Depicted on the three Daily charts below are a ratio
comparison of the Financials ETF to a Major Index in the U.S.,
European, and Chinese equity markets. They show how the ETF has advanced
compared to the Index. In all three cases, the Financials have outperformed the
Index.

The U.S. XLF:$SPX ratio chart shows that the
Financials ETF is up against formidable resistance and the RSI is nearing
overbought territory. The rising 50 sma is still holding just above the rising
200 sma. Any breakout above the last swing high would likely be met with more
resistance until the RSI reverts back to, at least, the 50 level. We may,
however, see another attempt to make a higher swing high first. Under such a
scenario, I'd look for a negative RSI divergence to signal that a pullback may
be around the corner, which could then send the RSI back to 50, or
lower.

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Further to my
last weekly market update, this week's update will look at 6-month
Daily charts and 1-Week graphs of:

• + 6 Major Indices
• + VIX
• + 9 Major Sectors
• + Germany, France and the PIIGS Indices
• + Emerging Markets ETF and the BRIC Indices
• + Canada, Japan, and World Market Indices
• + Commodity and Agriculture ETFs, Gold, Oil, Copper, and Silver
• + 7 Major Currencies

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At the time of writing this post intraday on Friday, the
AUD/CAD forex pair is down 0.0066 pips and is below parity, as
shown on the Weekly chart below. The 1.00 level is, essentially
the neckline of a Head & Shoulders pattern, and is an important level.
A weekly close below could, ultimately, send it down by a measured move
of 700 pips to 0.93.

Any further weakness may signal further
problems in China, so it's one I'll be monitoring into next week, along with
commodities, which are also down today.

Data released today shows that the total number of new Factory
Orders dropped to its lowest reading since March of 2007, as shown on the graph
below.

This manufacturing data is not supportive of a sustainable rise in the equity
markets; however, the markets seem to have their own agenda, regardless of the
fundamentals of this sector within the slowing economy. A slowing demand for the
"same old stuff" is just that…a slowing demand, regardless of how much money
becomes available for borrowing by the masses. At some point, rising markets
without supporting fundamentals, partnered with new, attractive, innovative,
useful, and beneficial products/services with "needed and must-have" value,
become a ship without a captain.

I apologize for the length of my post, but I had a lot to say…thanks for bearing with me!

Further to my last weekly market update, this week's update will look
at:

• Weekly charts and graphs of the 6 Major Indices and 9 Major Sectors
• Quarterly charts of the 4 Major Indices
• Daily charts of the 4 E-mini Futures Indices
• 2 Daily Volatility Ratio charts of the S&P 500 and Russell 2000 Indices
• Daily charts and a Weekly graph of Commodities
• Daily charts and a Weekly graph of the Major Currencies
• a Weekly chart of 30-Year Bonds

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