Tuesday, February 24, 2009

Can Financials be trusted?

Answer: No.  We had a nice bounce today in an oversold market.  Big whoop.  But trades can be made to net some coin.

XLF broke above resistance, but it's not convincing enough act as horizontal support.  The trendlines look ominous.

BBT is the best house in the 'hood.  Nice 14% run today up to resistance and then stopped.  I did take advantage of this from 15.15 to 16.79, but don't trust it enough further at this time.  This may run, tho.  After hours, it announced a dividend increase and is up another 3%.  Sweet.

WFC: no question this had the best bounce from extremely oversold conditions (as Eric will remind me again and again I'm sure; after all, his right brain is more developed, but Friday's VOLUME was the key in retrospect.)  The 17% run is impressive, but can the 12.45 act as support?

Longer term, however, if I had to own one bank, BBT would be it.  Six months from now, BBT does better than WFC: that I will guarantee.*

TROW is the dog of the financials.  I took some short at the close and it has not disappointed, giving up 8% so far after hours.  If the financials tank tomorrow, this one will lead the way down.

*with a CDS backed by Citigroup.


  1. LOL...

    strong dollar is rough on the hyperinflation crowd today.

    6 years from now WFC will be one of the 2 or 3 largest banks in the country.

    Not sure that is a good thing..

  2. WFC working nicely as I type, above horiz resistance of 12.45 (now support?) and following 60 minute trend.