Concluding Quarter Capable:

Looking at the seasonality chart below of the XLF shows the best seasonality in the last 5 years with Q4 of each rising all 3 months by a combined 6%. If one wanted to look at the returns of the financial cousins in the IAI the total gains for the last quarter would be even more impressive higher by 7.6%. Either way, you look at it the group could be ready for a strong move into year-end in 2022. Since March the XLF has been trading between the round 30-40 numbers and like most other instruments could be building the right clavicle in a bullish inverse head and shoulders formation. The IAI looks even better and it is digesting a powerful 19 of 25 session winning streak between 7/15-8/18 that ran from the round 80 to very round par number (and 200-day SMA resistance) which began with a doji candle on 7/14. Look for leaders within that were shrugging off the overall weakness in prior months as they tend to be the winners once the sector comes back into vogue.

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