The Financial Scare Continues
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ETF Watchlist
The Dow has plunged nearly 600 points before the Wednesday’s session as worries of another financial institution going under reignite. Credit Suisse (CS) is the next big bank in the crosshairs of the regulators as shares tank over 30% after a Saudi backer rules out further assistance for the bank.
This puts the financial sector back on our watchlist as the fear of contagion is now gripping the market yet again.
Financial Select Sector SPDR ETF (XLF)
So far, the XLF is down 3% in pre-market trading and continues to look weak. If this back also goes down, we expect not only the sector to get dragged down with it, but the overall market to take a hit as well.
One thing is for sure with all this financial debauchery, we are not quite out of the woods yet. For entry of a bearish trade, we would want to look for XLF to give us a good entry. Meaning, we would like to see some kind of relief bounce at some point to enter a bearish trade.
That will give us the high probability of the trade working out and avoid our stops getting hit too soon. Patience and discipline, as always, is the name of the game.
Don’t forget to watch my market breakdown below for more trade ideas.
And if you want to see the latest trade my students and I put on for my Smart Trades options trading service, you’ll have to join today! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today!
I look forward to trading with you, but until then, as always…
