The stock market opened really high today due to the good unemployment claims number and the surprise decrease in oil inventories. Financials led the rally as a result as investors buy in to the news that the job market is getting better.
However, the market started dropping as traders started shorting materials stocks as they are not convinced that this brightening job market is real. Manufacturing sector is cooling down and that is real. This caused the entire market to drop.
I am shorting LVS as a means of selling the news. Macau reported an enormous climb in gaming revenues, allowing all gaming stocks to rise significantly.
However, LVS is at a 52 week high, and this is abnormal counting that the general market is falling. LVS has a significant presence in Las Vegas too which is slowly recovering, but this does not justify the huge multiples that LVS is trading at. Plus the premium that LVS has is just too much compared to WYNN which also has a significant presence in Macau, WYNN only lose out to LVS as it does not have a presence in Singapore.
If you had followed my cue to short FCX yesterday, you would have made some profits. I am cashing out more than 50% of this profit, holding a bit more to ride the falling market.
On the mid term, I will be looking to go long in this market. I want to buy BAC, WFC, JPM, AA, SNDK at cheap prices. Currently, they are not cheap.
I am also looking closely at MGM, X, CLF. All these stocks have something in common. They perform exceedingly well if the macro economy recovers.
Short term, the DOW will be down.
Happy trading.
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