If you look at my recommendations this year, almost every single piece I have put out has been negative. This one will be no different as the market will head lower in order to price in a recession. The banks are one of the best industries to short because they were originally pricing in rate increases. Rate increases help the banks earn more money. Unfortunately the Fed has tightened too late in the business cycle, so it is boxed in a corner. I think the Fed will cut interest rates this year instead of raise them. A recession is also a negative for banks because their percentage of loan defaults will increase. I shorted Bank of America in particular because the chart looks awful. As you can see the stock has a high amount of resistance around the $19 level. The fact that this resistance has lasted almost 6 years is a testament to its strength. The stock has a moderate amount of support at both the $11 level and the $7 level and has a great amount of support at the $5 level. The stock will probably break through the first two levels of support because this decline is powerful. The decline is powerful because it is a reversal of the trend in response to the resistance it hit at $18. Again, when you add in the macro factors, it makes the stock a clear sell. It is a very strong signal to sell a stock when the fundamentals and the technicals are both negative. $BAC, Bank of America Corporation / 10080