Financial Shakeout?
The looming downgrade of the debt of JP Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating) may have a spillover effect on other bank and financial stocks and
quite possibly the market itself. In the meantime, do not draw any conclusions
from the downgrade, other than the fact that JPM and C will be
active this morning. I suspect that is where I will be residing all morning.
Always go where the volume and emotions are highest.
From a trading perspective, fundamentals do not mean a whole lot. However,
knowing the “big picture” on certain stocks can assist you in knowing
when to turn up the heat. For the last several months I have read some very
negative reports on JPM’s derivative portfolio. Regardless of the outcome,
keeping that in the back of your mind can assist you when other news items start
to come out, like the debt downgrade last night. My initial thought was that
perhaps that was just the tip of the iceberg, so I was able to get short in the after-hours
on the heels of that news. Tony Saliba has been mentioning a potential implosion
in Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) for what I suspect are
similar reasons. We may be in the process of seeing a nice shakeout in the
financials.
IDEC Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating):Â
Biotechs looking like their pullback is complete and are
ready to continue higher. I’m not ready to call a new long here, I want to wait
to see how this JPM news effects the market. IDPH break of 46.00 is very
bullish.
Brocade
(
BRCD |
Quote |
Chart |
News |
PowerRating):
Still waiting for BRCD to break out of this consolidation
off the double bottom. Watch for a break of 16.50.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 973 | 1071 |
| 962.5 | 1062-65 |
| 952 (key) | 1050-52 |
| 941-42 | 1039 |
| 932 | 1028-33 |
| 926 | 1016-17 |
| 913-15 | 999-1000 |
As always, feel free to send me your comments and
questions. See you in TradersWire.