The major holdings here are mostly mega banks which have stayed relatively clear of the brunt of the subprime fall out so far plus they have the ability to absorb a lot more pain than those who make it a policy to be in subprime lending.  Mega institutions such as Goldman Sachs, Citigroup, JPM, etc comprise the majority of the holdings.  These are not bad companies to own.  The P/E ratio is about 12 as of Friday which is not a bad value.  Second, as shown on the chart above, the selling took this stock to near 52 week lows and it's absolutely killed the 3 sigma Bollinger Band which means it's screaming for a short term snap back.  Getting to own these quality companies in such technical deeply oversold territory is quite compelling.  They are on my watchlist.

 

While financials may be on my shopping list for this week depending on the action, there's another sector that's been badly beaten that I'm keeping my eye on.  Yes, the real estate market slowdown in the United States is still front page news and the homebuilder ETF (XHB) is making fresh 52-week lows.  They're not on my shopping list, but they're on my watchlist.  I'll be waiting for a couple of key things to happen.  First, some homebuilder needs to go bankrupt.  This will be a sign of the bottom.  Second, the home prices must start making gains again in the major markets that have been badly beaten.  This may not happen this year, but I think the worst of the housing market is probably close at hand and a turn around is going to be soon to follow.  We'll just have to wait and see.