Wednesday, January 21, 2009

Equities: Not Falling In Love ...

"Non-conditional" reflex today, reversal to "illusion-ary mean"? Well, financials have been sold heavily this year, KBW Banks down some 43% this year from the peak on the 2nd of January to low, with crash test move by 20% , yesterday. But the "base" for bounce is different (only by some 43%) today...

We watch for "Maginot Line" now, and Dow Jones Transportation (DJT) ... Decisive move above "The Maginot Line" would be technically bullish. Fundamentals appear a catastrophe still, but we may be blind due to lagging effects. Bank equity still has down-side potential fundamentally, but "coordinated equity buys by systemic CEOs" (JPM, BAC ..) may appear consciously bullish... The improvement in financial credit does NOT look good for bank equity via the lens of nationalization. We are more concerned about macro-fundamentals going lower (a much lower base for Obama' s Kiss) than priced in, but DJT should lead...

And beloved Apple beats ... but eBay disappoints?

UPDATE 1 @ 1:00 (23:00 GMT): I do not know, but I believe government bond risk is being repriced as government with Keynesian fiscal expansion + credit of banking system, this however should reduce the credit spreads for financials ... this is no way positive for bank equity, assuming this all happens based on assumption of systemic important nationalization of financials ...

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