Keeping track of what the financials are doing can pay dividends, so to speak.*
Here’s a not-great sign for the broad stock market, which is near its worst levels of the day, with the Dow down at one point down nearly 200 points: Financials are doing even worse.*As a pup I was told to never turn my back on the banks and brokers.
For the past few trading days, financials and the broader market have moved in opposite directions. When the market was down on Friday and Monday, financials were higher. To some, that suggested the market was due for a bounce. When the bounce came, financials were lower. To some, that suggested the bounce would be short-lived....MORE
Watching them these last six months helped us get some short side protection on the day before the April 29 top:
Dec. 2, 2010
More on Goldman's Top Trades 2011: "We Like Finance Stocks for First Time Since ‘08" (GS; BKX; XLF)
Hot on the heels of this morning's "Goldman Sachs: Here Are our First ‘Top Trades’ of 2011 (GS)" MarketBeat comes right back with a follow-up. And: a more in-depth look at GS2011.February 1, 2011
But first, a note on how to read Goldy's pronouncements:
Mother: .....And remember, the Lord loves a working man.
Navin: ........Lord loves a working man.
Father: ......And son, don't never, ever trust whitey.
-The Jerk (1979)
Chartology: Financial Stocks Are at a Decision Point (BAC; C; JPM; GS; WFC; XLF)
The ETF closed at $16.40 yesterday and is showing some strength pre-market. It is very difficult to have a market rally without these guys at least being on board if not leading.April 6, 2011
The S&P and DJIA futures are indicating higher, 'Buy the Dip' will work until it doesn't.
When the music stops try to grab a chair, this is a dangerous little game we're all playing.
Wall Street, We Have a Problem, Over (Major Financials Appear to Have Double Topped) SPY; XLF
Giant Financial Stocks Still Struggling (BAC; C; GS; JPM; WFC; XLF)
I don't mean to harp on this point, I'm just a tad concerned about the implications for the overall market that the weakness in the big financials might be pointing to....Apr. 11
Raymond James Pounds the Table on Biggest Banks, Market Yawns (BAC, C, JPM; XLF)
April 14, 2011
Goldman Sachs: We’re Going ‘Neutral’ on Financials, Here’s Why… (BAC; C; GS; JPM; MS; WFC; XLF)
The S&P financial ETF (XLF) was saying this to the market ten days ago.*April 28, 2011
As one of my mentors used to say, "stocks are smarter than analysts (fund managers, brokers, bankers etc.)"...
"Short 'em All. They Aren't Worth the Paper They're Printed On"
As I'm flipping between terminals and feed-readers it strikes me that I'm not interested in any of the news stories I'm looking at.The next day the indexes hit their highs for the 2-year bull run at 12,810 and 1,363.61 respectively.
Valero reports nice crack-spreads but the stock appears to have double-topped.
China is doing a freight rail build-out that should be very positive for Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd. but the stock may have started a head-and-shoulders top.
With the lazy days of summer coming on I think of a line by "Adam Smith":
“…For, after all, I had been into cocoa a bit myself. That was back when The Great Winfield had discovered cocoa trading. Occasionally in those more leisured days I would sit with him lazily watching stocks move, like two sheriffs in a rowboat watching catfish in the Tennessee River….”And then the voice of one of my mentors says "This is an opportunity".......So I'm thinking 12,681 on the DJIA and 1355.66 on the S&P are a fine spot to get a bit of short exposure.
They are currently at 11,889 and 1266.13.
Never turn your back on the banks or brokers.
And don't never, ever, trust whitey.