Yesterday, a few minutes before closing bell, I bought a small position in XLF, the ETF that follows the financial sector, at $19.69. I had been watching it all day, and being near it's intraday low I figured it was the best time to snag it.

As one might expect, given all of the recent events that have happened on Wall Street and elsewhere in the financial world, XLF has been quite volatile the last several months. It's slightly less than 50% off its high of $36 and change in June 2007, and has consistently hit resistance against its 200-day moving average. See for yourself.

So why, you might ask, would a poor brother buy into the financial sector now? Simply put, I believe that congress is close to rescuing bailing out Wall Street. Now, we could niggle on all the particulars of the bill, but when it comes down to it, if congress passes this thing, I think financials will take off, at least in the short term.

As for the timing, word on the 'net is that Congress is likely to vote in the morning on the latest version of the bill. Given that it lost last time by only 19 votes, I think it's very likely that it will pass this time. I've heard and read several stories about various congresscritters being ready to change their nay votes to yeas.

Risks

Now, there are some risks here. Of course, the bill could not pass today, and we could be up for another big down day in the market generally, and the financial sector specifically. There's also the risk that even if the bill passes, investors may not like it or may not believe that it will ease woes for financial companies. For both of these reasons, I will be watching closely and setting a stop loss at 5% down from my buy price (near $18.70).

However, I think these risks are mitigated. Since Comrades Paulson and Bernanke announced that the economy would fail without a $700 billion bailout, the market has complied with their self-fulfilling prophecy. Now, I believe the market will react just as complicitly with the implied, fallacious corollary: That with the $700 billion bailout, the economy will prosper. I believe at this point that people will grasp at just about anything they can.

Also, with yesterday's decline in XLF, there is now some room to make a modest gain before it hits resistance again. It has 5-6% before it hits the 30-day moving average (DMA) and close to 21% before it hits the 200-day moving average. My goal is to earn somewhere between 5-10% on the trade; however, if it closes above it's 30 DMA today on decent volume, I may hold onto it a bit longer.

Happy hunting in this crazy market!