The end-of-quarter window dressing to try and break above 1150 on the S&P 500 is causing some extremely over-stretched conditions in the FX market, which is all part of the effort to provide the most supportive backdrop to further gains for equities.
Investors were entitled to think that the economy "had turned a corner." Or, that the worst was behind them. Or, that they were "on the road to real recovery."
The stock market indices vacillated back and forth today, continued their consolidation, but held support while being repelled by resistance. Net on the day they were down a bit.
Deron Wagner compares the relative performance of the S&P 500 SPDR (SPY) to the Financial SPDR (XLF) over the past 10 days. Unless XLF gets back in sync with SPY, he believes the relative weakness in the financial arena will begin weighing on the overall market rally very soon.
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