Will This Rally Hold?

Another very low volume day. The buyers just aren't showing up. We came close to testing the 50dma, but not quite. 1330-1335 seems to be putting up resistance here. Notice the 50dma is starting to turn down again, and MACD is flipping. This rally is in danger of failing.

The Dreaded MACD flippage occured on the NDX as well, but it is still holding the 50dma.

The Russell was positive much of the day, even when the other indexes were negative, but it succumbed to the late afternoon selloff. There wasn't much remarkable about today except heavy strength in energy and heavy weakness in financials. I normally don't give a flip about mergers, but today's news about Blockbuster and Circuit City was pretty amusing. Blockbuster is trying to buy a company that is almost double it's own market cap? Those are Samurai trader-like cajones.

Train wreck of the day-Wachovia. And we have more terrific news coming from the financials this week.

The XLF shows just how weak the financials are. They are painfully close to breaking the previous low, and there really isn't any reason to believe it will hold.