It was a gut feeling as much as anything, but it seemed to me that financial stocks were ready for a bit of a resurgence. Watching the UltraShort Financial ETF (SKF) jump and then proceed to plunge on Tuesday was the first tipoff. Seeing that behavior begin to repeat Wednesday morning convinced me that perhaps financials were ready to make a real move up.
Since I had no idea whether this would be a sustained move or not, I elected to open just a small position in the ProShares Ultra Financial ETF (UYG) in mid-morning. It was then a pleasant surprise to see the hard-charging financials lead the market upward in the late afternoon on news that New York State's insurance regulator was encouraging banks to support bond insurers. Combined with Tuesday's surprise rate cut and another rate cut expected when the Fed meets next week, it does seem like a few factors are now falling in line to support the financials after their long decent from their peak last summer.
Having gotten in at $34.11 and watching UYG close at $36.94 today, I am enjoying seeing the ETF up over 8% already. It remains to be seen, however, whether this move can last.
Since I had no idea whether this would be a sustained move or not, I elected to open just a small position in the ProShares Ultra Financial ETF (UYG) in mid-morning. It was then a pleasant surprise to see the hard-charging financials lead the market upward in the late afternoon on news that New York State's insurance regulator was encouraging banks to support bond insurers. Combined with Tuesday's surprise rate cut and another rate cut expected when the Fed meets next week, it does seem like a few factors are now falling in line to support the financials after their long decent from their peak last summer.
Having gotten in at $34.11 and watching UYG close at $36.94 today, I am enjoying seeing the ETF up over 8% already. It remains to be seen, however, whether this move can last.
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This blog is really nice and informative. We do think our posting will be highly beneficial for you too. As we know now a days
stock market trading has just became a joke, every third person who don’t even know about the name of exchanges is willing to
do trading due to which in recent past we have seen few shares which are fundamentally very week but had flied high in rally.
But now everyone is trapped in those sort of companies.
Now best strategy is to wait and watch let Nifty close above 5350-5400 for 1-2 days only then strength will come back in market.
We are expecting short covering above these levels.
Till then our approach should be wait and watch trade in less quantity.
Regards
Sharetipsinfo Team
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