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Chartology: Financials Leading Indicator For Market

Friday, 4 Jun 2010 | 5:54 PM ET

It appears that the financials have been a great barometer for how the markets will trade.

Take a look at the 1 month chart of the Bank ETF and the a 1 month chart of the S&P. They’re noticably similar.

  Price   Change %Change
S&P 500
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Why the correlation?

I think the correlation stems at least in part from the uncertainty surrounding financial regulation, explains Anthony Scaramuuci of Skybridge. Investors are focussed on the action in banks stocks and then making their moves.

How long will it last?

I don’t think that’s going to stop until financial regulation is resolved and Goldman settles with the SEC, Scaramuuci adds.

Chartology
Financials in focus, with Anthony Scaramucci, Skybridge Capital.

What’s the bank trade?

We're in a high volatility environment where some banks are making money and others are losing money. I have believe that Goldman, Morgan Stanley as well as the trust banks like Northern Trust are all making money, muses Joe Terranova.





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Trader disclosure: On June 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Gordon Is Short Australian Dollar; Terranova Owns (RIG), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (IPSU), (SWN), (AAPL), (CVS), (IPI), (TEVA), (FXB), (GLD), (V); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman Owns (BAC) Leaps; Finerman Owns (BBY); Finerman Owns (BP) Calls; Finerman Owns (HPQ); Finerman Owns (JPM) And (JPM) Calls; Finerman Owns (RIG) Calls; Finerman’s Firm Owns (AAPL); Finerman’s Firm Owns (BAC); Finerman’s Firm Owns (BBY); Finerman’s Firm Owns (HPQ); Finerman’s Firm Owns (JPM); Finerman’s Firm Owns (RIG) Calls; Iuorio Owns (GLD), (VNR), (C ); Iuorio Owns (ABX) Calls; Iuorio Is Long Put Vol In S&P Futures; Iuorio Owns (FXA) Calls; Iuorio Owns (FXC) Calls

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Mike Khouw
Cantor Fitzgerald makes a market in (AA)
Cantor Fitzgerald makes a market in (AAI)
Cantor Fitzgerald makes a market in (AAPL)
Cantor Fitzgerald makes a market in (ABDE)
Cantor Fitzgerald makes a market in (ALK)
Cantor Fitzgerald makes a market in (AMD)
Cantor Fitzgerald makes a market in (AMGN)
Cantor Fitzgerald makes a market in (AMZN)
Cantor Fitzgerald makes a market in (AXP)
Cantor Fitzgerald makes a market in (BA)
Cantor Fitzgerald makes a market in (BAC)
Cantor Fitzgerald makes a market in (BRCM)
Cantor Fitzgerald makes a market in (C)
Cantor Fitzgerald makes a market in (CAL)
Cantor Fitzgerald makes a market in (CHK)
Cantor Fitzgerald makes a market in (CSCO)
Cantor Fitzgerald makes a market in (DELL)
Cantor Fitzgerald makes a market in (DPRT)
Cantor Fitzgerald makes a market in (EBAY)
Cantor Fitzgerald makes a market in (F)
Cantor Fitzgerald makes a market in (FCX)
Cantor Fitzgerald makes a market in (GE)
Cantor Fitzgerald makes a market in (GOOG)
Cantor Fitzgerald makes a market in (GS)
Cantor Fitzgerald makes a market in (INTC)
Cantor Fitzgerald makes a market in (JPM)
Cantor Fitzgerald makes a market in (LCC)
Cantor Fitzgerald makes a market in (LM)
Cantor Fitzgerald makes a market in (LUV)
Cantor Fitzgerald makes a market in (MA)
Cantor Fitzgerald makes a market in (MS)
Cantor Fitzgerald makes a market in (MSFT)
Cantor Fitzgerald makes a market in (NILE)
Cantor Fitzgerald makes a market in (NTAP)
Cantor Fitzgerald makes a market in (NVDA)
Cantor Fitzgerald makes a market in (ORCL)
Cantor Fitzgerald makes a market in (RIMM)
Cantor Fitzgerald makes a market in (SNDA)
Cantor Fitzgerald makes a market in (SNDK)
Cantor Fitzgerald makes a market in (T)
Cantor Fitzgerald makes a market in (TXN)
Cantor Fitzgerald makes a market in (UAUA)
Cantor Fitzgerald makes a market in (V)
Cantor Fitzgerald makes a market in (YHOO)
Cantor Fitzgerald makes a market in (XLF)

For Brian Kelly
Kanundrum Capital Owns (IBM)
Kanundrum Capital Owns (XLI)
Kanundrum Capital Owns (ELK)
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (CME)
Kanundrum Capital Is Short (FCX)


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GS
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MS
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NTRS
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