When the cat is away, the mice will play! Today’s muted market gains on way lower-than-average volume suggest many bears have hit the road, thereby leaving the bulls to play. It is likely that today’s rally will extend to Friday, since Wall Street is all gung-ho about “Black Friday”. Nevertheless, up or down market action on Friday will be lackluster.
Profit takers must have taken exception to my extolment of ADBE’s virtues yesterday because they’re all over the stock today. ADBE is beat down 1.74%, thereby giving up over half of yesterday’s 3% gain. Bless the profit takers! I often like to see some consolidation after such run-ups; otherwise there’s always the danger that a stock will become overpriced.
There’s still a vacancy for a financial stock. I’m apt to avoid the big boys – Citigroup (C), JPMorgan Chase (JPM), and Bank of America (BAC) – because they're exposed to the vagaries of the yield curve through their commercial banking businesses. But if BAC snaps up Barclays PLC of the UK as rumored, I’d have to take a hard look at the stock.
Barclays is a British blue chip with many tentacles – Barclays Bank, Barclays Capital, and Barclays Global Investors to name a few – so a successful tie-up with BAC should lessen BAC’s overdependence on commercial banking. Perhaps more importantly, it will help BAC gain a foothold in Europe and Africa, where rival Citi has had successes. I’m watching the space.
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