Financial Select Sector SPDR Surges 16%, Says Market Timer Frank Kollar
After the Treasury Department announced a plan Monday to clear out as much as $1 trillion in so-called toxic assets from the financial sector in an effort to strengthen the banks enough to get them to lend again, the S&P 500 Index (SPX) and Nasdaq 100 Index (NDX) rallied some 7%. The rally was led by the powerful surge in financial stocks.
Is this the start of a new advance that will, this time, last? Probably it is, but still, even with the huge 16% gain in shares of Financial Select Sector (an amount that it managed to lose in the prior two trading days), this ETF did not close above its previous rally highs reached only on March 18 when it closed at $9.40 a share.
Though not technically a breakout, with NYSE up volume outpacing down volume by almost 31 to 1 on Monday, you have to be looking for higher highs ahead.
Our target for the initial move is $13.67. If surpassed, look for $14.43 in coming months.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in Financial Select Sector SPDR.
Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.
Kollar's research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
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