German Bank Index Breaking Below 60-Year Support Shelf

German Bank Index Breaking Below 60-Year Support Shelf

Below I plot the German DAX Credit Bank Index (think DB) and note that after a few failed attempts with subsequent bounces in recent years, it finally appears to be breaking below 60 years of support dating back to the…...

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Is that Something You Might Be Interested In?

Is that Something You Might Be Interested In?

Any former Entourage fan (we’re talking “deep cuts” fan) will remember the character of Bob Ryan, aka “What if I was to tell you…is that something you might be interested in?” Bob Ryan. For the unacquainted, Bob was best known…...

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Draghi Disappointment Unlikely, but Half-Life of Intervention Diminishing

Draghi Disappointment Unlikely, but Half-Life of Intervention Diminishing

Below you’ll see the ratio of the EUFN (MSCI Euro Financials ETF) vs. XLF (US Financials ETF). Note the long-term downward sloping channel b/t lines (1) and (2) it’s traded in over the period in which we have trading history…....

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Time for Euro Financials to Surprise, but in Which Direction?

Time for Euro Financials to Surprise, but in Which Direction?

In later April we suggested over-weighting this group in general and pointed to RBS specifically. Since that time the Dow Jones Euro Financial Index is up ~800 bps vs. a ~700 bps increase in the SPX. ┬áNot tremendous. However, RBS…...

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What to Make of the Recent Decline in Euro Financials?

What to Make of the Recent Decline in Euro Financials?

Put this together yesterday, failed to get it posted. Anyhow, believe it’s time to over-weight this group again, as we did last summer before it was trendy to “buy Europe“. ┬áThat call led to huge alpha being generated by being…...

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Time to Buy This Euro Financial

Time to Buy This Euro Financial

Three charts below: 1) Euro – weekly: breaking out above trend-line resistance 2) Ratio – DJ Euro Financials Index vs. SPX – weekly: breaking out above trend-line resistance 3) NBG – weekly: sits atop important support line (1) and is…...

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Euro Financials Have Beat the SPX by 30% Since Summer, Now What?

Euro Financials Have Beat the SPX by 30% Since Summer, Now What?

The chart below plots the ratio of the DJ Euro Financials Index vs. SPX This ratio has risen by ~30% since this summer after bottoming along line (3). For some background on why Euro-centric has out-performed U.S.-centric in recent months,…...

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The Case for Euro Financials Out-Performing the Broader Market Remains Compelling

Here is some background on how we’ve approached this subject in the past here and here. In a nutshell, we’ve been favorably disposed to Euro financials since May and have believed they could out-perform both the broader market and their…...

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In a Down Market and in Only 10 Days, Our Long XLF, Short Regional Bank Spread Trade is up 400+ bps

In a Down Market and in Only 10 Days, Our Long XLF, Short Regional Bank Spread Trade is up 400+ bps

Since October 5th when we suggested the possibility, the ratio of the KBW Regional Banking Index vs. the XLF financial ETF has declined 420 bps! In other words, our suggestion to long the XLF and short regional banks has generated…

Regional Banks May be Set to Under-Perform Larger Ones

Regional Banks May be Set to Under-Perform Larger Ones

The chart below plots the ratio of the KBW Regional Bank Index vs. the XLF. As it rises, regional banks out-perform; as it falls the XLF out-performs. The ratio is breaking below trend-line support and a multi-year consolidation pattern. That…