My reasoning for this play -
- Stocks rose big today, despite bad news for financials in that lending rates are rising, this suggests a downward correction in the near future.
- Financials are sheltered by the current ban on short selling. When this ban is lifted, presumably at the end of the week, financials should fall due to the reintroduction of a downward correcting force.
- While a bailout may well be passed by the end of the week, the market largely factored in a bailout today. Also, for a bailout to pass, it will need to be less favorable for financials than the one that was voted on yesterday.
- On Friday, a myriad of bad economic news will be released. The first target for this bad news will be financials.