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fransgeraedts (99.57)

Is this the blowout of the rally in the financials?; defining the trading range



September 08, 2008 – Comments (1)

In my earlier posts about a shift in the markets i suggested that the july lows of the financials are significant. While i am not at all certain they will hold, i am sure breaking them to the downside will take work and time. From those lows the financials have rallied impressively  -as is typical for a bear market bounce. I said in the earlier post that i expected that rally to eventually falter. That would, i said then, define the upper boundary of a trading range that would hold the financials for a  time.

Today i am wondering: could it be that the financials defined that upper limit today? Could it be that the hollow euphoria over the bailout of Fannie and Freddie is the blowout of that bear market rally? Somehow that would fit.

Frans Geraedts


1 Comments – Post Your Own

#1) On September 08, 2008 at 5:12 PM, BigDMan64 (53.22) wrote:

Good comments.  I was thinking the same thing today.  On a fairly regular basis I go through and check my closed out positions to see how they compare to when I closed them out.  I was completely out of my thumbs downs in regional/national bank shares before todays idiots rally.  I was seriously considering placing thumbs down on several of them again if we happen to open a little higher tommorrow morning.  In particular, I think that $ 19-20 is the absolute top end for WB.  Some of the regional banks like CNB still have to work through quite a bit of struggling loans/poorer quality before they see light at the end of the tunnel.  I am taking the rally today as an opportunity to short some sectors in the short term, just like I have seen some of the really bad days as an opportunity to cherry pick some longs at decent values.  Best case basis is that I think we have probably a year that will benefit traders who can capture some premium from the volatility and may still be pretty ugly for buy and hold types.

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