Financials: Is It Time To Buy Yet?

Wall Street may finally have something to celebrate during a 3-day weekend. The bleeding may be over in Financials. We’re not calling a bottom, but there are some reasons be optimistic about the markets.

When the President, the Tresury Secretary and the Fed weigh in on a problem, it’s worth noticing. That’s exactly what happened these past few days as Bear Stearns slid towards a fire-sale. You’ve heard it said before, the night is always darkest before the dawn. Have we seen the darkest hour? Is the bleeding done?

Dick Bove, Punk Ziegel & Co. analyst weighed in on the situation today. He’s convinced Financials will rebound in the near future. He went so far as to say…

“The last time an opportunity of this nature existed to buy bank stocks this cheap was in 1990. The next time will be in 20 years. This is a once in a generation opportunity.”

Bove spoke these welcome words as Financials ended the last 5 trading days up +10.6%. The chart above suggests a strong possibility Bove is correct. The failed breakout to the downside may indicate a double-bottom as well as a strong level of support in a market that desparately needs one. Either way, this week provided a clear contrast to last week’s negative sentiment.

Have a great weekend.