From a technical perspective, my eyes are focused on the Financial Select Sector SPDR (NYSE: XLF), which we notice is attempting to hurdle both the sharply declining 200-day moving average (11.95) and key resistance between 12.35 and 12.70. If prices manage to break above the 12.35/70 resistance zone, then we should expect upside acceleration towards 14.00/50 thereafter.

In that 40% of the XLF is compromised of JPM (12.2%), WFC (10.32%), BAC (9.64%) and GS (6.79%) and in that all of the aforementioned stocks show a similar bullish coil pattern (with the exception of GS, which has a more powerful set-up than the others), the financial sector could be on the verge of triggering a new upleg in the overall market. That said, failure of the XLF, and its major components, to successfully break out to the upside in the final session of June and during the first handful of sessions in July could have just the opposite effect. Needless to say, the XLF is at a crossroads, and so too might be the overall market (SPY).

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.