The chart of the largest financial exchange traded fund is painting a bearish picture while top holding Bank of America (NYSE: BAC) falls to a new 52-week low in Monday’s sell-off.
Financial Select Sector SPDR Fund (NYSEArca: XLF) was down 2.4% in afternoon trading as fresh European credit fears weighed on stocks. Bank of America shares slipped more than 3% to their lowest level seen in a year.
Technically, the financial ETF last month experienced a so-called death cross as the 50-day moving average crossed below the 200-day.
“These signals are not reliable in sideways ranges but in downtrends they are have better success,” said Tarquin Coe at Investors Intelligence in a recent note. [Bank of America Caught in Downtrend; Financial ETF Sees ‘Death Cross’]
Additionally, the financial-sector ETF has been turned back twice recently at its 200-day moving average.
ETFs that invest in banks and technology stocks were among Monday’s worst sector performers. The tech-heavy PowerShares QQQ (NasdaqGM: QQQ), which tracks the Nasdaq-100, declined nearly 2%. Key components Microsoft (NasdaqGS: MSFT), Cisco (NasdaqGS: CSCO) and Apple (NasdaqGS: AAPL) all lost more than 1%.
Financial Select Sector SPDR Fund
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