The Financial Select Sector SPDR Fund ETF ( XLF) is closely watched because it is a key sector and at times can be a significant market leader. Right now the technical signals I am getting from the XLF suggest we have reached a high point. Let's check out the charts. 
In this daily bar chart of the XLF, below, we can see that prices found buying interest (support) in the $31-$30 area several times in the six months. Prices rallied in August and again in October-November but the XLF got stuck in the $35-$36 area for about three weeks and now we are likely to close below that zone.
The risk is that everyone who went long the XLF in the past three weeks will be at a loss or "under water" and this condition is likely to precipitate further declines. Prices are still above the popular moving averages but the slope of the 200-day line is still negative. The trading volume has diminished since the middle of October.
The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of the XLF, below, I see a weakening picture. The most recent candlestick pattern is a doji where the bulls and bears are largely in balance. A bearish candle this week should tip the scales in favor of the bears.
The weekly OBV line has been rolling over to the downside the past three to four weeks telling me that sellers of the XLF are being more aggressive. The MACD oscillator has improved but is still below the zero line.
In this daily Point and Figure chart of the XLF, below, we can see that the software is projecting an upside price target in the $37.49 area but a trade at $34.61 is likely going to weaken the picture below,
Bottom line strategy: Traders who may be long the XLF or individual names in this sector should take profits or reduce their long exposure.
