One very disconcerting sign today amidst all the euphoria is the lack of performance in the financials-- after the FASB caved into pressures to modify mark-to-market, and with the price structure of the Financial Select Sector SPDR (XLF) pushing up against an important resistance/breakout plateau (9.60/80). Right now, the XLF appears to have failed miserably to "lead" the advance in the larger S&P to the upside. But what is it doing on the downside? For now, purely from a technical perspective, the XLF is traversing from the top to the bottom of its March-April. sideways congestion area, with the initial near term support level at 9.10/00. If 9.00 is breached, let's expect a press to 8.60 thereafter. An upside breakout above 9.70 is needed to trigger a powerful buy signal that points to 11.00.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.