Aside from being a round number, it is also a milestone retracement level of the 2007-2009 bear market. The $19.80 mark for XLF is a 50% retracement of that whole slide, the analyst said.
The top five holdings in the financial sector ETF are Berkshire Hathaway (NYSE: BRK-B), Wells Fargo (NYSE: WFC), JP Morgan (NYSE: JPM), Citigroup (NYSE: C) and Bank of America (NYSE: BAC).
“On a relative basis, versus the S&500, despite staging a rally since the end of 2011, it is still short of its high from 2009. That creates a bearish relative divergence given that the price has already broken way above its 2009 high. So over the long-term, financials are not performing as well as many would make out,” Coe wrote in a newsletter. “The XLF has underperformed since the end of May and we expect that to continue given the vulnerable charts belonging to the fund’s components.”
