Earning seasons has started! And so far hasn't been impressive, jobs are down and inflation become an issue in Europe, second largest market for C. High inflation=no money to borrow which is not a good scenario for banks. It's been more than 4 months since Vikram Pandit, new CEO for C, has taken over Mr. Prince and like presidents, CEOs have 90 days to demonstrate what is the plan they have to change the direction. Have you heard any exciting plans? Me neither. Finally, I heard the other day in Fast Money that C is getting their act together and whatever those guys say positive is my sell sign. This is my subjective/speculative view. Let's move to some technical analysis.

I like looking at the combination of VIX and SPY. The relation between them can tell you a lot about how volatility plays in the market. SPY shows me the direction of the market and VIX the volatility. We have seen this week a new re-test of the lowest VIX since last market panic back in March (the week BSC sold for $2 a share) VIX works opposite to SPY, low volatility=up-trending market. Unfortunately, the retest hasn't been successful and market conditions are not appropriate to retest the next stop which was recorded back in Dec 07. My assumption is we will continue looking at an up-trending of the volatility in the days to come which effectively, will result in downtrend in the broader market. Financials are very weak and the highest volatility the bigger impact in this sector.

Let's take a look a C in detail. I like testing 3 different scenarios: weekly, daily and hourly before jumping to play. Looking at the weekly view, we haven't see stochastic of more than 40 since April 07 which was coincidentally the 52 week high for C. We are again in the 40 area zone and I don't think conditions have improved for this bank or the broader market. Is true that we are in the lowest MACD point and you would expect some recovery from now but it is also true that it can always go low and there is no external indication that things are getting better, actually is the opposite. RSI has touched the 40 zone which has been the highest since April 07.

If you move to the daily chart, since mid March, volume has decreased and this stock has grow 15%, isn't that funny? MACD is here at the highest point, recovering in uptrend and has tested the highest level since Oct 08. Looking at stochastic we are in overbought area for the second time in less than 4 weeks. Last but not less important, the upper band of Bollinger has been touched but not been transpassed. I think it could go a little higher probably even retesting the 26/27 area if nothing new show up in the horizon. But that's why I like mid-term plays which give me some time value. I'm looking to hold for 2-3 weeks and then re-evaluate.

I hope I haven't bored you to tears. Have fun and good luck with your trades!