An Opportunity in Large-Caps

We noted at the beginning of the month that the nature of the recent corrective decline was a bit different from what we are used to. This decline has been led by the largest-cap stocks in the market. The large-cap names gained bearish energy until their weakness eventually entangled the secondary and tertiary names.

The bearish pressure on large-cap stocks accelerated after the election, as traders anticipated higher taxes on dividends and capital gains. Traders dumped these names with some conviction, but they may have gone too far too fast on the downside. We see an opportunity with a mean-reversion trade on the upside....300 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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