- OnTheDocket
- Posts
- Are Hedge Funds Accumulating Regional Banks?
Are Hedge Funds Accumulating Regional Banks?
David Frost
October 31, 2023
⚾PRE GAME WARMUP
It's turnaround Tuesday...
Not much fane fare overnight, just a pull back in the spirit of a retracement from yesterdays rally, then a float back up. For now, we'll use [Login here] as our bull pivot for higher price and an attempt to fill a gap above at 417.60...
Above on candle closes opens the door for another leg higher that will be handled in a real time formation as and if needed.
What about the bear case, the one that contains a shakeout operation back down? We'll use [Login here] as our bear pivot today. Below on candle closes will open the door for Mrs. Market to fall and pay a visit to some lower places to run some tests.
One such place is close by at the semi phat round number of 415.00. This is a support place where they can bounce right back...
But if they don't, it opens the door for another fall and leg down that will handled in a real time formation as and if needed...
🎬THINK IN PICTURES
Nobody wants to buy the regional banks for fear of another contagion. Let’s look a little closer at the weekly chart of KRE which is the regional bank exchange traded fund. What have we got to work with?
There’s an on time situation from the most recent pivot high. There’s a sign or signal of a trend change. We’ve got a higher low (so far) which is a bullish sign. Poised for a bounce back?
Share OnTheDocket
You currently have 0 referrals, only 5 away from receiving Free Month InsideTheNumbers LIVE.
💣RECKONOMICS
The US Treasury will borrow around $775 Billion in the current quarter. They position the number as an improvement since they borrowed over a trillion dollars in the last quarter. Sure it’s down, but from the redonkulous to the ridiculous.
On one hand it’s necessary to borrow money for bill payments, to keep the lights on and the music playing.
Dig a little deeper, let’s follow the money and consider the latest conversation within the halls of congress. They’re crafting bill(s) to fund the war in Ukraine and now Israel.
Since we don’t have the money to allocate around the world, we borrow the funds from where? Around the world. Our two largest holders of US Debt and lenders of last resort are China and Japan.
Wait, China? So you’re saying we borrow money from China to send over to the Ukraine while Russia has aligned itself with China, Iran, North Korea and who knows what other adversaries. Strange bed fellows…
How about this one. Helping Israel fight back against the horrific attack of October 7 which seems legit to most rational people. However they’re the 13th largest economy in the world, aren’t they able to fund their own war?
Helping and funding are two different things. Why aren’t we borrowing the money, marking it up and “lending” them the funds with a payback schedule?
Why do we give it away? Who running the business of the USA.
🩺PSYCH WARD
Attribution - The action of regarding something as being caused by a person or thing.
Let’s say you pick a stock, it goes up, you make money and all is good. That’s the way it’s supposed to be, right?
The rub is whether or not we’re honest with ourselves on both the wins and the losses.
The stock could have been chosen from made up fundamental analysis or technical analysis, either way it’s the same story.
It’s a bull market and your diligent work in finding companies to buy is paying off, the metrics used for your search are producing consistent winners. PE Ratios, Book Value, PEG Ratios or any other alphabet soup terms are all working together.
But wait, it’s a bull market and almost everything goes up if the trend is up…
Does this work in a bear market? Of course not, everything falls. but what happened to the metrics, why didn’t they work? Because it’s a bear market and if a trend changes, everything changes and the hocus pocus fundamentals no longer make sense since everything gets thrown out with the bath water.
We attribute the successful trades to the formula or metrics we used to pick stocks and assumed that was the reason we were making money. In reality, the profits were a product of the bull market and not our stock selection.
When it doesn’t work, we blame the bad trades on “the market,” not realizing we were never “picking stocks” in the first place, just along for the ride…
Same goes with the stuff from Joe’s Indicator Shop found in most trading platforms. Everything works sometimes by happenstance. Can you tell the difference between being right and lucky?
Careful what you attribute the results to, it’s likely not what you think…
🏆MEMBERS SAYIN’
The numbers work. $3200 today in less than an hour of work. Jamie M.
Caught the trade in Apple for $800. The live room is a gold mine of information. Henry V.
COMMON SENSE MARKET STUFF EVERY DAY
DISCLAIMER STUFF: Nothing found in this communication is financial advice. This newsletter is strictly educational and not intended for or should be thought of as investment advice or a solicitation to buy or sell any assets or to make any financial decisions whatsoever. Please be careful and always do your own homework.