Financials are back to the scene of the crime as we kick off the Q3 earnings season. This was the place of the 2007 highs, the 2018 highs, the 2020 highs, and this summer's lows. Hard to think of many more important charts than this one pic.twitter.com/eNtvdOvqIp
— Austin Harrison, CFA, CMT (@meanstoatrend) October 12, 2022
Today’s Chart of the Day was shared by Austin Harrison (@meanstoatrend). It’s a chart of the Financial Sector ETF, $XLF, over the past three years. Austin points out that Financials are testing a crucial level around $30. This level has been a key turning point for $XLF over the years. It acted as resistance twice in 2007, then again in 2018, then again in 2020. We finally broke above it in early 2021 and have traded above it ever since. If it fails to hold $30 here, then 2021 is going to look like one giant failed breakout for Financials. This is by no means the largest sector, but it’s certainly an important piece of the puzzle. Will the bulls defend this crucial level?… Stay tuned!