Seasonality Sell for $MS into May ($XLF, $KRE)

6 Mei 2020

There is the potential for a nice selloff in MS (and BAC) after busting a parallel channel. The banks have been hit during virus.

On May 4 we received a rare 2 million single block trade on MS, which we have splashed and are testing now. We are dropping below. This is a very bearish signal for me.

MAY 6 2020, 10:13 AM EDT

VOL (K) | PRICE ($) | 🔼
--------.-----------.----------
📈 MS
--------.--(MAY04)--.----------
2,000 | 37.62 | 💔 -0.65%

6 Mei 2020

Catatan

We are dropping below the block, now 0.6% below indicated by the snapshot report above.

6 Mei 2020

Catatan

MS (and other banks) typically have a selloff somewhere after the April FOMC and into May (sell in May). This shows a big drop in the next few days.

16 Mei 2020

Catatan

Barely missed the 38.2% retracement this week. Maybe this trade gets a second wind but it is that time of year where it will not be easy. Probably the best option would have been OTM credit call spreads sold.