A wise man will make more opportunities than he finds. – Francis Bacon
The press is giving too much credence to the effect an interest rate hike could/would have on the markets and on the financial sector. First of all, the fact that the Fed has been debating whether or not to raise rates by a paltry meaningless 0.25 basis points speaks volumes. The Fed clearly understands that this recovery is nothing but smoke and mirrors; the main driving force behind being hot money.
Secondly, deflation is more of an issue than inflation. Take a look around you. You can start with Oil and go down the commodity rung; copper, Iron ore, coal, etc., are all trading significantly off their highs. Instead of marching to the drum beat of the naysayers, march to your own drumbeat; opportunity could be in the air.
Let’s take a look at the once might Citibank (C). The long-term chart certainly looks terrible and the stock appears to have made hardly any headway since 2008. One could simply state that Citibank has not made much headway because it is a rotten stock, but other than perhaps bringing on a brief moment of satisfaction, it would change nothing. However, if you discard the lens of negativity and take a look at the chart in an unbiased manner, you might spot something many others are missing. We will at this chart shortly. Are all the regional banks suffering like this? Logic dictates that there are strong players out there; take a look at the picture below.
PNC bank (PNC) appears to be thriving and the stock is trading well above its 2009 highs. One thing is certainly clear, every major market crash, proved to be nothing but opportunity knocking in disguise. If one understands the principles of mass psychology, then just by utilizing this one tool you could do rather well, provided you are patient and buy when there is panic and sell when the crowd is Euphoric. Don’t mistake bullish with Euphoric.
PNC is likely to test 72, with a possible overshoot to 67 before it attempts to challenge 100.00. As long as it does not close below 50 on a monthly basis, the outlook will remain bullish.
