Hello Oxen Report Readers,
I am running a bit short on time today, so we will only have one pick. Yesterday, we had a great day going 2/2. Our picks for yesterday was buying Ultrashort Proshares Financial ETF (SKF) and short selling Covidien Lrd. (COV). The Buy Pick of the Day worked out for us for 2%. In my Morning Levels Alert, I changed the entry on SKF to 22.20 – 2.30. We were able to get in at 22.20 and sell at 22.64 for 2%. COV was a 2% gain, as well. Good Day!
Let’s get into to today’s pick and watch out for an alert this afternoon with an OXEN OVERNIGHT TRADE!!!!
Buy Pick of the Day: Direxion Daily Financial Bull 3x ETF (FAS)
Analysis: I saw the unemployment numbers, and they were pretty poor. Another miss in unemployment has definitely made the market think it needs to sell off in pre-market. That trend, though, is not going to last. We had way too many really good earnings this morning. in fact, every financial institution reporting this morning beat expectations. The movement downward in futures has created a solid buying opportunity.
We saw beats from Goldman Sachs (8.20 vs 5.20 expected), Comerica (-0.41 vs. -0.49), Fifth Third Bancorp (-0.20 vs. -0.31), KeyCorp (-0.20 vs. -0.30), PNC Bank (0.90 vs. 0.80), and TCF Financial (0.15 vs 0.13). It was a good morning for financials, and they should be looking up. Most of these stocks are up over 3%. Yet, the market is trading down. That is just a discrepancy that will not work. Either these stocks are all great short sales or they are going to be market leaders. Well, since I am pretty much a firm believer that Goldman is just such a market leader…I am in the latter camp.
Goldman upped their salaries and bonuses 47% from one year ago. The company beat expectations by $3 per share, and they made almost $5 billion in profit. Yet, the stock is up only 0.5%. The stock didn’t run up into the earnings either. Unemployment numbers are powerful, but not this powerful. I think we have a case of just the market is not showing its true colors. I am expecting a turnaround of this thing soon out of the gate. If we can buy at the start, it will position us well.
Technicals on FAS are pretty much a wash, but it has room to grow.
Get in early, and get out!
Entry: We are looking for an entry of 82.85 – 82.95.
Exit: We are looking for an exit of 2-4%.
Stop Loss: 3% on bottom of entry.
Good Investing,
David Ristau
