Two Ways To Play: Lights Stay On in the Citi
Strengthen your portfolio in good times and bad.
If Citigroup (C) has 9 lives, it just used up at least 1. According to Reuters, the US government has opted to bail out the bank, injecting about $20 billion of fresh capital and agreeing to shoulder much of the potential losses on $306 billion of its riskiest assets.
In return, the government will receive preferred shares with an 8% dividend. The bank's top executives will keep their jobs, but Uncle Sam will have final say over compensation packages. Citi shares rose over 40% in European trading.
For more ideas, see Minyan Mailbag: Gold Will Rally - But Will Gold Stocks? by Professor Lance Lewis.
From the Bull Pen: Does this clear the way for a large rally into year-end? Those bullish can consider the Gold ETF (GLD). Recovering its 50 DMA is healthy and sell stops can be set below that level, or 2 points from entry.
From the Bear Cave: For those that believe the rally in the US dollar is exhausted, one play to consider is the Dollar Bearish Fund (UDN). Sell stops can be set near $24.
Quick Check Around the World
Asian trading closed with the Hang Seng -1.59%, Sensex -0.14%, Taiwan -0.25% and Shanghai -3.67%.
Glancing towards Europe, we see the CAC 4.47%, DAX 3.47%, FTSE 4.67%
As of 8:00 a.m. EST, S&P futures are trading +21 to 813, and Nasdaq futures are +18 to 1109.
A Look At Commodities
Crude oil is trading +1.78 to 51.70. Gold is +27 to 819.20. Silver is +0.445 to 9.925 and copper is +1.820 to 157.10.
The dollar index is -1.370 to 86.825.
On the Radar
10:00 Existing Home Sales
10:00 Existing Home Sales MoM
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Happy Monday! Have a great day!
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