Banks Fairly Valued and Contributing to Market Strength

Continuing last week’s strength, Financials and Technology led the market again today. Banks were up nearly +2% intraday, although they lost some of their steam when put-option trades in Financial ETFs reached 4-month highs.  Last week, they roared ahead +7%, and they are now up more than +20% year-to-date.

If the bulls had been paying attention to the economic indicators reported last week, you’d assume the market would be down substantially by now.  The fact is, however, that the S&P 500 is just down about -0.4% for the past calendar week, and today it’s up over a full percent. Obviously, the bulls didn’t see the surprising drop in Consumer Confidence, which fell to 46.0 from 56.6 in January, its lowest reading since early last year.

Last week the market (S&P 500) battled resistance at the 1100 mark as if it were in the yawning sand trap at #14 on Pebble Beach – and Tiger Woods can't help us out just now.