Oxen Group Trades
The Oxen Report: Jobless Claims and Trade Balance to Direct Market Movement
by David Ristau - December 10th, 2009 1:04 am
Hey all. I apologize for missing yesterday. We are back on today. Tuesday was a semi-okay day. We continued our short sale of AMD, which we got stopped out on for a 3% loss at 6.65. The stock just has had too much upward momentum, but I think it still looks to be a strong long term short if you are looking for any longer positions. Our Buy Pick of the Day was Ultrashort Proshares Financials (SKF), which we got into at 25.05 in the morning. The stock did not hit 25.55, our lower exit point. We sold at the end of the day at 25.37 for a 1.25% gain on the day. It was a .75/2 in my opinion.
Let’s get into our picks for Thursday…
Buy Pick of the Day: Direxion Daily Energy Bull ETF (ERX)
Analysis - Over the past few days, oil has been hit hard by the stronger dollar, dropping significantly in price. Today, however, it is the first time we are seeing the dollar starting to make a strong reversal and move back down. The market is reacting well, and futures are up at this point in time. The Dow as of 8:45 AM was up 54 points. The market is also rallying off a better than expected trade balance numbers. We had a large drop in the trade deficit, which is positive for the American economy, especially since analysts were expecting a rise in the deficit.
Oil, itself, got some great news yesterday, with crude inventories dropping 3 million barrels over the past week. This is a pretty significant number released by the EIA. Oil did not, however, rally on the news yesterday. With the combination of a weaker dollar and the inventories, we can expect oil to start to move back upwards. It has dropped much too fast. I think the drop was fundamentally sound, and oil is still overpriced. Yet, this market does not always work on the fundamentals.
If oil is going up and the market is going up, then Direxion Daily Energy Bull ETF (ERX) looks to be a solid place to play our hand. The ETF has dropped slightly over 20% in the past three weeks in value due to the lowering oil prices and an overpriced ETF. Now, however, the ETF is sitting at the very bottom of its stochastics, but they appear to be leveling out, showing a movement up from…
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The Oxen Report: Dollar Continues to Strengthen Among Bernanke’s Comments, Market Headed Lower?
by David Ristau - December 8th, 2009 9:09 am
Yesterday, we had one successful trade and one that we decided to continue to hold through today because there was no point in selling for such a huge loss close to 3%. Our Buy Pick of the Day, for yesterday, was Ultrashort Proshares Real Estate (SRS). We liked the stock due to what I thought was going to be a down day in the markets, but it turned out to be a great sector specific call. We got into SRS at 7.95, which was adjusted in our Morning Levels alert. We were looking for a 2-4% gain on the day with a range of 8.11 - 8.27. We were able to get all the way up to 8.27 for a 4% increase. On the Short Sale side, we liked Advanced Micro Devices Inc. because the stock appeared to be significantly overvalued and presented a great shorting opportunity. When the market did not tank, AMD was strongheaded. We got into it at 8.35, and we are still holding hoping to get out today.
Let’s get to today’s market…
Buy Pick of the Day: Ultrashort Proshares Financials ETF (SKF)
I don’t see how the market is going to rally today, but I do think it probably will get some movement upwards this morning because futures are drastically low, down 85 points on the Dow as of 8:50 AM. The markets, across the globe, were all down on the Bernanke commentary. The comments have led to a continued stronger dollar, which hurts the marketplace. Especially since I did not see much pricing in of these comments yesterday, I am in full belief that it has to happen at some point. On the rest of the market’s front, there is not much good news either. FedEx said it will top its previous guidance, but in the same breath, McDonald’s saw its November same-store sales drop from one year ago and 3M affirmed its guidance below estimates. Kroger missed on earnings, which is a sort of bellweather stock. Overall, the market is just not looking too spectacular this morning.
For this reason, I like Ultrashort Proshares Financials ETF (SKF). The ETF is a solid play today in much the same way SRS was yesterday. We have what appears to be a down market, and it will be hard to find stocks that can really rally much in this market today. Therefore, we want to look towards safer plays in a…
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The Oxen Report: Market Looking to Climate Change and Bernanke Speech for Direction
by David Ristau - December 7th, 2009 12:33 am
Good Monday! Hope everyone had a nice weekend. For a recap of last week’s 4/5 week, check out The Oxen Recap. The big winner of the week was Big Lots with a nearly 10% gain on the stock in Thursday’s Gamble of the Day. This week we are looking at a market that is a bit toppy and has a limited number of earnings and economic data points until the end of the week. That may mean the market is not going to have much to extend its rally on, and we should take an early bear position on the market.
Let’s get into Monday’s picks…
Buy Pick of the Day: Ultrashort Proshares Real Estate ETF (SRS)
Analysis: The market futures are all pointing down on this Monday morning as the dollar is rising and a lack of economic and company based news is causing a complete focus on the big story of the day…the Fed. Ben Bernanke, Chairman of the Federal Reserve, will be speaking with the Economic Club in Washington. There is speculation that he will unveil some insight or mention that the Fed will be raising their interest rates for the first time in almost a year. The speech comes at 12:45 PM, and the market may begin pricing in a stronger dollar up until that point, which is not good news for the market. As the market heads down, any number of your inverse plays, such as inverse ETFs, present viable options.
One that I like in particular is the Ultrashort Proshares Real Estate ETF (SRS). It is one of the most volatile ETFs out there, and it has been completely beaten down among an extended market rally. With things looking toppy, though, I would expect a large decline in the real estate sector, translating into a positive day for SRS. There is no market pertinent news for the real estate sector, so it will most likely be a market follower.
The fact that it is a market follower, in fact, may be a pretty good thing for today. The sector has not had significant pre-market movement like a lot of other stocks and sectors have already priced in. SRS is only up a bit over 0.50% on the morning, so we can get into it at a relatively cheap price with the upside being pretty extreme. The stock is right at its lower bollinger band, is undervalued on RSI, and…
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The Oxen Report: Recap of the Week, Portfolio Update
by David Ristau - December 6th, 2009 6:35 pm
Hey everyone. Well, the week was definitely interesting one for the market. We had some real home runs and one real dud in this week of The Oxen Report. Let’s take some time to review what we did this week and what we can expect from the market next week.
Winners of the Week:
1. Aeropostale Inc. (ARO) - Our Monday Buy Pick of the Day was a winner for us. On Monday, we recommended Aeropostale as a strong play because we were excited about the retail sector. On Monday, however, it was getting the kind of movement I thought it should get. Therefore, in my Midday Alert on Monday for Oxen Alert members, I recommended holding this one overnight into Tuesday. The hold worked brilliant. With an entry on Monday at 31.50, we were able to exit at 32.13 for a solid 2% gain.
2. Direxion Daily Energy Bear ETF (ERY) - Our Short Sale of the Day for Monday was also a quick winner. We saw that there was a big gain in oil and a weak dollar in Monday morning before the market opened. That meant there should be good movement in this 3x ETF to the downside, but it was not there. It created a great value play on some unpriced movement. We were right. Got in the morning at 11.85 and exited at 11.51 for the quick 3% gain.
3. Ultrashort Proshares Oil and Gas ETF (DUG) - On Wednesday, we continued a play on oil as we saw the inventories coming out worse than expected from the API. The market was also looking down, and it looked like a solid buy in the morning. We got in at 12.40, looking for a 12.65 - 12.78 exit. We did not hit our 2% range, but we still sold off at the end of the day for a gain at 12.55 for 1.25%.
4. Big Lots Inc. (BIG) - The Gamble of the Day on Thursday was in Big Lots Inc. (BIG). THIS WAS OUR BIG WINNER OF THE WEEK. We got into BIG on Thursday afternoon at 23.75. The stock we sold at 9:30 AM on Friday for the overnight gain after the company reported extremely solid earnings. We sold at 27.00. That was a gain of 9.5%. It was a solid play, and I hope you all benefitted from it. We may do more of these picks again. We have had some big winners!
Our Misses, Ouch:
1.…
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The Oxen Report: Employment Roundup to Direct Market on Friday
by David Ristau - December 4th, 2009 1:36 am
Hey everyone. Well, I hope you all could get involved in my Oxen Gamble of the Day on my Oxen Report for today. We recommended picking up a position in Big Lots Inc. (BIG). It seemed like a solid trade for overnight. We got in at 13.75, and we are already up over 3% in after hours trading. Hopefully, BIG can keep up the movement, and we can sell early for a nice gain.
For today, I am actually going to be traveling this morning, and I am posting now in order to get in a report, since I have been dragging my feet for all of you. I can’t update my post, and I will be gone by 7:30 AM, so the report will be based on what I can imagine happening and will give you some options.
Tomorrow is a big day because we get a revision in the unemployment numbers. It was released last month at 10.2%. The government will revise that number. If the numbers are bad, I think the market will tank severely. The news of bad unemployment from ADP that was released on Wednesday was never factored into the market, and it should compound on the of unemployment for tomorrow. If the news is good, however, I think we will see a good start that will dwindle to pretty neutral day in the markets.
So, if the numbers are revised up on unemployment or we see the market overwhelming looking down…what to do?
Short Sale: Marvell Technologies (MRVL)
Marvell released some pretty solid earnings in after hours. The company beat earnings estimates, reporting an EPS of 0.35 vs. the expected 0.27. The company, on top of this, is expecting revenue in Q4 around $850 million, well above expectations. The stock jumped 6% in after hours, and it should open with a pretty solid gain.
The issue, though, is if the market is pointing red. There is no way Marvell will be able to hold its gains. The stock was already pricing in a beat, moving up over 8% in the past three days. The stock is right at its upper bollinger, overbought on stochastics, and overvalued on RSI. It is red flagged for a pullback for sure. Great earnings but the market was expecting it.
We will want to get in right away and bask in the glory of this one coming down quickly.
This has nothing to do with the fundamentals…
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The Oxen Report: Gamble of the Day…Big Lots
by David Ristau - December 3rd, 2009 3:40 pm
Hey all.
I am doing this afternoon gamble of the day. This harks back to something I tried before, but it couldn’t be consistent enough. I found a gamble for overnight tonight that I am really fond of that I think you should definitely try out.
Gamble of the Day: Big Lots Inc. (BIG)
Discount stores have been doing exceptional this earnings season. Across the board, all the companies are beating expectations and doing well on hitting some solid growth. One company that is last to get into this earnings season is Big Lots. The company is a small-scale Wal-Mart that is bigger in volume and size than a Family Dollar or Dollar Tree. The company will be reporting earnings tomorrow morning, and I think we can expect a beat on the way. That will mean a solid gap up and gain moving into tomorrow. Why? Big Lots is extremely undervalued moving into the earnings reporting, and it has a ton of upside.
Why am I excited about this company’s earnings? Discount stores have all beaten. In October and November, out of the eight major discount retail/variety stores, such as Wal-Mart, Target, and Family Dollar, they have all beaten expectations. Not a single company hasn’t done better than what analysts were thinking. People are still buying, and these discount stores are taking flight still. Big Lots has seen exceptional earnings from one year ago. The company has beaten expectations consistently, and the company is looking at EPS estimate of 0.18. One year ago the company hit 0.15. The past quarter, however, the company hit an EPS of 0.35. Further, Big Lots has a lower P/E ratio than all its competitors. This means people are expecting less in earnings, and if the company beats, we can expect a more severe run up in price.
The company at the beginning of November, commented that they saw their Q3 same-store sales down 0.2%. From that moment, the stock has dropped as much as 10%. The stock has had a slight rebound with the market trading up, but it is down again today. The same-store sales would worry me, except for the fact that the company said sales as a whole were up almost 1% from one year ago. More sales, more $$$.
The technicals are the final key to this puzzle. The stock is very undervalued, has been oversold, and it is near its lower bollinger band. Everything is…
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The Oxen Report: Unemployment, Crude, and Fed Day to Move Markets
by David Ristau - December 1st, 2009 11:34 pm
Hey all. So, Monday turned out to be a pretty fantastic trading day for us. We had our Buy Pick of the Day as Aeropostale Inc. (ARO). At our Midday Message alert, I recommended holding this one overnight since we had not gotten the movement on our 31.50 buy price I had wanted to see. I was looking for an exit of 32.13 - 32.44. We got that range today and were able to exit at 32.13 for a 2% gain. Our Short Sale of the Day was a dandy. We shorted Direxion Daily Energy Bear ETF (ERY). We got into the ETF in the morning at 11.85 and covered at 11.51 just an hour or so into the day. A good 2/2 over the past two days. Wednesday looks to be interesting with unemployment numbers on their way.
Let’s see where we can make some money…
Buy Pick of the Day: Ultrashort Proshares Oil/Gas ETF (DUG)
Analysis: Oil prices look to be on their way down today. The American Petroleum Institute released news that crude supplies were up 2.9 million barrels over the past week, which was much higher than the 1.2 million drop that was expected by analysts. That is setting up crude to drop in price, moving into the crude inventories announcement at 10:30 AM from the Energy Information Administration. Things are not looking too great for crude today, yet DUG has not had the price fluctuation to reflect the oil inventory report.
"The API report suggests that there are still surprisingly high levels of U.S. inventories," said analysts at Sucden Research in London. "This, along with a forecast of mild temperatures in the U.S. for December, could push crude oil prices in a correction lower."
If this is the case, taking some positions in DUG is a must today. The stock is definitely undervalued as of now. Typically, moving into the inventory report, the market will play it one way or the other just before the report’s release. Today, I think we can expect the market to be moving down and expectations to be for higher inventories. The market, overall, is pretty neutral, but I am expecting it to lose some ground after the open. Unemployment numbers from ADP came in worse than expected with 169,000 non-farming employees losing their jobs in the month of November, worse than the 140,000 expected. It was an improvement from the month prior, which was above…
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The Oxen Report: Dubai Looks to Weigh on Open But Can Holiday Buzz Take Us Higher?
by David Ristau - November 30th, 2009 8:32 am
I feel a slight buzz in the air about the holidays lurking right now. The malls were busy to start the holiday shopping season and sales are up from one year ago. On recap, last week was definitely a tough week due to my illness, but I am back with full powers this week. Friday, we had one great pick and one horrible pick. On QLTI, we lost 3%. The stock did pretty much the exact opposite of what I expected and ended up, even with a almost 2% down day. We did, however, have good success with Fifth Third Bancorp’s short sale. We got in at 9.80, and we were able to sell it at 9.61 for a solid 2% gain right before the close of the day.
1/2 not too bad for having the flu. Let’s get into a 2/2 day.
Buy Pick of the Day: Aeropostale Inc. (ARO)
Analysis:
Retailers got some good news this morning on a number of fronts that I believe should help the market challenge the overhand on the Dubai market issues we saw Friday. ShopperTrak, which is a research firm on retail, said that they saw the after Thanksgiving season up 0.5% in sale totals from one year ago, according to initial data. The total was $10.66 billion. Online sales were up 11% from one year ago. Even with the encouraging news, the National Retail Federation is still expecting a 1% decline from one year ago in total sales.
Not all analysts were excited, as John Long from Kurt Salmon Associates commented, "Forget Black Friday for bricks and Cyber Monday for clicks — this year it’s all about making it easy for customers to satisfy their shopping fix … we’re still seeing cautious spending. The pie isn’t increasing whether you decide to buy in the stores or online."
Yet, some analysts this morning, including myself, are excited about these stocks. American Eagle received an upgrade from Lazard Capital Markets, and Abercrombie received an upgrade from FBR Capital. These two upgrades have helped to lift these stocks in the morning. Further, in after hours, we are getting an earnings report from Guess?. I think all of this is reason for retail to look towards a positive day, and it could even be the market leader.
Aeropostale is my pick of the day because it has gone under the radar and is undervalued, but it will definitely get some added attention…
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The Oxen Report: Hey Shorty! It’s Your Birthday!
by David Ristau - November 27th, 2009 8:56 am
Happy Thanksgiving to everyone! Hope you all had a nice feast and day of relaxation. My beloved Green Bay Packers took home a nice victory, so it was a good day. I am feeling much better, and I think today should be a good day for us in the market. The markets are looking very, very poor today, but I still think we can find some good places to throw our money. Let’s get into today’s picks and enjoy your leftovers!
Short Sale Pick of the Day #1: QLTI Inc. (QLTI)
Analysis: Today, I do not think that there is much of a great buy. I am sure stocks will move an upwards direction at some point, but everything is looking pretty bleak. It may be safer to go with a couple of short sales that we think can work. The market is looking down on news coming out of a Dubai investment company may default on over $60 billion in loans, which would affect a multitude of financial institutions and is a sign of the still never ending state of the current economy. Futures are down over 200 points for the Dow as of 8:30 AM, and I don’t see an end in sight. Crude dropped $4.00 this morning. Stocks across the board are in the red. It looks pretty bad out there…
One stock, however, that is in the green is QLT Inc. (QLTI), which is a pharmaceutical company that produces products for use in photodynamic therapy (PDT), using light-activated drugs to treat disease. The company has rose over 20% on Wednesday on news of a settlement that went in QLTI’s favor with a hospital. The stock is still in the green this morning despite the news and the quick fire sale I am expecting. Further, the stock got a small upgrade from RBC Capital Markets. This is also helping to spark some interest but do not be fooled.
With the stocks technicals going hay wire, QLTI hit a two-month high on Wednesday. Typically, when we see a 20% gain on one day, we can expect a solid retrenchment the next day. There are just way too many quick buyers and sellers on days like that. QLTI should be no different, and with the market ready to tank, we should expect this to move into the red pretty quickly. The stock’s technicals tell the story, further. The stock was already oversold going into…
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The Oxen Report: Monday Looks Higher, Will Home Sales Bring It Down?
by David Ristau - November 23rd, 2009 8:13 am
Hey Oxen Report readers. I apologize for missing Thursday and Friday. I am extremely ill with some kind of flu. It
hasn’t gone away completely, so my mind is a little coo-coo. We left off on last Wednesday with the Buy Pick of the Day as SRS. We got involved in the stock at 8.65, which was recommended as an adjusted entry price in my Oxen Alert Morning Level. From that entry, we were looking for an exit of 8.82. We did not hit that exit price on Wednesday, however, it was hit on Thursday and Friday. Our Short Sale of the Day was ERX, which we got into at 47.30. We were looking for an exit of 46.45 or lower. We never got quite that low, so towards the end of the day we sold it at 46.83 for a 1% gain. Not a great day but not too terrible either.
Let’s get into today’s picks…
Buy Pick of the Day: Proshares Ultra/Ultrashort Real Estate (URE/SRS)
Monday mornings are always a tough day to predict because of the weekend. Today, we have really high futures and some good earnings. Things look good overseas, and it seems like everything is setting up for a big rally day. There is one major economic data point that could squash those dreams or carry them to the promise land. That point would be the National Assc. of Realtors’ information on the number of existing homes sold in the month of October. The data will be key to housing, which has seen a number of misses in the past few releases. My inclination is to just say buy SRS again, but it has had such a run up the last two sessions that it is appearing a bit overvalued in the short term. What’s a person to do…
The market has URE opening up around 3% and SRS down around 3%. This is obviously not where we would want to buy URE, typically. The catch for today is that if the existing home sales are bad we want to buy SRS right away at any price we can get. For URE, we won’t want to buy it up unless the ETF has moved down going into the report, and we can get it for 2% on top of Friday’s close. The stock is already overvalued and overbought, so it won’t be able to gain much if it doesn’t come down…
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