Scott Redler of T3Live.com
This morning I brought up the possibility that the banks had been lagging in response to the “rumor” of turmoil in credit markets. Often we see a “sell the rumor, buy the news” phenomenon develop. With the bad news out of the way, the cloud hanging over the financials might have been lifted. With that idea in mind, we took a textbook gap fill trade in Goldman Sachs that worked out rather smoothly.
Following Goldman’s lead, the XLF completely filled the large gap from Friday; however, some near-term resistance remains–banks must contend with a downward sloping resistance line and the 50-day moving average at approximately $14.80 in the XLF.
