$$ Weekly Financials Report

Jan 25-29, 2010
For the annotated chart of $XLF, please go here.

XLF

Price closed down 76 cents for the week at $14.18, slightly below the neutral zone and right above the main trend line on price (~$14.15).

Momentum: RSI closed the week at 38, the floor for up trends. RSI is now as oversold as it has been in 9 months. Watch to see how RSI interacts with 38. A close below 38 signals the up trend is in danger. On the other hand, a positive reversal could develop between the current low and the mid-December low if price/momentum reverses here.

Volume: Heavy short term distribution last week.

Volatility: Average. No squeeze play on.

Last Week's Outlook: Generally bullish. Should price break to new highs, expect resistance at ~$16.50. Price double bottomed at that level in 2002, and $16.50 served as bottom-top resistance in the 2008 downtrend.

Next Week's Outlook: Technically, we are at a crossroads. Watch RSI and price to determine whether this is a test that does not kill the up trend but makes it stronger, or whether the up trend is done for now.