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 (NYSE: 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 Mar.-Apr. 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. MJP 4/02/09 1:20 PM ET (9.28)
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