Two Ways To Play: Time To Bet On Banks?
Strengthen your portfolio in good times and bad.
The Bank Job
Ken Heebner has made millions betting against financial stocks, but he's been a buyer ever since the summer. According to the Wall Street Journal, Heebner, who manages his CGM Focus Fund, thinks banks and insurers will recover because of the Treasury Department and Federal Reserve. "A year from now, credit will be available because of the government's actions," he said.
Of course, the best hasn't paid off yet. He's trailing the S&P 500 for only the second time in his 11-year tenure and his fund is down 52%. However, CGM is still known as one of the top performers, boasting an 18% annual return for the past 10 years. Meanwhile, the S&P has returned to 1998 levels.
From the Bull Pen: Those bullish on banking stocks can consider Wells Fargo (WFC). Notice it recapturing its 50 DMA ($29). Sell stops can be set below that level.
From the Bear Cave: The bulls have the advantage at the moment. But bears can still look to the industrial sector for downside opportunities. United Technologies (UTX) may be an option as it rallies into its 50 DMA ($50). Buy stops can be set above that level.
Quick Check Around the World
Asian trading closed with the Hang Seng 8.66%, Nikkei 5.20%, Sensex 2.20%, Taiwan 4.57% and Shanghai 3.57%.
Across the pond, we see the CAC 6.53%, DAX 6.07%, FTSE 4.59%
As of 8:25 a.m. EST, S&P futures are trading +30 to 901, and Nasdaq futures are +35 to 1212.
A Look At Commodities
Crude oil is trading +2.73 to 43.52. Gold is +17.50 to 768.00. Silver is -0.090 to 9.401, and copper is+10.25 to 145.75.
The dollar index is -1.034 to 86.080.
No events on the radar today. Good luck!
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