Monday, June 20, 2016

Week In Review: Energy (XLE), Financials (XLF), S&P (QQQ), Treasuries (TLT), and the British Pound (FXB)

Unfortunately there isn't much to report this week as next promises to be one of the most volatile in a quarter century due to the impending Brexit vote Thursday night. As a result most stocks and equities have assumed condensing triangle patterns, so depending on the vote outcome trends could go either way.

Energy: XLE
I'm personally of the belief that Energy has had a good run since the beginning of the year and looked ripe for a medium-sized retracement until I noticed a small descending wedge. I think the overall trend is down but still positioned to be taken advantage of. The remainder of summer should see an increase as summer time is bullish for crude oil.
Financials: XLF
Financials ETF XLF is at an extremely interesting juncture at the moment. Support has been found at $22.40 and a second touch to the channel support line has been made, but will it bounce? Additionally if failure does occur it appears a bullish declining wedge is developing.
The sell signal that we found on the RSI(5) at the beginning of June has led us to our current place, however even with QQQ being short term oversold it looks like this still has farther to fall. The EMA's seem poised to bearishly cross downwards but the current trading range QQQ is in makes it look like a bull-flag, so confusing signals are being sent. Support should take place at about $104.00. 
Treasuries: TLT
Treasuries have had a great run after having developed a cup-and-handle-pattern but last week started to creep outside the Keltner Channel. TLT is currently oversold on the RSI(14) with several other indicators also crossing over, and given the events taking place next week I expect Treasuries to go down so as to calm the markets. Support is just below $134.00.
British Pound: FXB
Let's just get through this! The Pound is currently in a strong downward channel with final support at around $136.00 on FXB. If after Thursday a lower high goes in FXB is going to be a very strong buy. I expect for the balance of the week for there to be a lot of downward pressure.