This morning, the financial stocks are leading the major stock indexes higher. Many traders and investors are buying financial stocks on the anticipation that the European Central Bank (ECB) will cap rising debt yields. The problem with the financial stocks now is that the bulk of that news has already been factored in by the market. You see, someone always knows something before it happens.
The leading bank stocks have already traded higher into this news. J.P. Morgan Chase & Co (NYSE:JPM) is the leading financial stock in the world, this stock has already rallied since July 23, 2012 when the stock traded as low as $33.10 a share. Today, JPM stock is trading higher by $1.11 to $38.49 a share. Sure the stock may trade higher from here, however, the upside in this stock is limited at these levels. JPM stock has a major resistance level coming up around the $40.00 area which is a major gap fill from May 10, 2012.
Other leading financial stocks that are rallying higher today include Goldman Sachs Group Inc (NYSE:GS), Citigroup Inc (NYSE:C), and Deutsche Bank AG (NYSE:DB). All of these stocks have rallied higher since late July 2012. Coincidentally, that is the same time that the U.S. Dollar Index topped out. Yes, even the bank stocks trade inverse to the U.S. Dollar Index.