Banks and Financial Stocks – Watching Capital Flows

Are Banks Ready To Rally?

Several banks expect tax-reform to make deep dents in fourth-quarter earnings. Goldman Sachs (GS) reported that it would take a $5 billion hit to its fourth-quarter profits. Shortly before that, Bank of America (BAC) announced a $3 billion dollar write-down, yet the stock price held its ground. Early in January, on assumptions about the law’s final form, we noted Citigroup put the cost at a $20 billion. Foreign banks are not immune to the damage: Barclays reports £1bn ($1.4 billion); Credit Suisse see a Swiss Franc 2.3 billion ($2.4 billion) hit to earnings, yet we see capital flowing into banks.

Deferred assets and repatriation are two terms to research over the weekend. For now, it appears big banks have an incentive to bring the money home.

Wall Street Jesus has been talking about this on his Twitter feed, noting sweepers and calls. In addition, the Najarian’s have been talking about BAC and JPM exclusively.

Bank Heat 01-19-2018

Bank of American held up very well, after reporting its earnings this week. We waited until after this event, for confirmation that institutions were not selling their shares.

RSI is showing muscle, with price firmly above the ascending 9/20ema. MACD is above its signal line and rising, indicating bulls are in control. Volume has been above average since late December 2017.

BAC-01-19-2018

The monthly has held my attention since price crossed above VBP resistance in late 2016, surging in early 2017 as the “Kirby” opened up to a lack of overhead supply.

BAC Bank Positions

I started positions in BAC, looking to add in the short-term. I would like nothing better than swinging these positions into the next earnings report 3 months from now.

Happy Fry-Day,

Vinny



Bollinger Band Scan One Month Later

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Vinny Gambini

Trade Fundamentals w/ Technical Analysis - CANSLIM method using high probability setups and Ichimoku Trend Analysis. Architect, Family Man and Father of three.