Bought CALLS on CAD Bank ETF (XFN.to) this AM

Market seems to be saying "if US banks are good CAD banks are better"... This looks to become the outperforming sector on the TSX over the next couple of days... I'm hoping that the bounce is representing a move into an MT trend but of course that will take some time to decide... The thesis is solid and I think that approaching new highs we have a good risk reward options trade here with my stop put down at around 23.75... Should mention I have the May st-24 calls too, filled at .34... souelle

Edited by souelle6, 15 April 2010 - 01:08 PM.

I have been asked myself why this was a sell way before XLF could confirm a real turn-down few weeks ago. Used to be pretty much move in tandem before, but not this time. Who is the leader between the two? Sure looks like XLF is doing the refuse to go down this time.

http://stockcharts.c...67143&r=433.png
http://stockcharts.c...867191&r=97.png

I have to wonder that myself... I have been surprised by the strength in the XLF... Short term fundamentally I think it must have to do with expectations of the interest rate environment in the US maintaining beyond that in Canada... Nonetheless I think we'll have at least another period with a favorable interest rate environment for the banks in Canada... Outside of rates I have to believe in the Canadian bank fundamentals given the deals which will be coming up in the Commodities sector... The real ETF to go after is ZEB, the CAD insurers are really sucking wind... Unfortunately on the ZEB the volumes aren't there yet and there aren't any options as of yet... I think there is a good argument for the XFNs making up some ground here... They're ahead on the 2 year, lagging on the 1... My assessment of US Banks good CADs better has to do with just how much they've exploded since JPM numbers... souelle

Just for the fun of it, a near term base looks to be building on FAZ. Again...just for the fun of it...not a recommendation. Fib

Just for the fun of it, a near term base looks to be building on FAZ.

A very near term I say. See them also in FAS, XLF, BKX, and C! a two day H&S forming right now.