XLF “is failing at the top of a four month price range. A drop is now expected down towards the bottom of the range, around $19.50, as marked out by the August and October lows,” said Coe. “The fund has underperformed the S&P 500 since July and that is continuing today. In a healthy bull market this area would be providing leadership and the fact that it has lagged is another reason not to trust the recent break to record highs by the general market.”
Coe also is not too enthusiastic regarding Goldman Sachs (NYSE: GS), having recommended a short trade in the new Dow component today. Goldman is XLF’s ninth-largest holding with a weight of 2.6%.
Other top holdings in the ETF include Berkshire Hathaway (NYSE:BRK-B), Wells Fargo (NYSE: WFC), J.P. Morgan Chase (NYSE: JPM) and Citigroup (NYSE: C).
Financial Select Sector SPDR