______________________
For a variety of reasons, the 1270 area on the S&P 500 is proving to be the scene of an epic battleground betweens bull and bears. On a daily basis, each side mounts what appears to be a devastating counterattack, only to see the opposing force come back unscathed the next session. Not only do we have the rising 200 day moving average just below, but the market is still coming to terms with prior support in this area from earlier this year.
It is interesting that the financials are one of the leaders today. In fact, they have exhibited subtle relative strength of late, which is a something the bulls are bound to get behind should it persist. Looking at the daily chart of the XLF (ETF for the financials), it is crucial to monitor the descending triangle forming, as a break in either direction is likely to be significant in terms of broad market health as well. Note that the recent lows on the financials have held for roughly three weeks now, indicative that the fight is most certainly on. The more at stake, the tougher the battle.
Clearly, it’s on.
________________________
