OUTLOOK

"Profiting from a Quick Rally in Banks"

11/14/2007

In our Outlook on 11/9/07, we stated, "We believe the KBW Bank Index, representative of bank stocks, is due for a rebound rally."  From its 52 week low of 90.03 reached on 11/8/07, we forecasted the KBW Bank Index to rally to 96 or more within 8 weeks.

Our forecast was correct.  The KBW Bank Index reached our target of 96 or more within 5 days, reaching as high as 100.93 on 11/14/07.  As of 11/14/07, we have taken profits on our bank stock positions.  If we see another buying opportunity in bank stocks, we will re-initiate long positions in the sector.

Mark Yuan, CFA