Jase

Banks: The Final Countdown?

What's the consensus for the financials during this 4-day inauguration trading week? TA points to a retest or break of November lows, but the market rarely does what we anticipate--anyone care to provide a case for a large bullish move/recovery for the financials this week? If so, upside targets for XLF, UYG, FAS? If not, what support levels must hold for each of these?

No, the Financial Crisis Is Not Over

non1: sorry mate, SKF will break $300 by the end of the year. USO is undergoing a time-correction, you'll see it rally by week's end and continue next week. Sure it'll hover around the $100/barrel mark, but a barrel of oil will break $150 before it breaks $80. Ultimately, however, I do believe that by the end of 2009 we could be back down below $75/barrel.

The Citi Plunge Continues

Felix, you're a little pessimistic for my taste. You haven't disclosed your position, I shall assume that you're short Citi and you're simply fear-mongering. Look, while Tanona's got a decent track record, he is but one man; his word certainly isn't gospel. That his comment contributed to Citi's sell off today is comical.

I remind you that Citi's 100 billion market capitalization is still a whopping 30 billion more than Goldman Sachs. In any case, that still says absolutely nothing about their earnings potential. (I can hear you whimper, "What earnings potential?"). For the most part, Citi isn't run by complete idiots. They've weathered worse storms than this; as far as I'm concerned there isn't a company on the planet more capable of a stunning, well-planned, convincing, turn-around. Patience. Even just a year and you'll see stark bottom line improvements. If I'm wrong, I'll eat humble pie.

Why not make this interesting:

Goldman Sachs closed today at 176.26; Citi closed at 17.67. I'll bet you that in one year from today (at market close on June 26, 2009), Citi will, on a percentage basis, outperform Goldman Sachs.

Loser buys Sushi dinner at Hapa Izakaya in Vancouver.

'The Worst Is Over for Financials' - Really?

This is laughable. Look, the financial sector has already recovered. That said, it has sprung back a little quick, so I'm of the opinion that the markets will be heading lower again starting this week--we'll go back and test those March lows, but we certainly won't break them. I remind you that this is healthy, and normal, and expected. Let me go out on a limb and provide what I believe to be rare these days: a actual quantitative prediction. Take a look at UYG, it's a fairly decent snapshot of the overall health of the financial sector right now. It will trend lower to about $27, but that's it. That's the bottom. That's the lowest price you'll see for the rest of 2008. Buy the financial sector up hand over fist once we're there. Like prostate health, if your financials are healthy, everything else follows.