The financial sector is working. So why do I want you to avoid it?

Discussed in this article: The Goldman Sachs Group Inc. ( $GS )

I want to look at financials today. I want to show you where you shouldn’t be. That might surprise you, but here’s the deal; we’ve got really, really awesome entry points here on the financials, so this is where we want to be, right?

I can draw the zigzags any which way and make a case for a potential head and shoulder, a potential flying, fluttering whizzer blast, or whatever. But the bottom line is, we’re making higher lows here and that’s what’s really important. So buy the financials, right? Now, we’ve got some resistance overhead here but that can be gained right? We can get through that.

But here’s the deal, this is up 0.70 percent today. Let’s look at the S&P. The S&P is up 0.80 percent, so the financials have actually under performed today. You look at Goldman Sachs ( NYSE:GS ), 0.50, it’s holding support, great! But it’s also got a lot of resistance to chew through.

JP Morgan ( NYSE:JPM ). Yippee! Morgan Stanley ( NYSE:MS ) 0.71. Great! What was that S&P again? Oh, I know, 0.80. How about the Nasdaq? That was over one percent. How about the credit cards? MasterCard ( NYSE:MA ), 0.74. Great! That’s totally working, absolutely working. Visa ( NYSE:V ), nice bounce today. What’s the problem here though?

By the way, I think all of these stocks go higher, that’s really not my point. We’ve got some resistance here as well. My point is this: when you’ve got the market in full-blown bounce mode, You look at the SPDRs ( NYSE:SPY ), volume, heavier than average, not as much as yesterday, but that was the last day of the quarter okay, everybody’s trying to make themselves look smart by being in the right stuff, so you know there’s going to be a lot of churning going on.

But we are technically bouncing stochastics down below the twenty-line, down below this line here and starting to move up, that’s what you want to see. So there’s every reason to look at the S&P and turn off the TV, forget about all that stuff in Washington, because guess what? It really doesn’t affect your trading, might affect other things, good for you, but it really does not affect your trading.

With all of this stuff going on, who would have thought that the S&P would be up this much? Not me, but if you look at the chart, to the exclusion of all the so-called smart people on TV, not; then you’ll see that this has been a text book bounce.

So enough editorializing by me, my point is clear; when you’ve got a market that’s obviously working, and this is obviously working, feel free to jump into the financials, somebody is, but don’t be overweight there, you’re going to make money elsewhere, you’re going to make a lot more money elsewhere.

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