Have you noticed? Goldman Sachs (GS) is now back up to the same levels as in September 2008 (right before the bottom fell out). Is it just me or is that crazy?
Looking at some of the other major banks (Wells Fargo, JPMorgan, Bank of America, Citigroup, and Morgan Stanley), this is also the case with the exception of Citigroup (C) and Bank of America (BAC). Even though Citigroup and Bank of America aren’t at their old levels, both have advanced over 250% from low to high in the rally.
So, my question to you is has there really been that much of a turnaround in the health of all these banks?
Regardless of their fundamentals, I think it is very evident that professionals have been propping up the entire financial sector and we are starting to see evidence that this bubble may soon burst. Take C for example:
What I take from this chart is that the smart money began to accumulate C on the way down, helping to propel it up 200% in 12 days. Let me repeat that, 200% IN 12 DAYS.
After they made their huge profits, they began to unload C at each top we see on the chart. Now, C has barely moved since they left town and I believe that reality will hit the market and all the suckers that went long around $3.75 to $4 hoping that the rally can hold up will be left to get burned.
Citigroup has the most defined chart, but you can see a similar situation in all the other banks I listed above.
Now, would I short these guys? I would definitely throw a little cash in the shorts, but I would definitely keep most in cash as we wait for the market to really take a direction. There is some major stuff going on in the markets these days and I feel a storm brewing..