Keystone's 2-10 Spread Indicator

The financials were on the fence to start the day, but promptly collapsed after the opening bell.  The XLF is now at 15, well below the 15.4 area that Keystone's algorithm perceives to be bullish.

Thus, the sector is back in a malaise again, this as JPM and C report later this week.

Keystone's magic 2-10 spread number is 255 which provides a line in the sand between bullish and bearish financials. This postion typically filters into the broad markets so bullish financials means bullish equities markets, and visa versa.

As of this writing, the ten year is 2.92% and the two year is 0.36, thus, 292-36=256. Banksters are holding on by one measly point so keep an eye on this spread.  Should the spread fall under 255, the financials will be in further trouble.  This tool will come in handy as JPM and C report later this week. For now, at 256, the financials still have to be given the benefit of the doubt.  If/when 255 fails, the financials will turn far more bearish and this will negatively affect equities as well.