Today’s outlier earnings reactions aside ($COF anyone?), I’d say that the failure over the last two days to push higher in the indices is another confirmation of the news tide shifting and the March rally’s petering out. Today looked like pitched battle in the charts, and also over on Stocktwits, where I kept the open stream up for much of the day (a habit I’ve been quitting as signal drops and noise rises), trying to measure a little trader sentiment. The number of times I saw back-to-back tweets of absolute conviction that it was time to buy the financials or time to sell them was a whipsaw of its own.

Earnings news is all over the map, of course, and the market’s volatile intraday moves are confirming this: analyst expectations plus beats and misses plus guidance plus one-time items and two-timing accounting plus recent price and volume action is a lot of vectors, and as the big players report and players large and small react, we get a choppy trader’s market, and the bulls and the bears get louder without being any more correct. Today’s 3:30 selloff was as hot and heavy as yesterday’s buy into the close.

Chris Nelder has a nice post up today in honor of earth day. He’s encouraged by all the new renewable energy projects underway here in the U.S. (as am I), but his focus then turns to the rally and the lockstep chart patterns of different sectors.  His reminder that financials are the real drivers of market action is timely too, and the real tell that this fat rally is not the rally. The financial sector is leading America and the world out of economic torpor? Uh, no. But day after day, it leads the market up, down, and all around.

Infrastructure and real estate would be important tells in a new bull market, of course, but the leading indicator of real building strength would be–or rather, will be, at some unspecified future date–technology. Innovation in tech is, hands down, America’s greatest manufacturing capacity these days. While tech stocks have of course been strong the last few weeks too (what hasn’t?), on any given day they continue to spank or tank with the banks, as if the two industries shared the same valuation. Total nonsense.

Were this a real bull market start, tech would stay strong in a selloff like we saw late this afternoon, and not just relatively strong. STRONG, like the industry actually is, even in recession. Sure, businesses and consumers are cutting back, but IT is buried deep in every business infrastructure and many lives now, with the internetz cranking away and kiddies young and old hitting the video-game crackpipe and smartphone telecom morphing from the new cool to the next must-have. That is demonstrable, logical strength–trend–that should shrug off confused price discovery if salad days were ahead.

The current profitability of Google or Apple or Research in Motion, considering the breadth of this recession, is very impressive (never mind Wall Street’s senseless expectations of endless growth and eternal youth), but these stocks have rallied off 2009 lows a lot less in percentage terms than, say, Citigroup, and remain well off their 52-week highs. If the bull market were back, the opposite would be true: tech would be so strong that crummy broken financial companies barely necessary to their doing business (no debt, huge cash) were dragged along for the ride.

Put simply, financials are the wrong leading index, but they’re our leading index at the moment. While they have surged off severely distressed lows and pushed the markets up, the state of finance here and abroad continues to make sustainable market growth impossible. The bulls may not want to see this (that’s a Hussman link, a must-read), but a few months’ earnings as tweaked by a press release notwithstanding, we remain one or two nasty news stories away from this fraudulent, grabby, and broken sector’s dragging our undervalued technological prowess–and the rest of the market–down all over again.