Editor's Note: Below is a brief note written earlier today by Hedgeye CEO Keith McCullough. Our Financials analyst Jonathan Casteleyn will provide a deeper update this weekend.
I still don't like the Financials (XLF) so I get why they are down -2% YTD (vs TLT +5.5%). But I also get that there is a time to cover shorts when they are signaling immediate-term TRADE oversold.
Instead of buying the ETF, we'll opt for 3% of it, Goldman Sachs (GS), which continues to signal bullish on both our intermediate-term TREND duration and research.
Long-term, Jonathan Casteleyn likes Goldman Sachs, but in the short-term, he sees the upcoming GS quarter as follows:
The Q1 period is seasonally the best for FICC and intra-quarter commentary at several investment conferences lends confidence to a much better sequential print for fixed income trading from an abnormally low 4Q14 result.
GS Asset Management is also taking share and will contribute to an improved upcoming quarterly result.
Buy on red.