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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)
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
