Get Ready, Get Set, Go Bank Stocks, Go....Let The Bank Quarterly Earning Announcements Begin
After analyzing the performance of the financial markets for the 1st half of the year, I noted the banks stocks were under performing the overall Markets. I was immediately intrigued because I thought raising interest rates were good for the bank stocks.
In a nutshell, I think the Banks have topped out and I want to take advantage of it by shorting, not just one banks stock, but the whole sector.
According to Investopedia.com, Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio constructed of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.
The way I'm going to play this trade is by buying leap put options on the Financial ETF, XLF because the major holdings are the following:
Monthly Chart – I have two initial targets: target 1 - $23.50; target 2 - $19.50.
But I'm going to wait until price takes out the weekly demand zone at $26 first.
The following Banks announce earnings FRIDAY morning:
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Published on
by rollandthomas
Things should get interesting with earnings season. SPX is at the top of this year's range excluding the January high, banks and other earnings are either gonna send us back down to the bottom of that range or bust us to run at the Jan. highs.
I think with interest rates not rising as aggressive as expected the banks may come short, but who knows right? lol
It's tech that taking the Markets higher, but the sector is overcrowded. If tech sells offs, the Markets will correct. I'm personally looking to get short the Markets, just waiting for a nice entry point. The yield curve is warning us that bad times are near. I won't be surprise if we see new highs...which usually occurs...the exhausted move higher before the Markets turn down for good.
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