was unable to establish support at the trendline, I got short playing the higher probability of a failure (which ultimately occurred).
As usual, I will be keeping a close eye on financials. If you start to plan your trades based on these basic technical patterns, your probabilities of success will increase drastically.
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