Financial Stocks Show Relative Weakness

One group of stocks that have not particpated much in the recent rally are the financial stocks.  If you look at the above daily chart of XLF (Financial ETF) you will notice that it has been moving sideways for the past 2 weeks. 

In the lower panel is a ratio line which compares XLF to the S&P500.  As you can see the ratio line has just broken down to a 3 month low which is an indication as to how weak these  financial stocks really are relative to the overall market.

If the stock market does indeed turn lower, I think we may see the financial stocks (banks and brokers) lead the market lower. Lets see how things play out.