Financials outperforming the banks, but facing 200-day moving average

The banking index is up but not as much as the broader indices. It isn't even above its recent swing high (see BKX chart at right). By contrast, the financial sector (see XLF chart below) is doing much better, along with the major indices like the Dow Industrials, S&P 500 and Nasdaq.

This would seem to show that the idea of the banks leading the markets out of the lows isn't the right idea. Certainly not at this point.

The charts of the financials reflect the sharp rally in that sector, and those technical indicators don't look as bearish, at least not on the daily chart. The monthly XLF chart at bottom is still concerning. The obvious focus for XLF right now is the 200-day moving average. Since it is declining, it remains a sticking point that should be considered an important resistance level. I wish I could say whether the recent strength there is enough to get past that resistance. Given the key levels being either tested, or possibly breaking, in currences and gold, along with some key components of the financial sector potentially moving into Fibonacci resistance (as the 50% retracement back to their peak), I still think it's too soon to feel confident that they will.