Over the last few months, the S&P 500 Financial sector ETF (XLF) traced out a head-and-shoulders top with shoulders in the high 23s/low 24s with a head above 25. Up until a couple days ago, XLF was also having a very hard time closing above a declining 50 day moving average. Unfortunately for US Bank bears, though, the neckline of the formation held and the set-up never confirmed (which would have been a close in XLF below the neckline. Over the last two days, XLF has carved out steady price action above the level of the right shoulder. That invalidates the technical formation which if confirmed would have targeted a move down to the mid-20s. Of course, just because the head-and-shoulders was never confirmed doesn’t mean XLF is headed higher in a hurry; the neckline is still worth watching as an important support level, although, from a technical perspective, the risk-reward is less biased towards the downside.