Where are the banks?
Research for Online Investors

by John Dalt

12/24/09

All of our trades are set; our stop-loss monitors are entered.  Our daughters are home for the holidays.  The markets are volatile this morning with no volume to speak of.

Oil and precious metals are staging a rally, with natural gas dipping.  Apple is hitting an all time high, leading the tech sector up.  The strange thing about this rally is the banks.  I always check Goldman Sachs for a peak at buyer sentiment.

The last leg up on the indexes has been absent bank participation.  Alarms ring, we always expect the banks to lead us higher.  Bank stocks have been the bell-weather on hopes for recovery of the economy.  The last month has seen secondary offerings from BAC, WFC, and Citi.  Maybe the shareholder dilution has dampened enthusiasm for their stocks.

If you are looking for a short-term trade for next week, this could be a lucrative area.  If the banks won’t lead the market, they will surely follow.  Tech looks good, check out ETFs rather than trade specific names.

Looking to next week, we expect the market to continue the Santa Claus rally we have enjoyed so far this week.  The S&P looks cleared to 1150, and maybe higher.  This should leave you with an optimistic view going into the long weekend.  We can do no better.

One comment on current political events.  The republicans caved and let the health care vote occur at 7 a.m. They could have kept the Senate in session until 7 p.m. tonight when the earliest vote could take place under Senate rules.  After the health care vote, they went along with a vote to increase the debt ceiling.  It took about as long as to take a breath.

When you are fighting for survival, it is important to use all the tools available to you.  The minority party could have signaled Harry Reid early in the week that they would filibuster raising the debt ceiling, if it was not taken up before the health care debate.  This would have made it impossible to pass the health care bill before Christmas.

I find it hollow to protest the democrat's success in pushing this bill through, if you don't use every opportunity to stop it.  All is not always as it seems.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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