Repeated here for weeks now:
PYPL - PayPal
Sold at break-even due to its remarkable relative weakness cited a month ago.
I’m planning to pick it back up eventually, likely at a much lower level and better setup, or switching to a “different one and done” for finance like Shopify or Block.
The different “one and done” is in fact BNKU - MicroSectors 3x Bull U.S. Big Banks
Forget all the bank drama. Nothing in recent market moves has been anything out of the ordinary or unexpected at this stage of the cycle.
When trees fall due to a high wind it's usually because the tree was already weak, perhaps rotted internally. Markets are the same way. My signals were already on pause at the top and bearish before the bank sector tumbled, with hedging in place.
Thus far however, there hasn't been a plunge across the board. There's been nothing disorderly occurring. Quite the opposite. A single-day drop in the Dow of 1000-1500 points will happen at some point, and that too will be statistically normal.
Ignore the short term. There will be wild swings and eventually there will be disorderly markets and capitulation, but we've seen nothing of the kind in years.
Of course the banking sector has seen unusual action lately, and opportunity knocks.
The reckless and lazy speculator’s pain is the prudent bear’s future payday.
Let’s consider BNKU
Despite being 3x levered long the top-10 U.S. banks, and down almost 50% the past couple weeks, it is barely oversold on a technical short-term basis.
It's down almost 80% from the start of 2022, yet in the long term BNKU is just recently rolling over from overbought readings last month.
Click here for BNKU info. Per that link, it contains:
10.87% CITIGROUP INC
10.87% JPMORGAN CHASE & CO
10.47% MORGAN STANLEY
10.36% GOLDMAN SACHS GROUP INC
10.07% WELLS FARGO & CO
10.00% PNC FINANCIAL SERVICES GROUP
9.97% BANK OF AMERICA CORP
9.67% US BANCORP
9.26% TRUIST FINANCIAL CORP
8.45% SCHWAB (CHARLES) CORP
*Index rebalanced to equal 10% weights monthly. Components as of SOD 03/13/2023, weightings rounded for ease of analysis.
I started chipping into BNKU today with every awareness I may be very early.
No stop. My avg. is $15.72
It closed today at $15.94
If up significantly sometime soon, great. I’ll book all or most of it.
If BNKU continues much lower I’ll add a 2nd, perhaps 3rd position over time if or when the banking sector is under true duress or the sector’s finally truly oversold.
The approach will be same as with BOIL; willing to go heavily overweight when the timing’s ideal.