an t Sionna 4.28.09: Bank Stocks

You are starting to see analysts become more positive on banks and financial institutions. While few of these fellows are willing to come right out and say buy these names, they are at least going from sell ratings to "market neutral" on many of them. I thought I would highlight three banking ETF's to see where they currently stand. I am judging them by the criteria I set out in our Crocus series from a few weeks back. For a overview of this (particularly in regards to my treatment of the moving averages and their crosses) read here: http://www.blogger.com/post-edit.g?blogID=9933558&postID=8243496324994711597 .

In a nut shell note on the charts above where these averages are in relation to their golden crosses (purple arrow). Like almost everything else, financials are currently overbought and they are all trading at the near the top of a trading range.

Irrespective of that, this is I think the most beaten down of all the major market sectors and it needs to be investigated and incorporated more fully in the Game Plan should these names take a breather. Remember stocks and indices can correct by time (i.e. spending a period going nowhere) or by price (declining). When that correction comes, and assuming there is no more bad news that the market's isn't already discounting these should make attractive investments.

Not advice for non-clients. You need to either do your own homework or talk with you own investment professional.

*Long UYG, XLF and KBE in certain client accounts.

**Please note that UYG is an Ultra fund that intraday is designed to move up to 2 times its underlying index either up or down. These funds therefore have different risk parameters than traditional ETFs. As such a prospectus for these funds should be read and these may not be suitable for all accounts. Here is a link to the ProShares Website where such a prospectus may be downloaded. http://www.proshares.com/ Also note that we are providing a link as a courtesy and our doing so should not be construed either positive or negative regarding the investment merits of these funds.