Paying Attention to the XLF?

I have been following the XLF intently since early July as a result of the Subprime meltdown. Underneath the market's move up, I have noticed the XLF quietly gaining a little mojo. The rate cut certainly helped. So have the mark-to-market moves by the brokers and banks with their subprime exposure. What we are seeing as well is speculation that our regional banks may also go the way of Commerce BankCorp.

I mention the XLF now because we really need the financials if the indexes are going to move significantly higher this fall and the XLF is coming upon it's 200-day moving average. Watch the XLF. The S&P is heavily weighted with financials and the XLF often leads the S&P higher (or lower). With the XLF up this morning, it is telling me that the bulls are planning to run a little tomorrow. We shall see.