The dow has broken its support today due to weak economic indicators.
Unemployment claims continue to stay at high level of 460-490k.
Economists were expecting claims to drop to the 400-450k region, which led to the november rally.
Tomorrow’s Unemployment rate and Non Farm Payroll will determine the stage for February’s trading plan. If Non-Farm Payroll shows a positive gain of 20,000 jobs, this will signal a bull rally. Hopefully, unemployment rate would show a drop to 9.8% but that is highly unlikely as predicted by Wall Street. However, this DIP is a huge buy opportunity. So once the dust has settled, start loading up on the recovery stocks such as the METALS which have dropped significantly (30%).
Good names include:
Alcoa Inc. AA
AK Steel Holding Corporation AKS
Freeport-McMoRan Copper & Gold Inc. FCX
Financials are also deeply oversold and undervalued.
Bank of America Corp seems to be the best bet, it is trading below its offering price of $15, and is trading at only 1.25X book value.
Speculative plays include Las Vegas Sands Corp LVS.
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