The financial stocks are still capable of having sharp down moves intraday circa 2008 and early 2009. We saw this when Meredith Whitney lowered GS estimates intraday on Tuesday and we saw it again today when federal regulators reminded banks to protect against a future rise in interest rates.

But on both occasions the “news” was shaken off and the affected stocks traded higher. One of our traders was a beneficiary of the interest rate “chirp” today as he was short the FAS when it hit the wires. Another one of our more experienced traders said that he was irked by the down move and that he was not interested in getting long FAS. I reminded him of the current market environment.

We are in an uptrending market. There are tons of people looking to buy on any type of unusual dip. Whether it is a market dip or a dip in an individual stock. If you review our SMB Morning Rundown blog you will see that almost every time the market touches a multi-day support level that we have highlighted the market rallies. This is not rocket science.

When you see a GS drop two points suddenly after it has been trending steadily higher your first instinct should always be to find out if there is any real breaking news. But if there is not then you should be looking for information on the tape to get long. You should be checking your charts to see if it is near an important technical level. Because the odds are that it will bounce. This is the complete opposite of my mindset from 12 months ago. And that is because the market has changed…

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