Stress Test Results
It was announced today that the results of the bank stress test will be released on May 7th. Which might be a good thing for investors and traders who are looking at some more gains this week. The stock markets have been relatively flat today on light volume.
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I’ve been holding on to some of the positions waiting for some sort of sign of a pull back to come. With the news of the stress test coming out on Monday, I was planning to sell out of the remaining positions today, but with the news being pushed back three days, I just might wait till Tuesday.
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One company I’m looking to jump out of is Kinder Morgan Energy Partners (NYSE:KMP). The stock has jumped over 15% the beginning of March. Why I’m waiting to exit the stock is because of the 10% yield I will receive on the dividend. The ex-date is today at the close of the trading day. I feel that it’s been stuck at a resistance level and has stalled. I’m up nicely and will get back in when the markets pull back, taking KMP’s price down along with it.
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I feel that the stress test are going to be negative for the nineteen banks, why else would they delay the results. Of course we should have known they would be for the simple fact of the guidelines put in place by the government. The banks won’t be allowed to count the preferred assets to the bottom line. Without those assets counted, the government will claim that the banks are not well capitalized. If they are considered not well capitalized, the government will not allow them to give back the bailout money, letting the government have some say in what they banks policies and procedures are.
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Keep in mind that the markets have moved up well over 20% in the last two months. We are not out of the woods yet when it comes to the economy. So be prepared for a healthy pull back in the indicies.
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Have a great weekend and happy trading.
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