The latest, but certainly not the last, banking casualty: After Friday's close: "First Republic most likely headed for FDIC receivership - CNBC "Shares collapsed to a $1 handle in the after hours trading, down 70% on the day.. "FRC was trading at $120 at the start of March... and now it's trading close to $1.20..." That's a decline of 99% for the month of April. Next best question: Who/What's next? Below are a few ideas that share FRC year-to-date price pattern. Add that to rising interest rates and plummeting commercial real estate values and the global financial crisis that was thought to have ended relatively peacefully with the "rescue" of Credit Suisse may come knocking on the market's door in the week ahead. PACW ZION WFC SCHW KRE XLF Allan's Analysis One or more of these stocks could be in line for a similar fate as FRC, the biggest unknown is when and which one(s), if not all of the above. Two months ago with central banks swooping in to save Credit Suisse, FRC was trading at the lofty, "What me worry" level of $120. As of Friday evening, it's sitting at a buck a share, and likely it's high for the foreseeable future...if any. The financial banking crisis is clearly not over, it's rolling ahead on real time, and may be presenting us with a potential option trade of the year. All be had to do is guess right. But insofar as SCHW and WFC are already picks (PRO/Premium respectively) it may be the safer bet to go with XLF, the Financial Sector SPYDR, effectively spreading out the bet across an entire basket of financial stocks. The July 22nd $33P (1.00-1.15) will go up 10X on just 33% drop in the sector by July expiration. Crisis enough for highly leveraged bet. Bottom Line: As of this writing on Saturday afternoon the fate of FRC is bleak, but not official. The entire sector might shrug it off come Monday morning, or, a new financial crisis is about to erupt. If the latter, at a minimum we will be adding the July 22nd XLF $33P this coming week. "It ain't over, till it's over." - Y. Berra TSLA The TSLA stochastic needs to move up out of oversold to generate a high confidence signal. That will take a few more up days, without intervening weakness. That is the pattern that generates good signals. Another dip now just makes the ensuing Buy stronger, so either way, a powerful TSLA Buy is coming, just not yet.
