Over the past four sessions the S&P Select Financial SPDR ETF (XLF) has attempted unsuccessfully to reclaim its 200-day MA and break rally above its long term downtrend line that began in February 2011. Yesterday, XLF formed a reversal candle and closed below both of these key resistance marks. Further, over the past two sessions, XLF has for the first time in several weeks, begun to exhibit relative weakness to the broad market. A move below yesterdays low of $13.66 could provide a shorting opportunity in this ETF. Although we are not placing SKF on the watchlist (nor are we inclined to go short), XLF could provide a quick trading opportunity. Tthe ProShares UltraShort Financial ETF (SKF) is a potential inverse proxy for XLF.

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