In a strange twist of fate, some of the big bank stocks are ripping. Much to the “bank bears” chagrin, [[WFC]] started this whole fiasco yesterday by reporting better than expected earnings.

“Where there’s smoke, there’s fire”, my late grandpappy used to say, God rest his soul.

This morning, [[JPM]] is ripping because they beat profit estimates. They said profit fell 53 percent, a smaller drop than analysts estimated, on mortgage-related writedowns and costs from the takeover of Bear Stearns Cos.

May we expect more of these kind of surprises?

In “sympathy” other names like [[BAC]] and [[WB]] are rallying. However, this run up isn’t getting a whole lot of endorsement by traders of [[WFC]], [[USB]], and [[NTRS]], so be ready for some late day shenanigans by the bank bears.

As I had alluded to in a previous post, we could possibly see regional banks have a nice pop of 20% - 30% during the Q2 earnings reporting season. If they are so inclined to play with flaming balls of fun, contrarians may want to investigate some of the worst, tired and poor names that have been beaten and bombed, of late.

What to do with the [[RKH]] that I bought yesterday at $80.92 ? That is the question. When I look at the “tic tac toe” chart, I see a possibility that it could sashay to over $100 based on continuing surprises by its components and banks, in general.

If it breaks $106, the downtrend will be reversed, as it will breakthrough the bearish resistance line (red). So I will continue to hold it for now, letting the profit build to a creszendo and then (hopefully) adeptly sell it and go out an eat a buffalo ribeye.

However, a one point this morning it was up over twenty-two handles since the close on Tuesday, so I may be inclined to sell it today—-very soon.

Keep your eye peeled to this development.

Finally, we may be seeing all the cluster-facking by the banks come to a head in the residential mortgage bidness, with the backstopping of [[FNM]] and [[FRE]]. Is the worst behind us?

I still don’t think so.

Disclaimer: I don’t know your sitrep, so don’t take this as investment advice. Trade at your own risk.