There are some impressive rebounds on bank stocks underway but the question I'm asking myself right now is: Is this smart or dumb money buying the dip?
Take Western Alliance Bankcorp, which looked like it was deep in a death spiral earlier today, down to a low of $7.46 from $75 last week.
As you can see, it's bounced 265%, which is a nice bit of business from the bottom.
However I'm told that this is more about rocket-ship emojis than smart banking analysts who are buying the dip, with the symbol all over message boards and whatnot. We all know that retail loves catching a falling knive and there's a large (too large) group of WallStreetBets types that loves to pile into near-bankrupt companies and squeeze shorts. So that might be the story here, which on the face of it is disheartening.
But maybe not.
What's different about this this rout is that it's all about about market psychology and a run on the banks. If shares of this company and other banks can stabilize -- for any reason-- then people will stop yanking out their deposits. So maybe the degens are ....saving the financial system?
God bless their hearts.
Once the selling stops in financials, all that will be left is to sift through the market and pick up the good deals. When a bank run ends, it ends.
