"NEW YORK (AP) -- JPMorgan Chase & Co., the nation's third largest bank, on Wednesday reported second quarter earnings of $994 million, or 28 cents a share, ahead of reduced Wall Street earnings' projections despite a sharp drop in trading revenue. Analysts surveyed by Thomson Financial had expected the bank to report earnings of 64 cents a share in the April-June period. Analysts had reduced their earnings projections after the bank last month warned that trading revenues were going to be weak. JPMorgan Chase said Wednesday that trading revenues for the second quarter were $614 million, down $622 million, or 50 percent, from a year earlier. Earlier in the week, the nation's largest financial institution, Citigroup Inc., missed its second-quarter earnings target in part because of lower trading income in a difficult bond market."

The headlines read that JPM beats lowered earnings targets, but that's all part of the con. I can read english. Twenty-eight cents actual does not beat the estimate of sixty-four cents.

"No Spin. No Agenda. Just the Facts. As they happen." So says the advertising slogan for Reuters. Seems it doesn't always apply to the headlines.

In this case Reuters got it right, but AP and TheStreet.com got it wrong, which happens too frequently to be an honest mistake, in my opinion. What gives anyway?

With the Dow 30 up +0.68 pct on the day, the Money Center Banks were down "0.85 pct. This is a red flag to all traders who know that financials are the market leaders in the U.S.

So, while the broad equity market enjoyed a very good day yesterday, let's see if it has a good week, or month? I say "Take cover! Protect yourself."

Hourly data charts for the top 10 capitalized U.S. banks shows they missed yesterday's market rally. These stocks were soft on the negative report and discussions about C and ahead of JPM reporting this morning, which was weak.

The Street knows it is in trouble here with interest rates rising, and customers seemingly more prepared to play computer poker than trade securities, leaving the later mostly up to computer-based activity.

Daily data charts for top U.S. banks shows RSI is weak for 8 of 10:

Yesterday's rally was largely about GICS Sector 15 Basic Material stocks, which I had forewarned in my Week #28 in Review. I wrote:

" XLB, unlike XLE, has a potential to rally here; however the long-term outlook for most of the components in this Basic Materials sector is negative. It is tough for certain industries, like chemicals, paper and forest products, and the industrial metals, to remain bullish if the global economy is not firing on all cylinders."

I also warned you in this same report about the financials:

" Two of the four Dow component losers this week were AXP and C. But, the Financial XLF was up +1.64 pct W/W to 30.37. The M40 is now at 29.33. I'm surprised the current XLF price can stay above the M40, particularly as interest rates are rising. You want to buy financials when interest rates are falling and avoid them when rates are rising."

It pays to listen to the right people.