Monday, March 16, 2009

The Cutting Room Floor

If I can remember, whenever I post a followup to my current column on Barron's Online I'll use this title - The Cutting Room Floor. Here is today's.

Some will wonder why I did not use the XLF financial SPDR ETF as an example of something to use to play the sector. I know my editors will. The reason is that the chart simply did not look as good as some of the others I offered.

The ETF is still rather heavily weighted in toxic banks and even though there are more than just banks there and more than just the pig head greedy CDO types of banks the pig heads are still a factor.

Well, now you know.

3 comments:

VC said...

Michael,

Nooooo!!!! Tell me you haven't been lured into this bear market rally! $DJUSBK is inching closer to it's 50 day EMA, a place it hasn't crossed in the last five months. BAC, WFC, PNC, JPM have all had a tough time reaching and staying above that mark.

Seems that both the S&P and several of these financial companies are bouncing off short-term resistance points. If S&P can't rally past 780, I don't see how the banks don't lead the way back down.

Do you follow any overbought/oversold indicators? If not, any reason why? I haven't seen you reference them in your Barron's column.

Also regarding the comment about your job getting tougher, one thing that absolutely won't change: greed. Fortunes will be made when we finally hit bottom by those wise/lucky enough to call it. And people will continue to look up to you and your peers for clues as to when we're out of the proverbial woods.

Thanks and good luck!

VC

Quick Takes Pro said...

VC,

Yes!!! But just by calling it a bear market rally we are expecting it to be short-lived. I think the only people lured in are the ones who think it is safe to lock stocks away for the long-term again.

As for the indicators, I had an RSI in Monday's column so yes, I use them and yes, I put them in the column. But you have to agree that for the average non-technical reader they can cause more confusion than clarity at times.

paulocuana said...

VC,

I noticed you use 780 as the breakout level.
I've heard other levels such as 768.6.
How is 780 derived?

Thanks for the education in advance.

Paul