5 Banks to Watch Right Now
There are many moving pieces this morning.
The Fed, Treasury, and FDIC came out to breed some confidence by backing bank deposits.
Three banks failed in the past week.
Everyone is trying to compare this to Bear, Lehman, MF Global, Worldcom, Enron etc, but it's too early to tell.
Some are saying the Fed will cut rates, or at least stop raising. What does that mean?
The SPX isn't even at the December low of 3760, which is way above the October low of 3491. Even with all these volatile events.
So to me, Friday's SPX low of 3846 shouldn't be the 2023 low.
The Oscillator went out at -80 so we will get a bounce attempt.
3908-3928 is resistance. The major area is 3960ish.
Sectors are not created equal. Know what you own and why.
At times like this, if you want to take a shot at something, I’d use calls or puts so the risk is defined.
SPY did another Red Dog Reversal sell around the $399.71 pivot last Thursday. On Friday it broke below $390.53 to see $384.33. This morning it's been very erratic. If they try and rally, $390-$392 is resistance. Above that is $396ish. If they sell them, see how it handles $384.33. Below that is $377ish.
Now let's dig into the financials everyone's watching:
JPM did a Red Dog Reversal on Friday around the $129.22 pivot. This will be important because it seems like the major banks are getting the flows from all the regionals. It’s down small. See if it goes green or if sellers come in.
BAC isn't special but it did a small Red Dog Reversal long after a big move lower.
SCHW got hit hard and fast to show risk can happen. $75 was the trigger sell, and it hit $64 Friday. This morning it was down below $50. If you think it’s overdone, I’d go out a few months with calls because the risk is the premium paid. Look at SVB and SBNY – some thought they were getting bargains but they’re zeros. Watch SCHW today for sentiment.
COIN: I bought puts out a month in case this gets hit. But it’s a lotto play. BTC is up a lot today.
SBNY: I bought $60 puts early Friday because it felt like this could be next. The stock seems like a zero so this should pay off big.
Scott Redler's positions disclosure as of 2023-03-13 at 9.02.02 AM
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