The reason I didn't sell on Friday was because I thought maybe BAC could close around 29 from the stress test news. But when I woke up from a nap to see that we had closed at 28 I really didn't understand why. I know it was the last day of the quarter but why the push down so aggressively to 28? I have been doing some research this weekend, research that should have been done a long time ago but I was too young, lazy, immature, stupid, and conceited. But I have concluded that BAC has been wrecked by ETF trading. My plan now with my BAC shares is to hold and see how the market reacts this week. I do not want to sell my shares this low and I hope the market can somehow turn around. Seems like this tech war thing has gotten out of control. Trump really hasn't impressed me with his "deal making" skills. His negotiation skills aren't that good in my opinion. I
So I'm readings a section from one of cramers books (get rich carefully page 23). Cramer is the only one I slightly trust on CNBC. I don't listen to anyone else because they are all phony IMO. He talks about these ETF's and how a trader must learn to respect the power of them. He says that individual stocks are hostage to these ETF's even if they don't deserve to be. You like the banks? There's an ETF that mimics the banks. The Fed has blessed these individual ETF's and has approved these machine gun like instruments. The movement of the banks stocks is largely dictated by the ETF's that lord over them.
Big money definitely wins again. Institutional investors are using these ETF's because they are lazy and don't want to mess with getting in and out of individual stocks. They can also get 2 or 3 times the buying or shorting power over a sector with a leveraged ETF. That's crazy to me. All those rich guys that are supposed to be sophictated investors don't even want to bother doing research they just manipulate the XLF and are trading it in a channel right now. They probably are throwing Wolf of Wall Street type parties in their corner offices too in Manhattan .
As for the interest rates, I have no idea what will happen. The fed says they are raising rates but even if they do, will that result in a higher stock price for BAC? With the way things have been going I don't think it will. I think you will see people sell and go into lower yielding less risky bonds and the bears will say loan growth will be an issue.
