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The Oxen Report: Jobless Claims Drop Only Slightly and Miss Estimates, Will It Weigh on Market?

Yesterday, we got into an Overnight Trade of the Day in New York & Co. (NWY) at 4.34. We are looking to sell this Trade right away this morning within minutes of opening. The company reported an EPS right in line with what analysts had been expecting, which was not exactly what I had expected. What is good news, though, is that headlines are playing up that NWY swung to a Q4 profit. Swinging to a profit is a very lucrative term, so we should be in business. The stock is not traded pre-market, so I have no idea where the market wants to take this, but I am thinking we should make some good money off the start of the day. 

For today, I am looking at a perfect short sale for a market that may be ready for a bit of a pullback.

Short Sale of the Day: Steinmart Inc. (SMRT)

Analysis: Today, the market should be in store for a pullback. We have a number of indicators that have come out and are buzzing around that are not too great fundamentally for the market. First off, unemployment claims. While the number has decreased week-over-week for three straight weeks, unemployment claims missed target estimates by 2,000 and are still very high – only declining 5,000 from last week and sitting at 457,000. The chart below explains the dismal employment state further. 

 

Advance

 

 

 

Prior1

WEEK ENDING

March 13

March 6

Change

Feb. 27

Year

 

Initial Claims (SA)

457,000

462,000

-5,000

468,000

644,000

Initial Claims (NSA)

432,166

460,249

-28,083

471,256

601,163

4-Wk Moving Average (SA)

471,250

475,500

-4,250

470,500

650,000

 

 Another issue the market is facing going into today is renewed issues with Greek debt. The country has once again commented on the need for more international assistance to help them with debt issues. Many European markets were down or are trading with very slight gains as a result of this news. Futures are up going into the day, but once some market buzz at the beginning of the day dies off, initial claims and a very toppy market should weigh on stocks.

In case it does not, however, I have selected a short sale that should do well either way. Steinmart, this morning, continued the retail trend with some really sexy earnings. The company reported an EPS beat 0.19 vs. 0.17 and beat revenue estimates by over 1%. The earnings, however, were not exceptional, and the stock is up over 7% in pre-market trading. Revenue was down 6% year-over-year.

The stock has moved up way too much on these earnings and even more so when looking at the technicals on short term. The stock was majorly overbought going into earnings, and the stock had priced in earnings, increasing 25% in two weeks. SMRT was right at its upper bollinger band, and the 7% increase has skyrocketed the stock. Now, it is in the middle of a breakout with expanding bands, but it really cannot maintain that sort of gains. Profit taking is going to occur. 

I have adjusted earnings to allow for even more gains, especially since futures are up slightly. I think this one will get a small pop and die off.

Entry: We are looking for an entry at 10.35 – 10.45.

Exit: We are looking to cover for a 2-3% gain.

Stop Buy: 3% on top of entry.

 

Good Investing,

David Ristau


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  1. David Ristau

    Hey all,

    Sorry this came out so late. I published back at like 9 AM. There was some glitch in the system or something. I am not exactly sure, but you can still play SMRT as of now. It has not reached my range.

    I am thinking we should readjust it down to 10.20 – 10.30.

  2. David Ristau

    Oxen Alert – Position Update

    (This is a preview of an Oxen Alert that Oxen Alert members receive. Find out how you can become one.)

    NWY – We were able to exit NWY this morning for a solid gain of 3%, getting out at 4.46 to start the day with a buy in at 4.34. I will take a nice 3% gain whenever I can get it. Good trade.

    SMRT – We are looking to get involved from 10.20 – 10.30. Stock came up to 10.18 and just missed our adjusted range. I am hoping we did not miss the boat, and we will hopefully get into our range here.

    Good Investing!

  3. David Ristau
    Oxen Alert – Position Update
     
    NWY – We were able to exit NWY this morning for a solid gain of 3%, getting out at 4.46 to start the day with a buy in at 4.34. I will take a nice 3% gain whenever I can get it. Good trade.
     
    SMRT – We are looking to get involved from 10.20 – 10.30. Stock came up to 10.18 and just missed our adjusted range. I am hoping we did not miss the boat, and we will hopefully get into our range here.
     
    Good Investing!
  4. fuzz

    NWY. Sold 70% at the open @4.47 (learned a hard way not to be greedy there) and then the rest at 4.73 later on. Good enough for me. Thanks a lot David.

  5. David Ristau

    Fuzz -

    Awesome that it worked out for you, and you made a good chunk of money still. Just imagine if the market had done the reverse and it went 4.47 to 4.15. You would have felt pretty great about your gains. Got to harness that greed.

  6. David Ristau

    Oxen Alert – Midday Message

    NWY – Well, this one has shot up for a solid 8% on the day. We got out in the early going, however, for a solid 3% gain. Better safe than sorry. One way you could have played this if you wanted to maybe take some more risk would be to sell 3/4 of your shares off the bat. Then, at another level, sell the last 25%. Either way it was a good play.

    SMRT – I got into this one at 10.35 and was really close to being stopped out. Unfortunately, we didn’t keep that higher range. We would be in the green now. We are about 0.5% down. The market is tanking, though, and the lunch hour and March Madness distraction should be weighing on the market. I think we are good to hold.

    Position: Hold

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