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
Chart source: StockCharts.com.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.