We had a great setup this afternoon that followed the post on themes quite nicely. We saw weakness in the morning, a sharp rally, then a new low in the ES futures (top chart) that was not confirmed by the Russell 2000 Index (middle chart) or by the NYSE advancing minus declining stocks (bottom chart). It's those moves to new lows that can't attract the broad participation of the market that are most likely to reverse, generating a move to at least the midpoint of the day's range. That's been especially true of moves that cannot attract the participation of the financial stocks, which have been a particular bellwether of late. Like the Russells, the financial sector (XLF) and bank stocks ($BKX) held above their morning lows on the afternoon decline.
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