After yesterday’s move and a strong performance overseas, it appears as though the bank rally will continue. Citigroup (C) shares are popping in early action, gaining about 20% to $1.74. GE, meanwhile, has hit $9 again pre-market.
We wouldn’t be surprised if this bank rally has some legs. Bottom line is that all the bank stocks have basically become options, where it’s free to speculate on the long side, given that the distance to zero is so short. If any of them show a hint that equity could once again be on scale with the size of their balance sheets, then the upside is huge.
Plus, you figure in the short term there are plenty of long-profitable shorts that need to close out.