Tuesday, January 5, 2010

GS et al

I mentioned Goldman Sachs (GS) in a positive light last week. over 9 bucks later I can tell you that the easy easy money has been made on the breakout.

in the off chance you hopped aboard GS on my mention, you might consider booking the profit. not because I really think that GS will drop again, I don't know if you must know, but simply because the stock has hit a reasonable target for the type of breakout that I identified. the move from the 160 low has so far amounted to about a 50% retrace of the correction from 190 down to 160. the declining wedge pattern has a high probability rate, in my experience, but only if you accept rather conservative targets for the breakouts.

as for financial stocks as a group, they are going to have to pick up the ball for any further rally in the broad market. the last few days have been a good start, but we are going to need more from the too-big-to-fail segment of the market.

if the S&P is headed to 1200 (big if, I have really no idea) then you'll likely see XLF, the Financials ETF, at 17 or so, putting the XLF:SPY ratio around .142.