Is anyone else creeped out by the fact that financial stocks have failed to get in gear with the supposed bull market? We experienced this ominous divergence first-hand yesterday bottom-fishing in the shares of Wachovia [NYSE symbol: WB]. For the last couple of weeks, we've been expecting WB to fall to exactly 49.11, a Hidden Pivot support. However, a short squeeze intervened, testing our patience as it pushed the stock to 53.02 on July 13. We've been waiting ever since to get long at our price and were finally able to do so yesterday. However, Wachovia looked so dismal as to make us wonder whether we should be more careful about what we wish for. (Click on chart to enlarge) Actually, for Wachovia shareholders, the day didn't start out too badly. In the opening minutes of the session, WB gapped to a high at 50.44 that was 46 cents above Friday's settlement price. But the rally quickly faded, and the stock fell hard after DaBoyz finished raping those who had gotten long at the opening bell using market orders. For anyone who mistook the early action for real strength, the day could have been a disaster. By the final bell the stock had fallen $1.68 below the intraday peak and a whopping $3.74 below the equally spurious peak created by last Friday's gap-up opening. Wachovia: Trouble Ahead? Mind you, Wachovia is not among those companies whose Q2 numbers have disappointed the Street; in fact, profits reported on Friday were up by 24 percent. But forward-looking investors noticed not the scintillating performance of months past, but the problems likely to attend Wachovia's recently expanded mortgage portfolio as the housing market has continued to weaken. Similarly, the shares of Citi, no slouch in the lending department, disappointed yesterday, even though it too had
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