Financial stocks are bucking the trend, rising while the rest of the market is heading lower.
How should you play it?
My first thought is that there is capital out there. The Bank of America (BAC) deal shows us that, says Karen Finerman on CNBC’s Closing Bell. It would not have been shocking to see Countrywide (CFC) go under – but now it appears that’s not going to happen.
And that makes me think – it’s time to cover. I’ve been short Lehman for a while I’m going to have to cover that trade, she explains.
Are you advocating long positions in financials?
No just taking back the short. My thinking is not that the problems are over but the available pool of capital being created to fill the holes is too abundant.
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Trader disclosure: On Jan 11, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (YHOO), (INTC): Najarian Owns (BIIB), (C), (CSCO), (MCD), (MSFT); Najarian Owns (AAPL) Options, (CFC) Options, (VLO) Options, (YHOO) Options, (WM) Options: Finerman Owns (GS); Finerman's Firm Owns (YHOO), (DSW), (WMT); Finerman's Firm Owns (LEH) Puts; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns (MDY) Puts And Is Short (MDY); Finerman's Firm Owns Russell 2000 Puts; Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns (CROX) And (CROX) Options; Finerman's Firm Is Short (IYR), (IWM), (SPY)