The Reformed Broker, AKA Jackie Treehorn, here with today’s Market Recap…
Plenty of traders put on bank stock shorts on the heels of last week’s positive pre-announcement from Wells Fargo (WFC). They didn’t like how the numbers were put together or thought the move was too much or both.
Their money was confiscated today as quickly as the cuttlefish in the above video snatched up that octopus. One minute, you’re trying to fade GS, MS, BAC and C (or play with a wrench), the next thing you know, you’re lunch meat.
The KBW Bank Index (BKX) closed up a monstrous 7.6% on the day with double-digit gains for some of the big components (Citi up 25%!).
This market has been unforgiving for the shorties over the last few weeks.
The market wants to own these banks, warts and all, apparently. That may change tomorrow, but with earnings on tap this week from several financial heavy hitters, including JPMorgan, Goldman Sachs and Citigroup, there’s no telling what the spin will be on the numbers reported.
If the market chooses to continue to ignore the losses and “look through the valley” as it did last week…look out above.
Full Disclosure: I currently manage accounts that are long WFC and JPM. My commentary above is strictly a recap of today’s trading activity, not an endorsement or recommendation of any investments. See my terms & conditions page for the full disclaimer.