Hello Readers,
SOLF once again looks to have denied us glory in an Overnight Trade. We are just under even from our buy in yesterday, but it appears that we are going to take a small loss on this one. I apologize for the miss, and I will discuss it in more detail in a morning alert once the market opens. For now, though, we want to get out at the open and take our losses.
Let’s get into my Buy Pick of the Day…
Buy Pick of the Day: Ultra Proshares Financials (UYG)
Analysis: The market is looking pretty darn solid today. We saw unemployment rates come in lower than expected at 9.7%, which is not as amazing of a spectacle to the fact that non-farm payrolls came in 36K vs. the expected 55K. That is a huge miss, and it is a great sign that losses are slowly but surely coming to an end. The market is reacting in a positive way with futures over 50 point on the Dow. Yet, the gains are not too much where the market won’t have the ability to continue to rally. A lot of the market is starting to look toppy, which makes me semi-nervous, but I think the market has a lot of reason to soar today.
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I like the Ultra Proshares Financials ETF (UYG) as my play of the day. Going into the day, the ETF is only up 1.5% on a solid day, which means we can still get into it before it starts to run away from us. Further, I am expecting the market to continue this upward trend today. The world’s markets all traded up big today. The oil market is moving upwards. The futures are moving upwards. There is a general positive attitude across the market today…except for solar.
Why the financials? Honestly, I am looking for something a bit under the radar. The big news today is in the communications industry, solar, and jobs data. Financials are not too overvalued going into the day and present a solid intraday trade. There is not a whole lot of news out of the sector, which is not good or bad for us. This one is going to follow the market. Futures continue to strengthen, and this looks to be a solid day. UYG is a battering ram too. It moves up and up with consistency. So, that limits some risk.
Technically, ETFs are hard to gage, especially the Proshares. Though, UYG does appear somewhat overvalued in the short term. At the same time, the ETF is in a stupendous upward trend. It still has room on its upside as it continues to move upwards, and its steady growth appears more consistent and a sure thing than volatile. I think we have a nice safe play today to accompany the problems we have run into with solar.
Good luck today and enjoy your weekend!
Entry: We are looking to get involved in the 5.55 – 6.05 range.
Exit: We want to sell for a 2-3% gain.
Stop Loss: 3% on bottom.
Good Investing,
David Ristau
