Slowstoch or are not even close of indicating any direction as to what direction one should take this trade.
But I guess this post is more fundamentals based positioning than a TA one and relates to the upcoming October month and perhaps even further. Here are some reason why:
1- New Stress tests requirements that could force large financials institutions to raise capital requirements by 3 to 4 percent
2- Banks like Well FArgo and Deutche bank making headline could induce stress to investors with regards to Financials and this could lead to selloffs in financials related stocks
3- Low interest rates environment which put pressure on financials
5- Banks laying off employees in order to maintain revenues and dividends. (which proves that they are having difficulties to generate revenues)
6- US election and Trump candidacy could add more to the market.
7- October is historically a volatile month.
Well one could make the point that all of the above is probably priced in the stocks already which I could agree. My opinion is that if it is the case, then I believe it acts as a lid to financials stock going higher because all of the above is very . Therefor, that could reduce our risks by being short Financials. One has to take into account that all indexes are at all time highs, this is really a massive resistance upward which again reduce risk of a new rally short-term.
S&P 500 0.51% FORWARD P/E RATIOS:* FINANCIALS: 12.2 as of today.
This idea would not be targeted for an intraday trader but more for someone wanting to hold for days.
Bought FAZ -2.45% at 31.50 $ last Friday.
Your comments are welcome