Our chart of the week is an update on the all-important iShares Financial ETF (IYF).The IYF has become a weekly fixture for one major reason: This ETF represents the backbone of America's financial system. With large holdings in Bank of America, Citigroup, Goldman Sachs, and JPMorgan, this fund rises and falls according to America's ability to pay debts, conduct business, and generally "get along.
"We're sticklers for the market adage "don't fight the trend." Right now, the trend in American finance is down. The IYF has blown past our $34 "line in the sand." Shares hit a new all-time low of $24 yesterday.We're sure the market will stage at least a short-term rally soon, but until financial stocks can get their act together, caution, caution, caution is the order of the day.– Brian Hunt