This week's surge in financials in general and the TARP banks in particular ran the Financial Select Sector ETF (XLF) from last Friday's close at 130.01 to Thursday's high at 14.35, or 10.3%. However, as powerful as the upmove might have been, and still is, it may not be more powerful than the two-year down trendline that cuts across the price axis currently in the vicinity of 14.30.

This is a classic case of a strong near-term upmove smacking into a stronger intermediate-term downtrend. In the vast majority of similar situations, the near-term upmove fails on its first attempt to hurdle and sustain above the more dominant medium-term downtrend.

My near-term work is telling me that the current situation in the XLF will not be the exception: the price structure may make another attempt or two to hurdle and sustain above 14.35, but will fail ultimately and reverse into a correction that presses towards a retest of the breakout plateau at 13.20-13.00.