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Thursday, 19 July 2018

SPDR Financial Select Sector Index (Implications for Bank Stocks): 19 July 2018, Thursday, 9.45pm Singapore Time

SPDR Financial Select Sector Index (Implications for Bank Stocks): 
19 July 2018, Thursday, 9.45pm Singapore Time
(Click on Technical Chart above to Expand)


Attached is the Technicals for SPDR Financial Select Sector. It is an ETF, and it can be read as an index consisting of an indicative basket of banking and finance stocks representative of the sector.

The SPDR Financial Select Sector is a good litmus for US and Worldwide Bank Stocks (and Financial stocks). In addition, when banking sector and finance sector rally, stock markets worldwide typically rally as well, and the rallies will often spread to all other sectors.

SPDR Financial Select Sector has completed its Bullish Descending Wedge of large re-accumulation (Blue formation on chart). The Bullish Wedge here is also a Bull Pennant of a sizable scale. The wedge had yesterday achieved a critical breakout to the upside. The breakup was achieved at the 2/3 point of the triangular wedge, meaning it is a perfect breakout execution.

The 2nd green arrow is the expected trajectory and it is a pennant pole measuring x in distance, mirroring the 1st pennant pole (measured x in distance) as illustrated by the 1st green arrow.

It is worth highlighting that the US Trade War was used to shake out fools aplenty in the financial markets. These herding sheeps are very bearish and are calling for either stock market crash or a bear market. The predatory smart monies deem it right to execute bullish breakup of the wedge-pennant now -- to leave behind the herd-majority who are out. This will leave many people behind and turn short-sellers into a charred state.

The Donovan Norfolk Technical Rating:
Worldwide bank stocks are expected to shoot through the roof in 2H-2018 and 2019. More waves of super rally in equity markets can be expected in 2H-2018, 1H-2019 and 2H-2019 -- amidst the backdrop of 80% market majority having the conviction of a bear market coming.


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