http://stockcharts.com/h-sc/ui?s=WFC&p=W&yr=10&mn=6&dy=0&id=p99541559962 I just find it hard to believe that something like say, Wells Fargo, is worth just as much now as it was before the crisis started. Yet there it is
Hasn't the fear of failure been shot down for a while? I mean hasn't the government basically said they won't allow a bank the size of Wells Fargo to fail already by propping them up "by any means necessary"?
True - but markets are forward-looking. When the crisis started, there were lots of questions about if the economy was going to get worse, and if so, how would the banks be affected. Now, those questions kind of have been answered. Even though things ARE worse, the banks now have access to really cheap capital due to 0% feds interest rates that they can make good profits on. So the future for the banks looks better in that regard. I agree, the valuations and, in particular, the daily moves don't make a lot of sense - but it's impossible to say if things are overvalued now or if they were undervalued before.
True - but I think there were legitimate questions about dilution and then ther's always the fear of uncertainty. While WFC wasn't going to disappear, there was no telling if they would get diluted by new issues, or if the gov't would convert preferreds to common, etc. It's sort of the buy-on-the-rumor, sell-on-the-news - except in reverse. Many companies report terrible earnings and shoot up. Same kind of thing, I guess. That said, I think the banks are coming back down at some point - not anywhere near their lows, but just from the reality of profit-taking. If you made 60% in BAC in the last week, you probably are going to sell to lock in some of that profit.
JPM is back up, BAC is on its way. I really see C going up as well. I am hoping it hits $12 by the end of this month.
Keep in mind that C's problems are of a bit different nature than BAC/JPM. Unlike those two, the gov't diluted it heavily with the conversion of preferred shares to common equity.
With OPEX upcoming this week, things could become even more interesting. Some consider OPEX weeks to have a Bullish tendency with the following Monday having a Selloff - Bearish bent. Then again, recent market activity has been amazing, so nothing is definite at the moment.
$SPX is approaching moment of truth. Long downtrend line and this uptrend are converging, and the prospects don't look good.
The obvious answer to what's going on, consumer spending is falling I am in a buying mood, though, so this is a good time
My Ford stock absolutely got raped the past two days with Ford issuing more shares and investors cashing in. I guess the bright side is that now is a great time to put some money in my Roth IRA...
