BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

The Unconvincing Rally In Financials

Market Movers

by Felix Salmon
Main
Angelo Mozilo's VIPs   To Walk Away or Not?

Recent Blog Posts

Links

Jul 17 2008 12:00am EDT

The Unconvincing Rally in Financials

Financials are on a roll right now: the XLF index fund, which tracks the S&P financials index, traded as high as $20.89 this morning, exactly $4 or 23.6% higher than where it traded at the same time Tuesday morning. That kind of volatility bespeaks short covering to me, which means that the growlings from the SEC might be partly responsible for this latest uptick.

The problem is that short-covering rallies, by definition, have no conviction and often don't last long. We're in the middle of earnings season, which means volatility's probably going to remain high in the short term. And anybody looking at this mini-rally and seeing cause for optimism is, I fear, being decidedly premature.

. □

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.


Connect With Portfolio.com
Like Portfolio on Facebook

Come on, like us—you know you want to.

Follow Portfolio on Twitter

Follow us and if you're an innovative entrepreneur, we'll return the favor.

The Mix

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

People & Ideas

Whisky To-Go-Go

Now there's a company that let's you taste your knowledge of fine blended Scotches by mixing a whisky of your own. Read More