From a glass is half full standpoint, Barclays, ABN Amro Hold Talks on Possible Takeover, Person ... sending a whiff of Merger Monday into the air.
The cautionary note is that IF the market can mount a move higher, it could very well be tempered and even shortened by the coming Fed meeting and fears over this week's housing data (see earlier posts).
The Journal highlights the need for the financial sector to get its groove back. This is indeed a truism. 1st chart is the 1 year Financial Select Spider (XLF). Notice how it is not only testing the 200 day moving average but that as it has moved lower to challenge the 200 day volume has also picked up!
Perhaps even more critical is that long term support is being challenged. Here's a 5 years chart of the XLF showing the stock in the midst of testing, really breaking monthly support. Monthly RSI is also at its lowest in more than a year. This is indeed a critical juncture for the market, support needs to hold for the Financials, or the breaking of Dow 12,000 will soon follow suit.