The Financial Sector SPDR (XLF) — This Exchange-Traded Fund (ETF) represents investments that include companies from the following industries: banks, diversified financial, insurance, and real estate.
While today’s buyers of the financial stocks are focusing on the results of the bank stress test, the XLF is approaching a major resistance zone at $13-$14 where it meets both of the 200-day moving averages (simple and exponential) and a key Fibonacci number. That number is 23.6% and is a percentage retracement of the entire bear market in financial stocks.
These are usually significant obstacles to a further advance, so with barriers like this ahead buyers of financials stocks would be wise to wait and let the market tell them if it is capable of surmounting such barriers.
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