Financial Stocks Liking the Prospect of Higher Fed Rates XLF FAS
The Financial and Bank stocks are loving the prospect of higher rates from the Federal Reserve.
How do we know? We’re seeing a high volume price breakout to a new swing high in leading ETFs.
Let’s start with the broader Financial ETF Sector SPDR – symbol XLF:
From February, bank/financial share prices in the ETF surged from the $19.50 collapse-low to the present $24.50 level.
Price made a series of higher highs and higher lows, extending the uptrend in motion on the higher frame.
Last week’s announcement from Chair Yellen that the Federal Reserve is likely to raise rates sooner than expected (because the economy is performing better) may have sent the broader market immediately lower while boosting Financial stocks.
Note Friday’s huge bullish volume and today’s extension (breakout) higher in price.
If you’re feeling lucky, ambitious, risky, or reckless – or just want to make more money should this trend continue – you can view the leveraged ETF symbol FAS.
The FAS doesn’t track the broader Financial sector, but instead tracks the Russell 1,o00 Financial Services Index.
You can see that the pattern of reversal up off the February lows to the present August highs is similar.
We also note the high volume Friday and today’s bullish breakout to a new swing high beyond $30.00.
Continue following the Financial Sector as clues continue to emerge about the Fed’s future pathway of potentially higher interest rates – and the possible bullish influence this could have on financial stocks and the broader financial sector.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
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