Good morning Oxen Report readers. Yesterday, we had a great day in the market with a short on Soalrfun Power Holdings Inc. (SOLF). We were able to make a solid 3% on the day. We got into Solarfun at 5.90 and exited at 5.73. Like I supposed, as well, buying at 2:00 PM would have been a good idea for a Buy of the Day. At 2:00, the stock at 5.75 and ended at 5.83 for another 1.5% gain if you took the opportunity. Hope you were able to make some money with SOLF. I have two picks for today, let’s get into them.
Buy Pick of the Day: Ultrashort Proshares Real Estate (SRS)
Today’s market is looking like it will be starting another day in the red. The market got some weak news out of the housing sector, as housing starts came in at 530,000 for the month of October, which was 60,000 below September and 70,000 below October estimates. This figure shows the troubling reality that we are not out of the woods, and we have so far still to go. Further, the market got a profit drop from BJ’s Wholesale for Q3. CPI Index came in slightly better than expected, but I don’t see it as being a major market mover. I feel pretty confident in a lower to extended low open with futures dropping around 35 points at 8:30 AM. They have recovered somewhat, but the market is still down and in reaction mode.
With the news of housing starts being bad, it gets worse with the fact that building permits were down 30,000 below
estimates and 20,000 below September. In order to play the poor news, I think taking positions in SRS is a pretty strong idea. The ETF, however, is not getting much love in pre-market trading. It is up just 1% on the continued data we are getting that the housing industry continues to struggle.
In the past couple weeks, the stock has dropped around 15-16%. It is currently oversold, but it looks ready for a breakout near its lower bollinger band. The stock is well positioned to rally on the news if the market will help it somewhat. I think we have a similar set up to yesterday where we start down, move up, and then die off. One bit of worry I do have is that Pulte Homes did get a significant upgrade from Citi. Additionally,…
