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The Dow has plunged nearly 600 points before the Wednesday’s session as worries of another financial institution going under reignite. Credit Suisse (CS) is the next big bank in the crosshairs of the regulators as shares tank over 30% after a Saudi backer rules out further assistance for the bank.
This puts the financial sector back on our watchlist as the fear of contagion is now gripping the market yet again.
Financial Select Sector SPDR ETF (XLF)
So far, the XLF is down 3% in pre-market trading and continues to look weak. If this back also goes down, we expect not only the sector to get dragged down with it, but the overall market to take a hit as well.
One thing is for sure with all this financial debauchery, we are not quite out of the woods yet. For entry of a bearish trade, we would want to look for XLF to give us a good entry. Meaning, we would like to see some kind of relief bounce at some point to enter a…
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