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Two Ways: Mo' Banking Blues


Strengthen your portfolio in good times and bad.


Stressed Out Banks

Shares of Bank of America (BAC) and Citigroup (C) are down sharply in pre-market trading after a report said, based on early results of the government stress test, that banks may need to raise more capital. According to the Wall Street Journal, the companies could require billions, but executives at both are balking at the results and meeting with regulators to dispute the findings. Government officials have been holding general meetings with top bankers over the past few days, and said discussions would continue this week. They also added that banks directed to add more capital shouldn't be viewed as insolvent.

Shares of Bank of America were down 11% in pre-market trading, while Citi was lower by 8%. See Professor Kevin Depew's Five Things: Bank Stress Tests Reveal More About Our Obsessions Than Banks.

From the Bull Pen: Despite the weakness in the overall equity markets, bulls can look to a play Professor Adam Warner mentioned yesterday on the Buzz & Banter: Mohawk Industries (MHK). One can fade (read: buy) the weakness into $44-$42; a sell stop can be set below that level.

From the Bear Cave: Bears can consider a downside play in the iShares Dow Jones Transportation ETF (IYT). A close below $51.50, and we could see increased selling pressure.

Quick Check Around the World

Asian trading closed with the Hang Seng -1.92%, Nikkei -2.67%, India -3.25%, Shanghai -0.16% and Taiwan -1.%.

Glancing towards Europe, we see the CAC -2.28%, DAX -2.63%, FTSE -2.11%

As of 8:05 AM EST, S&P Futures are trading -13 to 843.00, and Nasdaq futures are -16 to 1357.00.

A Look at Commodities

Over in commodities, crude oil is trading -0.98 to 49.16 while gold is -9.4 at 898.80 this morning. Silver is -0.410 to 12.545 and copper -6.40 to 192.25.

The dollar index is +0.1350 to 86.0550.

On the Radar


09:00 Consumer Confidence 28.8
10:00 S&P/Case Shiller Home Price Index -18.8%

Click here to see the full trading radar.

You stay classy, San Diego! Good luck today!

In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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No positions in stocks mentioned.

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