As I mentioned in Monday’s Weekly Update, higher interest rates would be a positive for financials, which is why they were stronger leading up the Federal Reserve policy statement. Even though yesterday’s statement was considered “dovish,” I did notice that rates moved higher and the dollar surged after the statement was released. This tells us that investors are at least thinking about pricing in a rate hike should we get a few strong economic reports. This week’s unemployment claims, for example, were much lower than expected.
In terms of trade opportunities, I was hoping for a pullback in financials for a chance to buy calls, but they never came back to us. It appears these stocks will continue to attract money flow and are being bid up. I’ll continue to watch for pullbacks and let you know if we get the right opportunity to safely enter a trade and help maximize our gains.