logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Stocks Edge Back Up: Short Covering or Sustainable Rebound?

By  +Follow June 27, 2013 1:23PM
Share:
Tickers Mentioned:

SqueezeThe market opened up the week with a sharp move lower, but has been gradually working its way back up. Is this mini-rally a sign of strength or a trap for bulls? Equities.com asked Toni Turner of TrendStar Trading Group her thoughts in this week's interview, and where she thinks the opportunities are in this market.

EQ: The market got a scare earlier this week sparked by significant concerns coming out of China. Despite some intraday volatility, the major indexes seem to be edging up again. What are your thoughts on the movement so far?

Turner: We have two primary concerns. We have China's potential credit bubble, and we have a sudden rise in interest rates in the U.S. that can potentially give a belly punch to our economy just as it is showing signs of getting on its feet. To me, the move down is understandable, but now we will see if Monday was the so called "bottom" of this move lower on the S&P 500, and if the rebound we are enjoying now is sustainable.

We also had some good news this week with the Case-Shiller index and durable goods orders, as well as other economic reports. Of course, some of the recent bounce in the past few days has been due to a short squeeze. So I don't assume this short term rally is necessarily a signal that everything is OK now. I'll need at least a few more days to see if this is simply short covering or if investors are really getting back into the market.

We have to remember two things: the market typically moves higher heading into a holiday—July 4 is next Thursday—and we are closing out the second quarter, which means there's window dressing right now as we close it out. So next week being a holiday week is going to be shortened and it may be a bit flat, with many institutional traders and investors on vacation. But I believe the week of July 8, we're going to get a reality check.

EQ: Longer-term investors may not like the short-term volatility that we're starting to experience in the market, but for active day traders, does this mean more opportunities to take advantage of?

Turner: Absolutely. Short-term traders like volume and volatility. That's our mantra. We can't make money in a flat market. To that point, the last move down and then the quick rebound off of the low gave nimble traders quite a bit to work with.

EQ: Regional bank stocks have been getting more attention, as you tweeted recently. Is this because they stand to benefit if and when the Fed begins to taper the stimulus program?

Turner: That's part of it. Naturally, if interest rates move higher, banks as a whole, will benefit as they can charge customers higher interest rates on loans. Additionally, the Case-Shiller 20 City index came in this week 12.1 percent improved in home prices over the same period last year. Regional banks typically benefit from improving home prices. Plus, we have an infusion of foreign buyers coming into the U.S., mainly from Asia, who are buying up properties, and I know for a fact that certainly not all of them are paying cash. Many of them are financing these purchases. That stands to benefit regional banks.

Also, if you noticed, regional banks did not fall off a cliff when the market moved lower. If you look at the SPDR S&P Regional Banking ETF (KRE), when the market moved lower, the KRE remained above its 50-day moving average, and many of the banks in that space have moved higher over the last few days.

EQ: What are some other stock sectors and industry groups that look appealing to you? Which ones do you want to avoid?

Turner: I do like the regional banks and the KRE on a pullback to between $33 and $33.25. It jumped up over the last couple of days.

If bond prices actually find a low here, and start to rise in the next few days, I might tiptoe into the iShares Dow Jones US Real Estate (IYR). Mostly though, except for quick trades, I'm standing on the sidelines and I'm waiting for the market to decide what it's going to do next.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for KRE
Christopher Angus
1 Oct 14 06:10:04
Stocks near strong Wedge pattern: $SHOO, $KRE, $AXAS, $PBD
Shomik Ghosh
1 Oct 14 00:28:12
$sage and $bery still holding up nicely, $tgt still good, $kre not so good, in general not trading much, lots of technical damage and chop
Livevol Community
30 Sep 14 11:02:03
Block Trade: 1:45 $KRE Oct31(W) 39 C (PHLX) 0.40 7500x Today's Full Report: http://t.co/t7HEUAzbNg
Ben Silverberg
30 Sep 14 09:12:31
With ongoing weak economic data forestalling higher rates, expect Regional Banks to remain under pressure. $KRE $KRU $IAT
Market Int Center
30 Sep 14 08:02:38
Potential S&P Regional Banking ETF SPDR $KRE Trade Has 2.36% Downside Protection ( http://t.co/d3fVwu7w5d )
Keith McCullough
29 Sep 14 02:02:51
TREASURIES: 10yr yield -5bps last wk to 2.53%; Yield Spread compressed the same, weighing on banks $KRE
Seeking Alpha
29 Sep 14 00:01:04
Banks' LCR-Based Demand For Treasuries Moderates http://t.co/WAFGg7ZJYu $KRE $KBE $IAT $KBWB $RKH $PLW $QABA $GOVT $KRU $KBWR $KRS $TAPR
Jake Catskill
27 Sep 14 15:38:06
Kickstarter is now funding more small businesses then $XLF and $KRE. But, the FED mandate is to keep unemployment low?
Steven Schoenfeld
26 Sep 14 16:02:46
RT @ETFtrends: Regional Bank #ETFs for a Rising Rate Environment http://t.co/ZWCGbUmRCl #banks #interestrates #financial #ETF $KRE $KBWR $I…
ETF Trends
26 Sep 14 16:01:57
Regional Bank #ETFs for a Rising Rate Environment http://t.co/ZWCGbUmRCl #banks #interestrates #financial #ETF $KRE $KBWR $IAT $XLF $KBE
Tom Lydon
26 Sep 14 15:55:20
Regional Bank #ETFs for a Rising Rate Environment http://t.co/4jmMurMZAy #banks #interestrates #financial #ETF $KRE $KBWR $IAT $XLF $KBE
Forex Robot
26 Sep 14 14:10:03
RT @SeekingAlpha: Ferdinand The Bull - Financials And Bank Stocks http://t.co/awJMQs6D9b $XLF $FAS $FAZ $UYG $KRE $VFH $KBE $IYF
awolam
26 Sep 14 14:06:55
RT @SeekingAlpha: Ferdinand The Bull - Financials And Bank Stocks http://t.co/awJMQs6D9b $XLF $FAS $FAZ $UYG $KRE $VFH $KBE $IYF
Seeking Alpha
26 Sep 14 14:01:49
Ferdinand The Bull - Financials And Bank Stocks http://t.co/awJMQs6D9b $XLF $FAS $FAZ $UYG $KRE $VFH $KBE $IYF
Old Bull Lee
26 Sep 14 10:07:12
Keep an eye on those piggies, ladies and germs. $KRE $BKX
OneChicago
26 Sep 14 08:06:01
$KRE Oct Block Trade: 285 trade. ~$1.1 MM notional value.
OneChicago
26 Sep 14 08:02:01
$KRE Oct Block Trade: 424 trade. ~$1.6 MM notional value.
OneChicago
26 Sep 14 07:02:01
$KRE Oct Block Trade: 281 trade. ~$1.1 MM notional value.
StockMarketCookBook
25 Sep 14 14:17:39
Coyote Ugly Day: Major sector breakdowns in Financials $XLF, Regional banks $IAT $KRE, Tech $XLK $VGT $SOCL. Biggest loser? Gaming $BJK.
Market Int Center
25 Sep 14 12:08:00
S&P Regional Banking ETF SPDR $KRE Showing Bearish Technicals With Resistance At $38.94 ( http://t.co/pq1SyA3YPP )
john pagnotta
25 Sep 14 09:30:52
RT @allstarcharts: Here's your failed breakout in Regional Banks last week. Isn't that nice? $KRE http://t.co/gxVwKevqLI
Ariel
25 Sep 14 08:41:11
"@allstarcharts: Here's failed breakout in Regional Banks last week... $KRE http://t.co/0jd0f5IIl1" Here's $BKX http://t.co/eAWBGWWHTY
Peter Herman
25 Sep 14 08:25:02
RT @allstarcharts: Here's your failed breakout in Regional Banks last week. Isn't that nice? $KRE http://t.co/gxVwKevqLI
J.C. Parets
25 Sep 14 08:20:27
Here's your failed breakout in Regional Banks last week. Isn't that nice? $KRE http://t.co/gxVwKevqLI
Alan Farley
24 Sep 14 10:41:50
Oh banks why do you suck so badly? $BKX $KRE $KBE
BlockTradeAlert
24 Sep 14 10:33:48
BLOCK TRADE: $KRE 550,000 shares @ $38.55 [13:33:47]
Nigam Arora
24 Sep 14 10:11:34
THE FED IS STEALTH HAWKISH, TIME TO ADJUST $KBE $KRE $YCS $EWJ $JOF $FEU $HEDJ $TBF $ITB http://t.co/fxcLc6ZLMu
NSA Target
24 Sep 14 07:02:20
RT @KeithMcCullough: Yield Spread compresses below 200bps again to 196bps wide - bearish for Regional Banks $KRE
Market Int Center
24 Sep 14 05:22:58
S&P Regional Banking ETF SPDR $KRE Showing Bearish Technicals ( http://t.co/k0NlSmUW0l )
Paul W.H. Kim
24 Sep 14 03:09:11
RT @KeithMcCullough: Yield Spread compresses below 200bps again to 196bps wide - bearish for Regional Banks $KRE
DR JAMES CABOT
24 Sep 14 03:01:15
RT @KeithMcCullough: Yield Spread compresses below 200bps again to 196bps wide - bearish for Regional Banks $KRE
Keith McCullough
24 Sep 14 02:53:11
Yield Spread compresses below 200bps again to 196bps wide - bearish for Regional Banks $KRE
Ben Silverberg
23 Sep 14 17:08:54
Leading market sectors lower Tuesday included: $DIA $SPY $IWM $XLF $KRE $KBE $XLB $XLI $IYT $XLV $XRT $XLY $XLP $KOL $SEA and many more!
Jake Catskill
23 Sep 14 15:29:12
Just talked to my economist friend, he's back in a 5s-30s yield curve flattener, this is bad news for: $KRE $XLF $IWM, but good for $TLT.
Keith McCullough
23 Sep 14 12:13:05
Regional Banks $KRE -1.1% continue to suck the tailpipe of the Russell
Nigam Arora
23 Sep 14 09:06:50
THE FED IS STEALTH HAWKISH, TIME TO ADJUST $KBE $KRE $YCS $EWJ $JOF $FEU $HEDJ $TBF $ITB http://t.co/5cPtLasw0J
BNK Invest
23 Sep 14 09:02:06
First Week of $KRE November 22nd Options Trading #stockoptions http://t.co/QVpIkVf3xt
Market Int Center
23 Sep 14 08:17:44
Potential S&P Regional Banking ETF SPDR $KRE Trade Targets 4.82% Return ( http://t.co/vYXOmcmnwu )
Brett Steenbarger
23 Sep 14 08:16:59
Is the financial sector really as strong as it looks? http://t.co/Vj7YQJ4o0W $STUDY $XLF $KRE $IYR $AGG $PSCF
				
				
By  +Follow June 27, 2013 1:23PM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.