Financials Gaining Steam

UPDATEPrior to last week’s trading, we stated, “A near term daily settlement above 127’00 should be enough of an impetus to cover short positions – but only on a close above 127’00”. Turns out, the settlement the very next trading day, last Monday, was 127’015. Therefore, based on our advice you would have covered shorts. As of last Thursdays dip, it certainly indicated you would have been whipsawed, based on our upside pivot. At this time, the market may continue to consolidate within the triangle (two red lines). However, a close below 126’10, sell outright.

But the large trade is margin expansion for deposit institutions, we have been bullish based on our proprietary indicator in MS and BAC for the last year.  As you can see from the heat map our ratings are strongest with the Insurance companies and investment firms.      

sectors

ICE – intercontinental Exchange saw an upgrade to a Strong Buy on Oct 2nd from a Buy.  Note the stock has been a buy since April 19th.

ice

Below we have the 5 Strongest and weakest financials within the S&P 500.

5

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