As I said in my post last night, breaking 870 today seemed way to easy. Today we have a Meredith bounce, arguably the best analyst on financials on Wall St. who predicted most of what has occurred including the big bounce in financials in Q1. She echoed alot of my thoughts. The earnings for financials should be amazing in Q2 even though longer term she remains bearish. Like I said, the key is how they react after earnings. If the bounce extends on decent volume like it is today, the test of 870 held. Last quarter the market turned on Bank of America and Citigroup CEOs comments in early March that the banks made money in Q1. Meredith is big enough she could be the same type of catalyst. She is bearish longer term and so whether we hold the 895 to 902 level in the S&P will be determined how far Wall St is looking ahead past these numbers (assuming she is right overall). A few weeks or 3 to six months?
"Nothing improves on a core basis but you got so many things moving around that from a tactical basis basis if tangible book is moving up you don't want to be short these names going into it." - Meredith Whitney
Don't take this as being bullish outside of a trading call (the traders are taking full advantage today). She thinks unemployment is likely to rise to 13% or higher. Most bears are around 11 to 12%.