Good morning to all. Tuesday is looking to be an interesting day in the markets as it looks to extend to its fifth day of gains. Retail sales, however, are the big ticket item this morning as well as a general overvaluation of many stocks that would tend to suggest some profit taking may be in order. Currently, we are in a Medium Term Short Sale of Lennar Corp. (LEN) and a Play of the Week in Savient Pharmaceuticals (SVNT). The FDA and Savient have not yet announced whether their drug Krystexxa has been approved or not, which will definitely move the stock.

Let’s get into some new plays for this morning…

 

Buy Pick of the Day: Direxion Daily Energy Bear ETF (ERY)

Analysis: The market is looking like it most likely will not be able to keep itself green today. Despite a solid report from the retail department, futures are already treading back into the red only twenty minutes after jumping into the green. Mostly, it appears that a lot of investors are just taking some gains off the table afraid that they may not get them later. With the loss of demand for buying, prices will decline in the short term. I would venture to guess that by midday, however, we are headed back upwards. One commodity that should see somewhat of a decline today is oil.

The oil market has been stuck in the 70s for quite some time, trading in a very tight range. The upward buffer appears to be around $78 while the lower is at $73. Oil moved close to $78 yesterday, but it appears to be on the way down today. A combination of weak economic data from Europe, mostly Germany, and a strengthening of the dollar are outweighing any supply issues from pipeline leaks, which may be priced into the oil price as of now.

“The economic conditions in the eurozone remain fragile, adding further pressure to the euro and thus to the U.S. dollar-dominated markets,” said a report from Sucden Financial Research in London.

With oil looking down, we can take advantage of this opportunity to buy a volatile inverse ETF that will increase with oil’s downward movement as well as the market as a whole. Direxion’s Daily Energy Bear ETF (ERY) is a great way to day trade the changes in oil direction. The ETF has been quite beaten up as of late. Dropping from the high…
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