Well, at least it moves.
Not a very good game, not at all.
1. The sprites were crappily cut out, and very, very small.
2. Make an AI for one player, please. I really don't want to share my keyboard with a friend to play a fighting game.
3. Better attacks, I tried to use chakra, but it seemed to be worthless.
4. Finally, I'd work on not only the back ground, but also the button graphics. Gradient buttons were cool in middle school. Now, they're kind of tacky and dumb.
This was a good start, but you should probably have one of your friends test it out before you decide to release it on the web.