Fianancials shares rallied, yet fundamentals remain weak?

[codedeep007]

I see a lot of hope down the line,

1) Congress will pass the bill so that US tax payer will pay part of the house mess.
2) Forecloser will peak in August,
3) Rules has changed, you can't short the key financial shares.
4) Sector rotation, money flowing out of Tech, Material and Energy will find the strongest sector.
5) US will not allow LEH, FNM, FRE to fail.
6) Oil price has dropped, food price has stablized.
7) Within a month, US flag flies high in China, good relief.

 

[krazykarl]

Quote from MrDODGE:

This is just an oversold bear market rally and NOTHING more.

I would disagree. Individual stocks in bear-market rallies don't move up 50% in 2 sessions.

It's blatant that there was manipulation going on. I doubt if anything serious will come of it though.

 

[RiceRocket]

In my perspective, we had a hell of a selloff in the last month. Most of this is priced in, and now you're seeing shorts take profits. The easy money on the downside for financials is over for a bit. From here on in, it's probably going to be a very choppy downward grind. But lots of head fakes to the upside to wipe out the puts.

 

[S2007S]

Today on bulls and bears gary b smith predicted a 30% jump in xlf. I thought what a lame prediction after the fact financials stocks rallied extremely hard this past week. XLF is up 25% from it's low set just last week. I bet if financials were off another 5% this week no one would me talking up these financials. Sell this rally in financials this week. XLF will be back below 18 again. The reason for the extreme run also was due to the sell off in oil. Once oil starts it's run financials will fall. Bought SKF and DXO on Friday.

 

[Cutten]

Quote from krazykarl:

Individual stocks in bear-market rallies don't move up 50% in 2 sessions.

Yes they do.

I do think financials may have made the bottom (not 100% sure, but it looks a bit like it), but your statement is just wrong. Check out any prior bear market and you will see those kinds of 2 day rallies off the lows in the most beaten down stocks.

 

[daddyeaux]

somewhere out in the Cosmos are trillions worth of CDO, CDS, SIVs which have no bid. this stuff just didn't disappear

earnings reports wont tell the story until we can get the 10Qs and read the footnotes...and count on the mainstream media not reporting any of it.

 

[Landis82]

Quote from S2007S:

Today on bulls and bears gary b smith predicted a 30% jump in xlf. I thought what a lame prediction after the fact financials stocks rallied extremely hard this past week. XLF is up 25% from it's low set just last week. I bet if financials were off another 5% this week no one would me talking up these financials. Sell this rally in financials this week. XLF will be back below 18 again. The reason for the extreme run also was due to the sell off in oil. Once oil starts it's run financials will fall. Bought SKF and DXO on Friday.

Still long the UYG?

 

[krazykarl]

Quote from Cutten:

Yes they do.

I do think financials may have made the bottom (not 100% sure, but it looks a bit like it), but your statement is just wrong. Check out any prior bear market and you will see those kinds of 2 day rallies off the lows in the most beaten down stocks.

I have looked and am struggling to find a 50% retracement on a 2-day move during a bear market. Please post example with 3rd-party chart.



Regards,

 

[turkeyneck]

Is there an old saying in trading that the most obvious side of the trade, i.e. short in this case is usually wrong?

 

[TYtrader]

XLF up 39 percent in a week. I wouldn't get in front of that, but I don't think the problems are over. Far from it.