This photo of the XLF man being chased by the regulation bear was taken late yesterday, around the time that Reuters reported that Volker will have a special meeting next week to discuss the banks. It won’t be a dovish meeting in my opinion, as this was his idea in the first place.
The financials got hit with a sell off when the news broke, the XLF closed on the lows and GS looked ready to implode. Regarding GS, the headline risk is getting like a wet blanket over the name and investors would rather wait and buy it on the way up than keep more money at risk.
European markets snapped a 4 session losing streak on Tuesday but look ready to fall off the wagon once again. Markets opened to the downside and ex-DAX, have made little attempt to rally through the session. Negative sentiment followed a disappointing US close in which markets gave back gains and further downward rotation in Asia. Asian themes continue along the same tightening/lending macro path with the Shanghai Composite giving back the 3,000 handle for the first time since Nov 2, 2009. On this trading, European banks continue to take it on the chin and rotate lower.