SPDR S&P Regional Banking ETF (KRE-N)

Shorting this, as it has such significant commercial real estate holdings.

It's time to look at US regional banks, because they're well-positioned for the next few years.

Regional banks are unfairly discounted. There has been a big sell-off in a sector that people will be re-evaluating and maybe consider buying. There is lots of consolidation at the $43 to $44 level. It has a solid base at $40 and should trade up to $50 depending on interest rates declining.

No one said buy the regional banks before they reported, but KRE has jumped 16.5% so far this month, including 7.5% last week. Many regional banks reported excellent quarters. Also, there hasn't been another regional bank failure since the spring.

He's not surprised by the outflows from tech, which has been defensive this year. If Delta continues to slow and accomodative policy continues, investors will look at other places in the market for returns. KRE was below market weight. He trimmed his holding in June and jusT added to it. Cyclicals are up; financials have been flat this month, though up this past week. He likes regional banks; there's a return to loan demand.

Financials have been slower to recover, only gaining strength in September-October. Still have a long way to go. If you believe we had a generational low in long-term interest rates, and we're just entering a reflationary cycle, insurance companies benefit as assets go up in price. Higher rates are really good. Also interesting are KIE and KBE. Most interesting is IAI, making new highs. As a group, financials have underperformed since 2007, so they should now have a tailwind in this environment.