Exiting XLF (Financials)

This is a troubling one folks. Financials are a major market leader and the fact that we are getting a sell signal today speaks volumes about overall market health. There hasn't been a legit sell signal in the XLF since last year. This is notable and we will need to watch risk closely in the next few days.

Its been a great run for the XLF this year and a correction seems to be reasonable here. We are seeing RS confirm its sell signal from a week ago and today price gapped below the prior low from last week and through long term trend support. I expect this to find major support near the $17 level, although I doubt it goes that far.We can also watch the short term downtrend that is developing from the top of the August peak. That should provide some hint that the correction is over if it is taken out to the upside. We will have to step aside and see what happens.