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Despite jitters in the market, strength in the banking sector trumped weakness elsewhere and pushed the S&P higher for the third straight day.
Traders on the floor suggested that gains were largely due to a growing belief that the government was about to unleash serious firepower in its attempts to put a floor under the housing market.According to those reports the White House has a massive refinancing plan in the works – to the tune of $1 trillion. However CNBC’s Diana Olick tells us, “I’ve just been been told by administration officials they are not considering a $1 trillion refinancing program.” She goes on to say, the idea wasn't even new; it’s been tossed around for 3 years.“But the market is ripe for this kind of rumor,” say the Fast Money traders in response to the developments.
The sector has been so weak, investors want to be believe that the tide has started to turn - and they want to get in, ahead of what could be a massive rally. Even market rumors are enough to trigger buying.
“The Street is very willing to believe it,” adds Jon Najarian. “Options action in Bank of America,” have been very bullish.
Does that mean bank stocks are on the brink of a sell-off? Not necessarily.
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