Below is a weekly chart of the Banking Index. Take a good look at the lines labeled 1 and 2.

What do you see?

Looking at the chart, you should see that the SPY has been trending up since April 2010, while the Banking Index (symbol: $BKX) has been trending down since April 2010.

What's wrong with that picture?

What's wrong, is that the Financials component on the S&P 500 is the second largest component which represented 13.78% of the index.

So, this chart is saying that the "other components" as a group, have been strong enough to overcome the huge weakness in the Banking sector. Negative divergences like this cannot go on forever. For the S&P to continue trending up in the future, the non-financial sectors will have to stay strong, and stay strong enough for the Financials to start reversing its down trend. So, all is not roses and there are still some big challenges ahead. (Commentary is continued below the chart.)

What are the other S&P sectors? See the matrix below ...