Payne's picks: Banking on banks

"Changes in psyche driven by news and events, along with a fair amount of fear and greed, is the perfect backdrop for a market reversal," says Charles Payne, FOX Business news regular and editor of Wall Street Strategies.

"The inspiration for the latest volatility in equities came from Ambac (NYSE: ABK) which looked like it would be off as much as 10% instead had a monster gain, up more than 30%, on calming statements from management. Citigroup (NYSE: C) also made a strong statement concerning its financial position.

"Outside of these developments the most exciting niches of the market are those that have been hammered the most in late 2007 and thus far in 2008.

"Scuttlebutt says the President is willing to up the ante in his rescue package (in excess of $150.0 billion) and that has sent retail stocks surging. The emergency interest rate cut stoked demand for homebuilder stocks as well.

"The retailers and homebuilders have miles of room on the upside, but must first reverse horrid downtrends and get above the top of their respective channels. For the S&P Retail Index ($RLX) that means a close above 441.0

"Homebuilders have seen so many false alarms it's difficult to notice or care about periodic up sessions. However, considering the fantastic swings and pressure on the broad market today's strength stands out as more than an anomaly or fluke.

"I don't think the global economy is going to slow down as much as one could extrapolate from yesterday's overseas meltdown, but there are country-specific issues that could make individual international markets more volatile.

"There are a ton of stocks I think are screaming buys. For example, I like SunTrust Bank (NYSE: STI) among financial stocks as well as Lehman Brothers (NYSE: LEH)."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.