Continuing To Avoid Financials In The Current Environment

In bull markets, it’s good to see investors rotate in and out of different stocks. Some sectors establish themselves as market leaders for a while. As a rally progresses, you’ll begin to see profit taking on some of these names, prompting traders to look elsewhere for strong momentum moves. Of course, it’s a sign of a healthy rally when you see this “market of stocks” environment. It’s great for traders, too — mainly because there’s always a stock out there that’s in play or ready to make a big move.

By Roger Nusbaum: The other day I wrote about changes to the portfolio we've made over the last few months that had the goal of making the portfolio less defensive (selling an inverse index fund and buying two stocks and a narrow ETF).

By Interactive Brokers: XLF - Financial Select Sector SPDR ETF - US stocks are moving lower on Monday as European concerns creep back into the conversation, yet financial stocks are managing to hold onto slight gains this afternoon, with shares in the XLF up 0.06% at $15.84 as of 12:40 p.m. in New York.

Parsimony Investment Research submits:The Financials Select Sector SPDR (XLF) has underperformed the broader market (SPY) by 15% over the last 52 weeks. We think the market is telling us something about the near to medium term earnings growth prospects of the large U.S. banks.

Andrew Wilkinson submits: Red Hat, Inc. (RHT) – Shares of the software company are down 2.5% at $46.67 in the final hour of the trading session, but near-term options activity on the stock suggests investors are hoping for the stock to rally ahead of January expiration.

Roger Nusbaum submits: James Picerno explored an idea put forth by research at MSCI Barra about the role global benchmarks should play in portfolio construction by money managers and the extent to which more U.S.

By Roger Nusbaum: In the last few days I've made a couple of references to the 2012 Outlook article I've been working on for Seeking Alpha.

By Roger Nusbaum: What is the proper allocation to foreign markets? Within that decision is the question of how much should go into a single country. The catalyst for this post is the following comment I saw in an article deconstructing a thematic ETF: