The NYSE had a lighter volume day this year; it was during the week of Presidents Day. So perhaps when I was joking earlier this week when I said I didn't realize it was the day after Thanksgiving (in regard to volume), we should have taken it more seriously.

In the meantime, the bulls will tell us the light volume was bullish on a down day and the bears will tell us light volume in general is not good. The bottom line to me is that if this were really and truly a new bull market, volume would be exploding, and it simply isn't doing that.

Considering financials were weak yesterday, I thought the breadth was actually not so bad. After all on March 17, the S&P ended the day down 11, and the net differential between advancers and decliners was -2069. Yesterday the S&P ended the day down, and the net differential was only -528. That's quite a big difference in just over a week.

What I have my eyes on is the ratio of the Bank Index to the S&P once again. It stalled out on March 20, which according to my notes was just a few days after everyone claimed the bottom was in and two days after the Fed's recent easing.

In contrast to that action, it took eight trading days from the January Fed easing before the ratio topped out. And it topped out at a higher level then as well.

What I'm watching now is those two lows on the chart (I've connected them with a short trend line). Should they be breached it would not be bullish for the market. If you look just to the left of the current pattern, you'll see I've drawn in a red trend line. Look closely and you'll note that the pattern that preceded those two lows is not so different from the pattern that we have now.

In the smaller pattern we have a big move up to a high (point A) from a low. That was followed by a pullback that gave us a double bottom sort of look (similar to what we have now). Then we had another rally (point B) to a lower high. This too is similar to what we have now.

We broke to a lower low shortly after the December Fed meeting. The stock market went down but then had a very brief pre-Christmas rally before heading into the January slide.

Therefore, I'll be keeping a close eye on this chart to see if it can hold those two previous lows. If it can't, then I'd say whatever rally we have off the current low will likely fail.

However, for now the rally window still remains open.

Overbought/Oversold Oscillators

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