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Like Tom Bradford, ‘Eight Is Enough’ for Bank of America: Cortes

Remember the 1970’s TV show Eight is Enough. Well top trader Steve Cortes says Eight is Enough for Bank of America shares, too.

Cortes calls this the Tom Bradford trade; (that’s the patriarch of the Bradford family played by Dick Van Patten.)

The pop culture reference is intended to be a slice of fun, but Cortes’ trade is quite serious.

He says with Bank of America flirting with the $8 level, there are three major reasons to short the stock.

- Technicals: “The stock has had an incredible rally and is now very overbought,” he says. $8 generated resistance last August and Cortes thinks it happens again.

- Lazard: “Rival firm Lazard gave a foreboding analysis of capital markets business in general,” says Cortes. He thinks BofA and most other firms face exactly the same challenges

- Yield Curve: “Treasury yields are staying low defying Street predictions – I think the 10 year stays under 2%,” he says. That makes it tough for banks to make money.

Cortes goes on to say, “pricing power in the economy is muted – we’re not seeing wage growth – in fact real wages are declining – I see a slog forward.”

All these catalysts are negative for banks; hence the short position. “The risk reward makes sense to me,” he says.




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Trader disclosure: On Feb. 7, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long IBM; Terranova is long EMC; Terranova is long AXP; Terranova is long AAPL; Terranova is long TRLG; Terranova is long JOY; Terranova is long SNDK; Terranova is long MCD; Terranova is long MA; Terranova is long OXY; Terranova is long SU; Terranova is long CNX; Terranova is long CSCO; Terranova is long SBUX; Terranova is long FXE; Terranova is long TBT; Cortes is long MO; Cortes is long SO; Cortes is long Treasuries; Cortes is short SINA; Cortes is short BAC; Cortes is short Silver;

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