E Thomas St.

Close to the End of the Selling Cycle

This stood out to me today as well. Wednesday (and Friday to a very weak extent) of last week was one of those days where the financial sector got beat down despite it being an up day for the rest of the market, and today the opposite occurred where the rest of the market took a hit but financials held about even or slightly up.

I don't think this is indicative of a turn around but it is interesting to note.


On Mar 09 12:56 PM The Mad Hedge Fund Trader wrote:

> The short squeeze is coming. Looks like there is a massive short
> covering play setting up in the financial sector. There was big hedge
> fund buying of calls and call spreads in the Financials Select Sector
> SPDR ETF (seekingalpha.com/symbo...) at the end of last
> week. The healthy components of this basket, like JP Morgan (seekingalpha.com/symbo...)
> (12%), Goldman Sachs (seekingalpha.com/symbo...) (7%), and
> Wells Fargo (seekingalpha.com/symbo...) (6%), are at record
> low valuations. The sick one like Citigroup (seekingalpha.com/symbo...)
> and Bank of America (seekingalpha.com/symbo...) are essentially
> at zero. This makes your downside risk very low. Watch this space.