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Daily Report : A historic reversal in Financials bodes well for the sector

Jason Goepfert
2025-01-16
The S&P 500 Financials sector cycled from a 42-day low to a 21-day high in three sessions, triggering a false breakdown pattern signal. Similar reversals produced an 80% win rate for the sector over the subsequent three months, with 85% of cases achieving a new high rather than being stopped out.
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Headlines

A historic reversal in Financials bodes well for the sector: The S&P 500 Financials sector cycled from a 42-day low to a 21-day high in three sessions, triggering a false breakdown pattern signal. Similar reversals produced an 80% win rate for the sector over the subsequent three months, with 85% of cases achieving a new high rather than being stopped out.

Smart / Dumb Money Confidence

Smart Money Confidence: 46% Dumb Money Confidence: 52%

Risk Levels

Stocks Short-Term

Stocks Medium-Term

Bonds

Crude Oil

Gold

Agriculture

Research

A historic reversal in Financials bodes well for the sector

By Dean Christians

BOTTOM LINE
The S&P 500 Financials sector cycled from a 42-day low to a 21-day high in three sessions, triggering a false breakdown pattern signal. Similar reversals produced an 80% win rate for the sector over the subsequent three months, with 85% of cases achieving a new high rather than being stopped out.

FORECAST / TIMEFRAME
XLF -- Up, Medium-Term

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% Showing Pessimism: 9%
Bullish for Stocks
Rydex Bearish Flow
AAII Bull Ratio
AIM (Advisor and Investor Model)
Mutual Fund Flow (no ETFs)
CSFB Fear Barometer
% Showing Optimism: 33%
Bearish for Stocks
% Showing Excess Optimism
Rydex Money Market %
Rydex Ratio
Retail Money Market Ratio
NYSE High/Low Ratio
Short-term Optimism Index (Optix)
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Options Speculation Index
SKEW Index
ISE Equity Call/Put Ratio
Equity Put/Call Ratio
ISE Call/Put Ratio
Total Put/Call Ratio
NAAIM Exposure Index
AAII Allocation - Stocks
NYSE Available Cash
Equity / Money Market Asset Ratio
Mutual Fund Cash Level

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Sector ETF's - 10-Day Moving Average
Country ETF's - 10-Day Moving Average
Bond ETF's - 10-Day Moving Average
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Commodity ETF's - 5-Day Moving Average
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