A sign on the door of Opportunity reads Push.
Anonymous
The financial sector has pulled back nicely during the market sell off in August, setting up a nice opportunity for the contrarian player. The masses are fixating on whether or not the Fed will raise interest rates by a minuscule 0.25%. While they fixate on this issue opportunity could be at hand;now might be the time to put some money into banks. One simple way to achieve this would be via KBW Nasdaq Bank Index (BKN).
A number of analysts are comparing the fact that Citibank and Deutsche bank are still trading well below their pre 2008 highs, as a sign that the markets are going to crash and burn. They are trading below their 2008 highs: that part is true. The same argument could have made for the NASDAQ, but it did eventually test its old highs even though it took a long time to do so. If you look at a long term chart from 1999 to present, the trend was generally up after the correction ended in 2003. Now you could have moaned and groaned as the NASDAQ trended higher, stating that this was not a valid rally as the index was trading well off its highs. Misery and loss of profit would have been your only rewards. Many stocks such as PCLN, AMZN, etc, raced to all-time new highs even when the NASDAQ was slowly meandering upwards to eventually challenge its all-time highs of 2000. The point we are trying to make is that naysayers will always find something to scream about. It does not mean that prudence is not warranted from time to time. It just means that you should never become one with fear. 
A look at the banking index shows that it is consolidating, and as long as it does not trade below 65.00 on a monthly basis, the outlook will remain bullish. There is overhead resistance at 74.50, and it will take a weekly close above this level to suggest a move to the 80 ranges is underway. If it is going to trade any higher, a monthly close above 81 will be required. If it achieves this, it will be on its way to put in a series of new highs..
