Transcendental Market Fragments:
The Market:
As expected, the market bounced, led by the robber barons (banksters). Stocks were oversold after topping in mid-June and a campaign to eliminate put premium has been expected to happen as the market approaches options expiration this Friday.
No, it's not likely to last. Sentiment went through the roof for OEX traders, who are almost always wrong on market direction - especially so when they're bullish. The day ended with calls receiving almost three times as many dollars as puts. Option writers certainly don't want to pay off and a rise into Friday seems like a long shot.
PHLX/KBW Bank Sector:
The Bank Sector Index, BKX, rallied yesterday, helping pull the rest of the market up with it. However, the rally simply retraced some of the losses and has once again wedged itself up against a major long term downtrend line. If that line turns the index down, it could be quite important here and push the market down for the remainder of the week.
Bottom Line:
The market should make a high pretty quickly here and start moving down again. However, given earnings season, anything is possible and news will certainly help push the market in several directions. My take is that the bank earnings are going to be greeted with a large dose of skepticism - and selling - from traders, who are likely to discover that appearances are quite deceiving, especially when earnings are coming mostly from the government. |
