Even Volcker likes CAD banks... Of course, he gave the speech below in Toronto, so maybe he was just being nice. http://ednews.org/articles/34263/1/VOLCKER-SPEECH-IN-CANADA/Page1.html
While Canadian banks are correlated to the movement of American financials, they do not move "in step" as you have suggested. While Canadian banks have been hit hard, they have not been hit NEARLY as hard as the American top financials. I see little downside risk at these levels, with large upside potential. To answer your question, I am buying at these levels with expectation of profit by 2010.
Unrelated to trade strategy, but more the business environment/fundamentals - I spoke with someone a few days ago at Scotia Capitals (BNS) derivatives dept. and they said they were thriving in this environment. They used to have to jump through hoops to get hedge-fund business for certain swap contract services since they're a Canadian bank (total return swaps in particular), but since none of the other banks have enough of the money needed to outlay for the hf's to enter these positions they've been cleaning up.
Yeah, sounds like a good plan. I meant that in general, CDN bank stocks swing in the same path as the XLF, but not in the magnitude of course. My point is that I'd be frustrated to get long into a CDN bank IF the U.S financials have more downside to come, they are good banks, but fear is fear. I wouldn't approach them as if they're decoupled. But anyway, that's all irrelevant in the long run, so good luck to you sir.
My personally biased against owning CM (CIBC), just don't like its track of records. Anyway, my favor are BNS and RY, both are very solid companies so far (don't know when they are going to blow up, lol).