Financials In Play:
It is often said that the financials must be an active participant in any overall, healthy market rally. Interestingly enough looking back at the XLF on a yearly basis to 2007, the sector only finished in the top 2 of the 11 major S&P groups once. That occurred in 2012 with the ETF up nearly 30%. This year that habit is following suit as it sits in 7th place almost halfway through. It is concerning that they have not behaved well in the face of rising interest rates. On 6/6 the 10-year broke above a double bottom pivot just above 3 and has not looked back. On the MONTHLY chart of the XLF below we see that when 2 poor months come in quick succession the group seems to find a footing not long after. Amove back into the round 30 number, still about 5% from current PRICES, could be an opportunity as it would also be an initial test of a rising 50-day SMA after a cup base breakout.