Watch the Banks, Turn Off the Media

orwell 300x291 Watch the Banks, Turn Off the Media

This market only seems to let the shorts be “right” for a couple of days, and this market “always” seems to bail out the longs. The market will see another pullback, but if I’m right, they will continue to be of the shallow and buyable variety.

Monday gave the tape a scare, but on Friday we closed three $SPX points higher then where we started the week. Big Whoop. The market did sell off on higher volume, but doesn’t that always happen?

1525-1530  is the level to watch for higher prices. We are poking this level, but cant get through for now. That is resistance and it will either end up being  the natural fail spot, or if broken will lead us to 1550. I’m bullish , but cautiously so over the next couple of weeks.  I don’t want to be the pig that hangs on for the last twenty handles.

So what could be the catalyst for another move higher?  I’m just thinking out loud, but it could indeed be something that no one is really talking about. I speak of the bank stress tests that will be revealed next week. This has been underplayed because we are not at the Apocalyptic levels of 2008 when everyone hung on every word and detail of the report. ($XLF)

We all know banks are in better shape, if not excellent shape now, thanks to Bernanke and all the other enablers at large. This will probably allow some banks the green light to initiate or raise their dividends. This will make the market happy. It wont be a big surprise, but when markets are in a downtrend or an uptrend they look for something to fuel the fire.

The sequester came and went just like the fiscal cliff and the debt ceiling came and went. It’s all theater and fear will prevent you from profits. An LSD fueled chimpanzee could find hundreds of billions in spending cuts in about thirty minutes. I’m glad the market has given a resounding fuck you to mindless jokers in Washington.

February performance results are in, so go to the “Performance” tab at the top of this blog to email me for a copy.

 

Joe Donohue

Joe is a full time trader with 25 years experience. He is a senior contributor and investor in Stocktwits and has been seen on CNN Money and quoted in Marketwatch, Forbes, Reuters, NY Times and Wall Street Journal.