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BANKS MORE OVERBOUGHT THAN EVER

17 April 2009 by Cullen Roche 1 Comment

I am a big believer in mean reversion.  As of right now, the financial sector has NEVER been this overbought.  This chart is as staggering now as it was in early March when the situation was the inverse.   Anyone who thinks this is sustainable is in for a big surprise, but I am sticking to my thesis that the banks are not shortable until after the stress tests.   Great stuff from bespoke.

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Comments
  • alex

    I actually wonder if after BAC and MS report, that banks will retrace in face of uncertainty from the stress tests. That is, of course, unless the government releases good news every day about the tests. So it would still be pretty risky.

    04/17/2009 at 1:48 PM