Visa has been in an incredible uptrend. I was way too early in calling it a stretched rubber band back in May. Now, to be fair, I was quite bullish on the credit card plays back in 2010 and 2011, as long-time readers will recall, namely DFS MA.
But the move in Visa has been legendary, a never-ending uptrend, as you can see on the monthly chart, below. Mind you, it still has not yet broken per se, despite today’s ugly spike down.
However, the point here is that the further out the rubber band gets stretched, the more violent and abrupt the snapback can be, like we are seeing today, with the potential for not much of a reprieve–It can change that quickly.
My other point is that regardless of the news today about the credit cards being affected materially or not, the market was probably looking for any old excuse at this point to snap it back, rather than a catalyst.
I still think AXP is a short setup in the space. And I would not buy this dip in Visa given the sudden disequilibrium.
More on the market in my video recap after the bell…
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Love the pictures, man. Don’t know how you find the time to pump out quality insight and find hilarious/on point/nice pictures to accompany it.
Thank you, Mister Jinx.