aarc

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

There will always be half-full and half-empty fundamental analysis. There will always be buyers and sellers with contrasting analysis of the markets.

But the banking sector was able to have an 85.33% haircut going from $121 down to $17.75. What do you call it? It cannot be called half-full nor half-empty. It is more like a dry towel already. And this author is trying to short the financials again?

I bought the financials as it goes from 80% to 85.33% discount as it approaches my maximum target of $16.85. It is not so often that the glass becomes almost empty rather than just half-empty. Well, $BKX was not able to reach it's maximum lowest target but rather made a turnaround at $17.75. Now, it is still have a lot more room to run to the upside even at $42 or so price levels.

Do you know that $BKX was able to form a 1-2-3-4-5 pattern on the weekly and daily charts to the downside during the last sell-off iteration? It is a high probability bottoming process used by bottom fishers for precision entry.

Do you know that the $BKX has successfully broken out of a potential inverted Head and Shoulders pattern on the daily chart. Another high probability bottoming process used by those who try to chase the rally.

InvHnS has a probability rate of 65%. 65% probability rate is very high - you don't want to go against such an odd with your shorts more likely to be squeezed hard you might not be able to know what hits you.

Why not short AIG again at the current price of almost $2.00? It might go back down to 33 cents again and you will gain more than 80% profit on your trade. The trend is your friend, right?

Meanwhile, those contrarian traders who bought AIG at 33 cents are now up almost 500% on their trades.

Who is the greater fool getting hustled down here at these extremely depressed prices? The trend traders or the contrarian traders?