Federal Reserve Chair Janet Yellen said yesterday that she is ‘very uncertain’ about the path of inflation: “My colleagues and I are very uncertain that it [weak inflation] is transitory.”
Their inability to stimulate inflation numbers is obviously problematic for the Federal Reserve. While the trajectory of the “dot plot” has not been a concern for the broader stock market, the bank stocks do not like a flat yield curve.
A head and shoulders top may be forming on the daily chart of Financial Select Sector SPDR ETF (XLF) above neckline support in the $25.80 area.
A break below the neckline projects a downside target measured by taking the height of the pattern and subtracting it from the neckline. In this case, it projects back down to a rendezvous with the rising 200 day moving average, near the $24.60 area.