S&Ls are textbook plays. They always perform to the textbook. That means you buy them when the Fed is about to ease and you sell them when the Fed is done easing, because, when it is done easing, you are close to tightening. You short them when you are on the verge of a tightening.
The savings and loans were rocked for losses last week, and it was a clarion call that the move is done, over, kaput in this best-performing group. Yesterday we had a countertrend rally back to higher levels, something that I think will continue with the futures ramping today.
I would use the strength to sell this group. I feel strongly that you have to anticipate that last Fed ease and start scaling out now. If I owned Golden West (GDW) or Golden State (GSB - Get Report) or Staten Island Bank (SIB), I would let some stock go, right now, and keep selling until the position vanishes on the next Fed ease.I own none of these stocks. I can't short. I am just calling them as I see them, and as I would have called them if I owned this group. Random musings: Now you are talking. We are getting some terrific calls, and I need more of them! 1-800-862-8686, and I don't wear pom-poms on the show!