Chart of the Day - Tuesday, January 14, 2025

January 14, 2025

Chart of the Day

I like the looks of $XLF financials here.

1.) RSI NOT Oversold & Bullish Divergence
2.) Nice Whipsaw & Clean Risk/Reward
3.) Relative Strength Curling Up
4.) Supportive LT Breadth

NOTE - Earnings start tomorrow with $JPM $GS $BLK $WFC $C $BK pic.twitter.com/E1sH469QNT
— Larry Thompson, CMT CPA (@HostileCharts) January 14, 2025

🏆 Today's Chart of the Day was shared by Larry Thompson (@HostileCharts).

Earnings season kicks off tomorrow, with several major banks reporting on Wednesday morning, including $JPM, $GS, $BLK, $WFC, and $C.
The Financial Sector ETF ($XLF) has stabilized after correcting -7.8% over the past month. Today was its first back-to-back gain of the new year, rising +2% in this week's choppy tape.
Larry points out that $XLF is primed for a meaningful rebound. It formed a Failed Breakdown by reclaiming its December low yesterday. RSI has created a Bullish Momentum Divergence, and 80% of its members are above their long-term moving averages.

The Takeaway: On the eve of big bank earnings, the Financial Sector ($XLF) has set the stage for a potential rebound.