The time to buy is when there's blood in the streets. - Baron Rothschild

I came across a Bloomberg BusinessWeek article from June, 2012 discussing about finding hidden opportunities in Greece. Since the Greek equity market was decimated during the previous few years as a result of the Greek crisis and the ensuing recession, George Elliott of hedge fund Naftilia Asset Management seemed to believe that investing in Greek stocks was a wonderful investment opportunity. In fact, he raised $63 million from investors for his Greek Opportunity Fund which planned to invest in nothing but Greek stocks.

One of the best times to invest in stocks is at the depth of a crisis when investors' fear is at the highest peak. The following chart shows the performance of three benchmark indices from the lowest point attained during a crisis:

Click to enlarge

Source: A Hedge Fund Hunts for Greece's

By Alex Bryan

While U.S. banks have taken a beating over the past few years, they are now better capitalized, as a result of adopting more conservative lending standards. The housing market is also starting to show signs of life, which could strengthen banks’ profitability. Plenty of risks remain. Banks face an unfavorable interest-rate and regulatory environment that may preclude them from returning to their precrash levels of profitability. Yet, regional banks may offer investors the best way to take advantage of attractive valuations in the financial services industry.

Regional banks offer greater diversification benefits than do national banks because their performance is more closely attuned to the health of their local markets. SPDR S&P Regional Banking ETF (KRE) offers an equally weighted portfolio of 76 regional banks that provides pure exposure to this subsector of the financial services industry. KRE is an appropriate tactical satellite holding for investors who

1. The recent new-highs in important stock market indices suggest there is a good probability the bull market in stocks that began in 2009 is alive and well and headed higher.
2. Fed Chairman Ben Bernanke's announcement of an indefinite quantitative easing program reduces the odds of a serious recession in the U.S. to no more than 25%.

We realize this bullish stance doesn't seem possible in light of all of the uncertainties in the U.S. and around the world, but we have long observed that the markets have a habit of doing what you least expect. It is only after they have made their moves that the reasons become clearer. Let's take a quick look at the convergent indicators we believe are so important.

Standard & Poors 500 Large Cap Index

The first indicator is the S&P 500 itself. Above is a chart of the S&P Index over the last three