Financials: Do or Die?

3/24 - "One of my smartest hedgie contacts just pinged me about the financials. According to him it seems to be getting pretty close to do or die for them:"

"Bottom line: while there are reasons to be less negative, the issues cited above suggest it's too early to put on a big upside bet in financials on a one- to two-quarter view, especially considering the 16% move we've already seen off the bottom. Expect continued volatility, although probably less than we've seen the past couple of quarters, with a decent likelihood of a near-term retrenchment after the big moves of the past few days even if we don't necessarily revisit the March 17th low on S&P 500 Financials."

"A couple of names on the long side that seem well suited to the current environment: SCHW and GFIG, both of which have the potential to deliver stronger than expected earnings, have very limited exposure to current problem areas and have lagged recently in share price terms. Names that look vulnerable on the downside: FHN, WFC and JPM, all of which have rallied sharply and valuations look extended versus the earnings outlook."