I joked around inside Exodus today saying that $FAZ has the best chart in the whole market, a bull flag. For those unfamiliar with $FAZ, it is the inverse ETF that tracks the financials, and gives you 3X leverage on downside.
In a rising rate environment I don’t understand why the financials are having so much trouble here. Is there another shoe to drop? Or is this the dip to buy in the financials as we head into 2019?
I don’t know, and would love to hear some feedback in the comment section. One thing is for certain, tomorrow we likely test the recent lows, so buckle up. Just take a look at the recent action here:
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Some names to watch should we see a bounce in the financials are $JPM & $WFC, both of which landed on our oversold screen today. Some other names to watch from that screen include:
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As for momentum, the shippers had it today, along with the following tickers from our MOMO Screen:
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Do we bounce tomorrow? Your guess is as good as mine. I will say this though, if you are looking for a good weed stock to tuck away, you may get a gift should $CGC continue to pull in here. I don’t care what “Seeking Alpha” says. Keep it on watch.
See you guys at the open.
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$CGC at US$41.60 (C$ $54.46 $WEED.TO) looks compelling.
Approx. $20 per share in cash post $STZ taking 38% of Canopy (they owned 9.9% prior to this $4bln investment) at $37 via direct share placement($48.60) in 09/18. You are getting long at less than a 10% premium to where Constellation bought on round two in September 2018 with a much bigger cash buffer (i.e. no further dilution likely near term ex. granted warrants). Constellation has warrants to buy an additional 139.7mm shares for $5bln additional investment if all goes swimmingly. With this incremental investment, Constellation would own >50% of Canopy. 200.1mm shares o/s at present and just over US$4bln in cash ($9.6 bln mkt cap, 41.7% cash, wicked current ratio).
Looks like Instagram for $1bln to me. JCG