Out Fox The $treet

October was an exceptional month with a 47.9% gain versus the 10.8% gain for the benchmark leading to a 37.1% outperformance. Unfortunately, this was only a small recovery from the July, August and September selloff. With many stocks in the model still trading far below the July highs, substantial upside remains just to recapture those levels. Though global GDP growth came under pressure during the summer and fall months, US corporations are reporting record profits. The yield curve remains very positive suggesting an attractive environment exists for equities. On a daily basis, it's becoming more apparent that the summer swoon was more of investor panic than a economic reason suggesting a return to even the April and May highs of 1,370 on the S&P 500 is probably warranted. China remains a key focus of the model. While investments in China based stocks have been greatly reduced, the model still relies heavily on the demand for materials and construction related items coming...

Very interesting to see the stock of Goldman Sachs (GS) appear headed to a triple top breakout when just about every analyst has downgraded its earnings potential due to reduced trading profits and market activity. Not to mention that the stock is ramping prior to earnings just a week away on the 19th. Also, note the higher lows in the chart pattern suggesting further strength in the stock. The lower moving averages are about to cross the 200ema which is another very bullish sign. Though my portfolios have no position in GS, the stock is a leading indication of financials and the market in general. Right now the stock says the market is headed higher. Our favorites in this general area remain MF Global (MF) and International Assets (IAAC) both of which have been breaking out lately as well.

At least that's the goal that new CEO John Corzine has outlined for MF Global (MF). What exactly that entails it's probably much harder to grasp and understand. MF clearly wants to move into investment banking and money management sectors left dismantled by the financial regulations and credit crisis. It's also areas that Corzine and his new COO likely understand following their careers at Goldman Sachs (GS). Whether they can be successful pushing MF into these competitive areas seems up in the air. According to FT.com report and news from an investment conference last month, Corzine made the statement that MF hoped to double to 4,000 employees within a couple of years from an aggressive move into investment banking and money management. Now that's a very aggressive statement and very atypical in the financial sector these days where most institutions are expected to decrease in size. MF has the potential to skate under the radar and take share from bigger rivals tha...

Bought MF Global (MF) in the Opportunistic and Growth portfolios to rotate into a financial that underperformed over the last month or so. MF is particularly interesting because they hired former Goldman Sachs (GS) Chairman and ex-Governor of New Jersey to be their CEO. He has taken an aggressively path to move into investment banking plus they reported a strong margin expansion in Q2 due to cost cuts. Q3 will be as impressive due to the slow market, but now is likely the time to build a position. This is mainly a move that Corzine will be able to use his experience and influence to make MF into a major financial player. Especially at a time when the major players like Goldman Sachs (GS) and Morgan Stanley (MS) continue to face massive regulation pressures. Whether MF will be able to overcome such pressures isn't clear, but if anybody is going to make it happen its a Democrat like Corzine. The position was entered around $7.2 and is definitely being entered based on technicals....