Trader’s Narrative

Unless you’ve been living in a cave, you know that there is total carnage in the stock market, especially within the financial sector. By the way, if you have been living in a cave, congratulations on a very astute real estate investment.

Anyway, bank and investment bank stocks are trading at empty shadows of their glorious past. It almost makes you pine for the dot com bust. Almost. But even amid all this mayhem, are there financial stocks which are left standing, more or less unhurt? or dare I say it, strong?

It turns out, yes, although you have to sift through a lot of muck. And what you do find are small to medium capitalization stocks. The fact that these stocks have held up and are actually going up in some instances while the market as a whole craters is a huge sign.

I’ve mentioned the power of relative strength a few times and this is yet another example.
I’m going to highlight just a few nice looking charts. Keep in mind that I’m evaluating them based on their technical outlook only. The first is Hudson City Bancorp (HCBK):

There is also PNC Financial (PNC):

The largest capitalization stock on the list, Wells Fargo (WFC) has seen some wild swings in price but it is showing a lot of resilience:

And finally, First Financial (FFIN):

These are just a few ideas to prove that even in the midst of absolute mayhem, there is always a few strong stocks that buck the trend. My bet would be that stocks like these would outperform their peers when thing settle down (hopefully soon).

Stranger Than Fiction
You probably think that Paulson, Bernanke and a crack team of MBAs and PhDs huddled together in a grueling caffeine fueled session to come up with a plan which requires $700 Billion US dollars.

But the truth is stranger than fiction. The value of Troubled Assets Relief Programme (TARP) which is looking more and more like a TRAP, was pulled out of thin air.

According to an article in Forbes:

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

I guess a Bajillion dollars just didn’t sound as impressive as $700 billion.

And even stranger… McCain has decided to “suspend his campaign” to return to Washington and solve this mess. Despite the fact that he has been present for votes less than every other single senator. And despite that he hasn’t actually even taken the time to read the 3 page preliminary report put out originally by Paulson. But all this may be moot since before he arrived to rescue the day, the two sides came together in a compromise.

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