Will it stick? Only time will tell. The financial sector has been full of nervous energy, but the Federal Reserve’s 0.75% rate cut on Tuesday might restore some confidence. Financials are nowhere near out of the woods yet, and plenty of concern about the sector remains. Many wonder if Bear Stearns is just the first of many collapses to come.
Other financial ETFs, including the Financial Select Sector SPDR (XLF) and the iShares Dow Jones US Financial Services (IYG) both finished up more than 8% higher yesterday. We would not buy these funds for our clients until they go above their 200-day moving averages. However, if you’re considering a look at these funds sooner rather than later, you can use the 50-day moving average as a gauge instead.
