The Oxen Report: Opportunities Limited on a Neutral Wednesday

Yesterday was a pretty rough day for us. Both of our picks were pretty weak. The Buy Pick of the Day was the Direxion Oil Bear ETF (ERY). We got involved in the early going at 10.47 and saw it decline throughout the day. I said to sell at 10.22 in an alert towards the end of the day for a 2.4% loss. We could’ve held to the end of the day and only taken a small loss, but either way, it was a loser. Our Short Sale of the Day was about a 1% loser, as well. We got involved in Textron at 21.31, and we saw it bounce around all day, never making more than 1% for us. It ended the day in the green but in the red for us. We sold at 21.60 for 1.3% loss. 0/2 never makes me happy, but we have made some smart picks today that are cautious and careful. Our entry ranges are very specific, and I think we should be happy. We are dipping back into the oil market because I think it is ready to make a move. It might be the downside, however, it could be going a lot higher. Inventories will tell the tale…

Let’s get into the picks…

Buy Pick of the Day: Direxion Oil and Gas Bull/Bear 3x ETF (ERX/ERY)

Analysis: We have had some trouble to start this week with our bearish positions. Yesterday, in the late afternoon, I wrote a bit of a muse talking about how we need the fundamentals to be there to make these positions come true. So, today, I am following that advice. We are going to be extra careful and picky in getting into positions. We are going to the oil market again today, but we are only going to play it if one of two things happens.

At 10:30 AM, we will get the release of the crude oil inventories. This will decide how we will approach our Buy Pick of the Day. Crude inventories came out at 4.1 million. It did not have a major effect on the oil market. Two weeks in a row, though, of big increases, especially with the market as high flying as it has been will have an effect. Therefore, if inventories are above 4.1 million, then we will want to buy ERY right away.