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Financials Still Have a Fever

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Bank stocks have given back all of the upside moves from the previous rate cut and don't seem to be finding any buyers at all.

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Good morning Minyans,

I hope you have a good book for the day as I don't anticipate the market doing much of anything ahead of tomorrow's FOMC meeting. Yesterday's underlying optimistic tone leads me to believe that most participants are expecting good things from Big Ben and the boys as they positioned themselves long ahead of the report.

While I am encouraged by some of the charts I am seeing underneath the surface I am not seeing nearly as many as I was around the last FOMC meeting which has me a bit more on the cautious side. I have struck a balance, repositioning from extended stocks to those that have yet to really move all the while being a net seller and raising a pretty substantial cash position.

As we continue to roll through earnings, there are many stocks I am watching such as Art's-Way (ARTW) that I discussed yesterday and which I desire to take a position in, however will wait patiently until the stock breaks above my first buy point of $24.00.

The banks such as Citigroup (C), Bank of America (BAC), and other financials such as JP Morgan (JPM) and Merrill Lynch (MER) continue to look ill and are trading very poorly. Those stocks have given back all of the upside moves from the previous rate cut and don't seem to be finding any buyers at all. I will be watching this area closely over the coming days to see how participants like the feds moves.

Despite my immediate cautious undertones, I am very optimistic for the remaining two months of the year. We are entering a time where seasonality is on our side and the performance anxiety is running quite high. Despite the arguments surrounding the economy or other concerns, I will let the charts be my guide going forward and should they set up, I will step in and play them accordingly.
No positions in stocks mentioned.

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