Bigworld, Looking closer at the financial sector charts, the sector as a whole (XLF) doesn't look as overextended as GS and JPM.
After going more or less sideways for several years, XLF broke out above resistance at 20 and has quickly moved up to near 23. The chart looks like it could eventually settle in over time to trade in the 20-25 band. If it should continue zooming up in the near term to 25 without much of a pullback, that might be the time to consider a short, but not as a long term position but just as a shorter term swing trade. Depending on events, it's not inconceivable that the XLF might eventually work its way up to 30, which was the 2007 level.
Of course a lot can happen along the way so this is just a guess based on the charts. With Mnuchin as Sec of Treasury, and Trump's bankster friendly deregulation plans, the financial sector might stay in favor for some time.
Looking at the GS chart, it blew thru its 2015 high (~220) and looks headed toward its 2007 high of 250. The chart is looking spikey already, but if it should continue zooming up to reach 250 then the odds of a pullback would be high, and a short might be a decent bet as a swing trade. I'd be leery about a long term short though since with Trump we may be entering into a favorable longer term environment for the big banks.
Looking at the JPM chart, it's considerably different than GS in that it already exceeded its 2007 high back in 2013 and has been a lot steadier than GS. It's also spiked hard since the election and is getting vulnerable to a pullback, but if it would continue climbing to 90 (currently near 83) without a pullback then the odds of success going short in a swing trade would be pretty good.
Anyway, good luck with it. It all depends on events, but summarizing - if GS should continue zooming quickly to 250 and JPM to 90, that would stack the odds in your favor for shorting as a swing trade. However they'll probably have a pullback / consolidation before then, which will change the dynamics.
AI
