Are financial exchange traded funds (ETFs) turning the corner?
Steve Halpern for Blogging Stocks reports that the Financial Select Sector SPDR (XLF) has barely fallen since the Bear Stearns (BSC) collapse. In fact, the fund is up 15.9% since the collapse. The iShares Dow Jones US Broker-Dealers (IAI) is up 21.8% since the collapse.
The editor of the Oxford Club, Louis Basenese, feels that when the bad news keeps coming, but prices don’t head notably south, the bottom is near.
Basenese also feels that downside may be protected because the Fed bailed out Bear Stearns, which in turn, put a safety net on the sector. Consider the last time XLF bottomed out: March 2003 and gave back 113% to those brave souls, with dividends over the next four years.
These funds are sitting below their trend lines (the 200-day moving average). If you’re really itching to get in, these funds are above their 50-day averages. Use that as your sell point instead.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.