Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Are The Financials Sending Us A Major Warning Signal?

by April 14, 2024
April 14, 2024
Are The Financials Sending Us A Major Warning Signal?

I’ve said for awhile that we could use some short-term selling to unwind overbought conditions and even negative divergences in some cases. I was looking for perhaps 4-5%, but it’s really difficult to predict the kind and depth of selling that we’ll see when secular bull markets face a downturn. Personally, I’d be shocked if this recent weakness morphs into a bear market. I’m not saying that it’s not possible, but my key signals suggest it’s very, very unlikely.

We’ve seen some downside moves in the past of just 1-2% and others, like the correction last summer, that stretched to 10%. I believe earnings will be strong, but the huge move off the October 2023 low may have built in that positive news. You’ve probably heard that old Wall Street adage, “buy on rumor, sell on news”, right? Well, that’s exactly what we saw Friday, with respect to the major financials that reported quarterly results Friday morning. The earnings numbers looked pretty good on Zacks:

Reported EPS was significantly higher than estimates in every case. Citigroup (C), in particular, crushed estimates, blowing them away by nearly 40%. There were revenue beats by all 6 companies as well:

Again, it was C that posted the best revenue beat – nearly 4% higher than expectations. From these tremendous numbers, it’s easy to NOW see why financials had performed so well.

But one thing that confuses many retail traders is that strong results do not always translate into higher stock prices. Check out the quarterly earnings price reactions on these 6 stocks:

Is this type of market reaction justified after seeing those quarterly results? I don’t think so, but the stock market doesn’t care what I think. Market makers have a job to do – build positions for their institutional clients at our expense. The short-term is NOT efficient. Prices don’t do what you think they’ll do. Then you get confused, believing financial stocks are dead. After they drop for awhile, you panic and sell and, after market makers get all the shares they need, financials regain their strength. This is what the stock market does. The short-term inefficiencies wear on traders, causing them to give up, and that creates supply for market makers to build their inventory. Then rinse and repeat. As the late great Yogi Berra would say, “it’s deja vu all over again!”

I discussed why we can’t trust this selling in my latest EB Weekly Market Recap VIDEO, “Hot CPI Stokes Inflation Fears”. The secular bull market remains perfectly intact. Check it out and leave me a comment. Also, please “LIKE” the video and “SUBSCRIBE” to our YouTube channel, if you haven’t already. It’ll help us build our YouTube community and I would certainly appreciate it.

On Monday, April 15th, I’ll be providing another financial stock that is poised to report excellent quarterly results. This company has been a huge leader among its peers, suggesting a blowout report ahead. If financials reverse their current weakness, I would not be surprised to see a very POSITIVE market reaction to this company’s report. To receive this company and check out its chart, simply CLICK HERE to subscribe to our FREE EB Digest newsletter. There is no credit card required to join the EB Digest, just your name and email address!

Happy trading!

Tom

0
FacebookTwitterGoogle +Pinterest
previous post
Hunt Slams Thames Water’s Bid for Higher Bills Amid Failures
next post
Expert warns of ‘chilling reality’ TikTok threat poses: ‘China’s greatest asymmetric advantage’

You may also like

Bad News for Buyers Weighing Hefty Mortgage Rates

October 30, 2023

Charting the S&P 1500 Zweig Breadth Thrust –...

November 18, 2023

Stocks Selloff into Close After Failing at Resistance

August 9, 2023

Investors on the Move: A Visual Guide to...

April 11, 2025

Finance, Family, Society: Finding a Good Balance

March 8, 2023

The Bullish Case for Gold

February 18, 2023

Three Signs of the Bear and What May...

February 19, 2025

Market Foundation Showing CRACKS!

July 9, 2024

Week Ahead: NIFTY Tests Crucial Support; Violation Of...

February 15, 2025

Find Trades Using These POWERFUL MACD Combinations

July 17, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • HMRC inheritance tax investigations surge 37% as treasury seeks to plug revenue gap

      June 9, 2025
    • Believ secures £300m to roll out 30,000 public EV charge points across the UK

      June 9, 2025
    • US and China hold London talks to ease trade war tensions

      June 9, 2025
    • British fathers urged to join landmark ‘dad strike’ over poor paternity leave

      June 9, 2025
    • IVF parents should have right to paid fertility leave, says GMB union

      June 9, 2025
    • Reform UK clashes with Bank of England over interest payments to lenders

      June 9, 2025

    Categories

    • Business (8,158)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved