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Financials have underperformed the broad market for almost 2 years! If history is any guide, for the broad market to move higher the financials need to be along for the ride. Of late short-term falling resistance lines have been broken in the financial arena, with is a positive for this sector. Longer-term lines do remain a few percent above current prices.
In the past PFF has been a decent indicator to whether financials are really on board and ready to move higher. Keep a near term focus on PFF’s price action up against a key falling resistance lines.
