Regional Banks get Taken Out

Investors shed shares of regional banks quickly and with intensity on a day that saw a record drop in the DOW Jones Industrial average of 780 points. Buyers of Put options stepped in just as strongly to purchase out of the money and in the money Puts in Sovereign Bancorp Inc. (SOV), National City Corporation (NCC), Regions Financial Corp. (RF), and Fifth Third Bancorp (FITB). All four banks significantly dropped in value placing into question their ability to survive for very much longer with or without a Federal bail out package.

International Game Technology (IGT)

The stock of International Game Technology has rallied 9% from its 52 week low struck on the 23^rd of September and presents a good opportunity to short the stock. The stock is rallying again today 4.75% on a Goldman Sachs Analyst opinion of increased sales in the next quarter.

Fundamentals

            The company fundamentals are not great which has caused the stock to fall 60% over the past 52 weeks to a low of $15.22 on September 23^rd. Sales are decreasing 3% for the year compared to their last fiscal year. And earnings are decreasing 15% from a year ago period. The stock pays out a 3.5% dividend which would be appealing if the stock ha

This developer, manufacturer, and seller of healthcare products nationally and internationally has held up well during the past six months of turbulence in the markets.

By Steve Patterson

Six Month High and a Channel

The six month chart shows some early weakness down to the low $50 area for Abbott Labs’ stocks but since May of 2008 the stock has rallied recently reaching a new six month high near $60. The current range is between $56.50 and $60 and a breakout in either direction would signal additional movement to the upside or the downside.

Commodities like Silver (AMEX:SLV), Gold (NYSEArca:GLD), Oil & Gas (AMEX:USO), and Industrial Metals all shot up swiftly on Monday as the dollar (AMEX: UUP) declined on the US Government’s plan to bail out financials from the sub-prime crisis.

On a day that saw two more Investment Banks in Goldman Sachs (GS) and Morgan Stanley (MS) drop down 25-45% each before rallying late to unchanged, five banks reached new 52 week highs.

The markets are deep into the red and deep into panic mode. If you followed the advice given here when the indexes gave sell signals back on the 4^th of September, you should be either out of the markets or slightly short of the markets and doing alright.

Shares of American International Group (NYSE:AIG) fell roughly 31% today as investors continue to worry about other financial institutions that might file for bankruptcy protection due to a lack of credit available in the market. Companies investors are worried most about include Lehman Brothers (NYSE:LEH), down 13.5%, which is shopping for a buyer this weekend, Washington Mutual (NYSE:WM), down 3.5%,  which has similar credit issues due to mortgages that it currently holds as Lehman and AIG, and Merrill Lynch (NYSE:MER), down 12.25%, for the same stated earlier reasons.

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Falling 16% today was Merrill Lynch & Co (MER) to a new 52 week low as investors drive the shares down on fear of yet another investment bank not being able to survive.

Corning Inc (NYSE:GLW) continues to slide reaching a new 52 week low today after being downgraded by RBC Capital Corp and cutting their third quarter outlook yesterday. But the current price/earnings ratio is too low for a company with the earnings and revenue growth displayed.

The NASDAQ Composite and the Russell 2000 have signaled a hold mid-week with the Dow Jones Industrials and the S&P 500 still long. This was anticipated on August 21^st as the indexes where not climbing but trading in a range and the news around the market was not bullish.