STOCKS STUMBLE AS INVESTORS FEAR WORSENING ECONOMY – INTRODUCING CATS & DOGS January 30, 2009
Posted by Marlowe Cassetti in BIL, CMK, DGL, NYF, TIP.add a comment
Today in the market, Friday, January 30, 2009: Stocks finish lower as investors fear worsening economy, worry ‘bad bank’ idea has hit snag.
Wall Street ended its worst January ever by stumbling again over the banking system and the economy.
The major indexes all fell sharply for the second straight day, leaving the Dow Jones industrial average and Standard & Poor’s 500 index with record percentage drops for January — 8.84 percent and 8.57 percent, respectively. Some market watchers believe that’s a bad omen for the rest of the year, as the market usually ends a year down after having fallen in January. (headline & commentary courtesy of Yahoo Finance)
ETF/CEF Low Volatility:
- BIL – SPDR Lehman 1-3 T-Bill
- TIP – iShares Lehman TIPS Bond Fund
ETF/CEF Cats & Dogs:
- CMK – MFS Intermarket Income Trust
- DGL – PowerShares DB Multi-Sector Commodity Trust Gold Fund
- NYF – iShares S&P New York Municipal Bond Fund
ETF/CEF Discussion: The continuation of the decline has put RSI bask in the conservative camp. I tweaked the knobs a bit and came up with a category I call “Cats and Dogs”. They represent funds that are entering an up-trend, without regard to volatility, market cap and volume. Therefore these can be very thinly traded issues, so treat them like nitro. Handle with care! I will report on the C&D category from time to time, when they are of interest.
Have a good weekend
STOCKS SINK AS UNEMPLOYMENT CLAIMS REACH NEW HIGH – RSI LIKES GOLD & SHORTS January 29, 2009
Posted by Marlowe Cassetti in CEF, DOG, SDD.add a comment
Today in the market, Thursday, January 29, 2009: Caution returned to Wall Street Thursday as unemployment claims reached a record high and new home sales hit a record low — two glaring signs that the economy is still in a deep slump. The major stock indexes gave back all of Wednesday’s gains, and then some.
The Dow Jones industrial average sank 226 points, or 2.7 percent, while other indicators tumbled more than 3 percent. On Wednesday, stocks had soared on hopes that the government will take bad debt off banks’ books.
Investors took a step back Thursday after getting some harsh reminders that it might be a while before the nation’s 14-month-old recession ends. (headline & commentary courtesy of Yahoo Finance)
ETF/CEF High Volatility:
- CEF – Central Fund of Canada Ltd.
- DOG – ProShares Short Dow 30 Fund
- SDD – UltraShort SmallCap 600 Fund
ETF/CEF Discussion: The market reversal today sent RSI to the shorts and to gold. That’s what the RSI model came up with and it is a reversal from its long stance in the past few days. I cannot change the results. I’m just the messenger. I can speculate (and make an excuse) that these volatile times cause strange RSI behavior, but that is a cop out. One really needs to assess the market outlook and take the necessary actions. The question is, however, where this market is heading? I believe we are in a structural bear but I anticipate will get a countertrend bounce up. Maybe this bounce that started last November has run its course, we shall see.
Catch you tomorrow.
STOCKS JUMP ON REPORTS OF PLAN FOR BAD BANK ASSETS – RSI BULLISH ON FOREIGN FUNDS January 28, 2009
Posted by Marlowe Cassetti in BBH, BDT, EFV, EWM, EWP, EWQ, EWW, EZU, FEU, FEZ, FXI, GXC, HYG, IEV, IOO, XLY.add a comment
Today in the market, Wednesday, January 28, 2009: The optimism is building on Wall Street. Financial stocks led Wall Street sharply higher Wednesday on investor hopes the Obama administration will create banks to absorb the bad assets weighing down the financial system.
The Standard & Poor’s 500 index, a benchmark for the overall stock market, completed its first four-day rally since late November. The Dow Jones industrial average jumped 201 points.
Financial stocks surged on the notion that the government could take soured debt like defaulting mortgages off the hands of banks and place them in a so-called bad bank to hold toxic assets. Investors have been worrying that banks won’t be able to resume more normal levels of lending without somehow dumping or walling off the bad debt that is corroding their balance sheets. And the economy can’t recover from a 14-month-old recession without improvements in lending and consumer confidence (headline & commentary courtesy of Yahoo Finance)
ETF/CEF Medium Volatility:
- BBH – Biotech Holders
ETF/CEF High Volatility:
- BDT – BlackRock Strategic Dividend Achievers Trust
- EFV – iShares MSCI Value
- EWM – Malaysia iShares
- EWP – Spain iShares
- EWQ – France iShares
- EWW – Mexico iShares
- EZU – EMU Index iShares
- FEU – streetTRACKS Dow Jones STOXX 50 Fund
- FEZ – streetTRACKS Dow Jones Euro STOXX 50 Fund
- FXI – iShares FTSE/Xinhua China 25
- GXC – SPDR S&P China ETF
- HYG – iShares iBoxx High Yield Corporate Bond Fund
- IEV – Europe 350 iShares
- IOO – S&P Glbl 100 iShares
- XLY – Consumer Discretionary Select Sector SPDR
ETF/CEF Discussion: Well here we go again with another good gain in stocks today. Quite puzzling is that RSI picked so many foreign funds. Maybe there is something to this, I’m not sure. As the charts demonstrate, these funds are in the category of falling knives, so please use reasonable care. Today I added EFA and KCE to my portfolio. These two have been recent RSI picks. We shall see what transpires. Treasury Bonds sold off today and some of my bond fund holdings are approaching sell levels. I’m keeping a close eye on them.
Catch you tomorrow.
Street rises as companies post modest earnings; consumer confidence falls to new low – is RSI bullish? January 27, 2009
Posted by Marlowe Cassetti in EEM, EFA, EFG, EWJ, EWY, EZA, TIP, UDN, VPL.add a comment
Today in the market, Tuesday, January 27, 2009: Some of Wall Street’s earnings anxiety is easing — at least for the time being. The market had its second straight moderate advance Tuesday, rising after companies including United States Steel Corp. and American Express Co. managed to post profits in a difficult recession. Financial stocks that were mostly higher also lent support to the market. (headline & commentary courtesy of Yahoo Finance)
ETF/CEF Low Volatility:
- TIP – iShares Lehman TIPS Bond Fund
ETF/CEF Medium Volatility:
- UDN – PowerShares DB US Dollar Index Bearish Fund
ETF/CEF High Volatility:
- EEM – iShares MSCI Emerging Markets
- EFA – EAFE Index iShares
- EFG – iShare MSCI Growth
- EWJ – Japan iShares
- EWY – South Korea iShares
- EZA – South Africa iShares
- VPL – Vanguard Pacific VIPERs
ETF/CEF Discussion: Just after the market posts two daily gains, RSI rolls over and starts going long? Is this a mirage? Let’s look at today’s selections. Inflation protected bonds, short dollar, and foreign stocks. Or said another way … dollar down and inflation up. Is RSI signaling that the government huge spending plan will weaken the US dollar? Thus sending foreign stocks higher? I guess this scenario is a possible outcome.
Today I bought some of RSI’s recent picks of:
- ITB – iShares Dow Jones U.S. Home Construction
- PRF – PowerShares FTSE RAFI US 1000 Portfolio
- VWO – Vanguard Emerging Markets VIPERs
Since these were picked off the falling knife list I consider these speculative positions with tight stops. For full disclosure, I may pick up either EFA and/or VPL tomorrow. I currently own TIP (mentioned today) in my IRA portfolio.
WALL ST RISES, BUOYED BY DRUG SECTOR DEAL – RSI BOTTOM PICKS TODAY January 26, 2009
Posted by Marlowe Cassetti in ADRE, EWD, EWT, FXC, IIF, IJR, ITB, IWN, IYC, PRF, RWX, VCR, VWO.add a comment
Today in the market, Monday, January 26, 2009: Stocks rose in choppy trade on Monday, lifted by optimism over a $68 billion takeover in the drug industry that offset a grim warning about the year ahead from Caterpillar and worries over the state of the financial sector.
A rare piece of good news for the recession-hit economy also helped sentiment, as sales of existing U.S. homes unexpectedly jumped 6.5 percent in December. The Dow Jones index of home builders’ stocks rose 2.7 percent. Pfizer Inc (PFE.N), the world’s biggest drug maker, said it would buy rival Wyeth (WYE.N) for about $68 billion, suggesting that some companies are attractively valued after a dismal 2008.
“We haven’t seen any big deals in a while (so) it’s an indication that there is potential for some deals to get done,” said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
Caterpillar (CAT.N) was the Dow’s top drag after the heavy equipment maker forecast its 2009 profit would drop significantly from 2008 and said it would cut nearly 20,000 jobs. Caterpillar shed 8.4 percent to $32.67. The Dow Jones industrial average .DJI rose 38.47 points, or 0.48 percent, to 8,116.03. The Standard & Poor’s 500 Index .SPX added 4.62 points, or 0.56 percent, to 836.57. The Nasdaq Composite Index .IXIC gained 12.17 points, or 0.82 percent, to 1,489.46. (headline & commentary courtesy of Reuters)
ETF/CEF Medium Volatility:
- FXC – Currency Shares Canadian Dollar Trust
ETF/CEF High Volatility:
- ADRE – BLDRS Emerging Markets 50 ADR Index Fund
- EWD – Sweden iShares
- EWT – Taiwan iShares
- IIF – Morgan Stanley Dean Witter India
- IJR – S&P SmCap 600 iShares
- ITB – iShares Dow Jones U.S. Home Construction
- IWN – Russell 2000 Value iShares
- IYC – Consumer iShares
- PRF – PowerShares FTSE RAFI US 1000 Portfolio
- RWX – SPDR DJ Wilshire Intl Real Estate Index
- VCR – Vanguard Consumer Discretionary VIPERs
- VWO – Vanguard Emerging Markets VIPERs
ETF/CEF Discussion: With all the gloomy news in the markets, RSI decided to do some bottom fishing. So the above candidates are for those who anticipate the market coming around at some point in the future. Let’s look at the various sectors. First there are the foreign funds. Next are the consumer funds plus the small cap sector. Lastly are the home construction and real estate arena. This is quite a conglomeration of the beaten down sectors. Strangely missing are the tech, energy and material sectors. I guess RSI expects them to lag the chosen areas. We shall see about that.
WALL ST RISES, BUOYED BY DRUG SECTOR DEAL – RSI BOTTOM PICKS TODAY January 26, 2009
Posted by Marlowe Cassetti in ADRE, EWD, EWT, FXC, IIF, IJR, ITB, IWN, IYC, PRF, RWX, VCR, VWO.add a comment
Today in the market, Monday, January 26, 2009: Stocks rose in choppy trade on Monday, lifted by optimism over a $68 billion takeover in the drug industry that offset a grim warning about the year ahead from Caterpillar and worries over the state of the financial sector.
A rare piece of good news for the recession-hit economy also helped sentiment, as sales of existing U.S. homes unexpectedly jumped 6.5 percent in December. The Dow Jones index of home builders’ stocks rose 2.7 percent. Pfizer Inc (PFE.N), the world’s biggest drug maker, said it would buy rival Wyeth (WYE.N) for about $68 billion, suggesting that some companies are attractively valued after a dismal 2008.
“We haven’t seen any big deals in a while (so) it’s an indication that there is potential for some deals to get done,” said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
Caterpillar (CAT.N) was the Dow’s top drag after the heavy equipment maker forecast its 2009 profit would drop significantly from 2008 and said it would cut nearly 20,000 jobs. Caterpillar shed 8.4 percent to $32.67. The Dow Jones industrial average .DJI rose 38.47 points, or 0.48 percent, to 8,116.03. The Standard & Poor’s 500 Index .SPX added 4.62 points, or 0.56 percent, to 836.57. The Nasdaq Composite Index .IXIC gained 12.17 points, or 0.82 percent, to 1,489.46. (headline & commentary courtesy of Reuters)
ETF/CEF Medium Volatility:
- FXC – Currency Shares Canadian Dollar Trust
ETF/CEF High Volatility:
- ADRE – BLDRS Emerging Markets 50 ADR Index Fund
- EWD – Sweden iShares
- EWT – Taiwan iShares
- IIF – Morgan Stanley Dean Witter India
- IJR – S&P SmCap 600 iShares
- ITB – iShares Dow Jones U.S. Home Construction
- IWN – Russell 2000 Value iShares
- IYC – Consumer iShares
- PRF – PowerShares FTSE RAFI US 1000 Portfolio
- RWX – SPDR DJ Wilshire Intl Real Estate Index
- VCR – Vanguard Consumer Discretionary VIPERs
- VWO – Vanguard Emerging Markets VIPERs
ETF/CEF Discussion: With all the gloomy news in the markets, RSI decided to do some bottom fishing. So the above candidates are for those who anticipate the market coming around at some point in the future. Let’s look at the various sectors. First there are the foreign funds. Next are the consumer funds plus the small cap sector. Lastly are the home construction and real estate arena. This is quite a conglomeration of the beaten down sectors. Strangely missing are the tech, energy and material sectors. I guess RSI expects them to lag the chosen areas. We shall see about that.
WALL STREET OFF EARLIER LOWS ON TECH, FINANCIALS – RSI HAS FALLING KNIVES January 23, 2009
Posted by Marlowe Cassetti in Blogroll.add a comment
Today in the market, Friday, January 23, 2009: Investors’ ambivalence about earnings reports left Wall Street with a mixed performance Friday.
Traders pounced on companies showing signs of life and dumped companies whose quarterly results fell short of expectations. Better-than-expected results from Google Inc. helped technology shares while lackluster numbers from General Electric Co. reinforced investors’ concerns about the depths of the recession.
Stocks ended a volatile session well off their lows. A sizable comeback Friday was the latest back-and-forth seen throughout a turbulent week. The Dow tumbled 4 percent Tuesday, jumped 3 percent Wednesday and fell again Thursday. Volatility has been more the rule than the exception in recent trading as investors sort through a plethora of wide-ranging earnings reports.
According to preliminary calculations, the Dow industrials fell 45.24, or 0.56 percent, to 8,077.56. The Dow had been down more than 200 points early in the day and briefly moved into positive territory.
Broader stock indicators rose. The Standard & Poor’s 500 index rose 4.45, or 0.54 percent, to 831.95, while the Nasdaq composite index rose 11.80, or 0.81 percent, to 1,477.29. (headline & commentary courtesy of Yahoo Finance)
ETF/CEF High Volatility — Catch a Falling Knife:
- ADX Adams Express Co.
- DEM WisdomTree Emerging Markets High-Yielding Equity Fund
- DON Wisdom Tree Mid Cap Dividend
- EEB Claymore/BNY BRIC ETF
- EWH HongKong iShares
- GWX SPDR S&P International Small Cap ETF
- IFN India Fund, Inc.
- IJT SmCap 600 Growth iShares
- ISI iShares S&P 1500 Index Fund
- IWB Russell 1000 iShares
- IWM Russell 2000 iShares
- IWS Russell Mid-Cap Value iShares
- IWV Russell 3000 iShares
- IXC iShares S&P Global Energy Sector Index Fund
- IYY Total Market iShares
- IYZ Telecom iShares
- KCE SPDR KBW Capital Markets Index ETF
- PWV Powershares Dynamic Large Cap
- PWY Powershares Dynamic Small Cap
- SGF Singapore Fund, Inc.
- SPY S&P 500 SPDRs
- SWH Software Holders
- TMW SPDR DJ Wilshire Total Market ETF
- VOE Vanguard Mid Cap Value ETF
- VOX Vanguard Telecommunication Services VIPERs
- VTI Total Market VIPERs
- VV Vanguard Large Cap VIPERs
ETF/CEF Discussion: I thought I would drag out the CFK engine and give it a spin. It came up with the large list, shown above. These funds share the same characteristic.. Large drops from their highs from last year. This might be a good list to save and look at when the market rebounds, whenever that is. Like the old adage says, What ever goes down must come up like a beach ball in the water. This list may be as good as any other list…only time will tell.
Have a great and thoughtful weekend.
WALL STREET DROPS ON MICROSOFT, DATA; GOOGLE UP LATE – RSI PICKS SEVEN FUNDS January 22, 2009
Posted by Marlowe Cassetti in EBI, MYY, MZZ, PKW, QID, RWX, SMN.add a comment
Today in the market, Thursday, January 22, 2009: Stocks slid on Thursday,
after Microsoft's (MSFT.O) proposed job cuts and disappointing
earnings shook investors, while economic data showed further
deterioration in the labor and housing markets.
Microsoft Corp's stock fell nearly 12 percent at one point
in the session to its lowest level since 1998 and was among
the top drags on both the Dow and Nasdaq, after the world's
largest software maker said it would cut up to 5 percent of
its estimated work force over the next 18 months. The company
cautioned that it could no longer offer profit forecasts for
the rest of the fiscal year after posting a quarterly profit
that fell short of expectations. For more details, see
[ID:nN22530524]. The tech bellwether shook up Wall Street by
releasing its earnings before the opening bell, instead of
after the close as expected.
"There's just no good news out there. Microsoft pulled the
rug out from under us," said Joe Saluzzi, co-manager of
trading at Themis Trading in Chatham, New Jersey.
"Wall Street hates surprises -- don't surprise us like
that."
Wall Street briefly pared losses late in the session after
comments from the White House that it is committed to moving
as quickly as possible on a stimulus package and that
President Barack Obama's administration will do everything
possible to restore growth and normalize the markets.
The Dow Jones industrial average .DJI fell 105.30
points, or 1.28 percent, to 8,122.80. The Standard & Poor's
500 Index .SPX dropped 12.74 points, or 1.52 percent, to
827.50. The Nasdaq Composite Index .IXIC slumped 41.58
points, or 2.76 percent, to 1,465.49.
The Dow is down 7.5 percent for the month and down 34.4
percent from 52 weeks ago.(headline & commentary courtesy of Reuters)
ETF/CEF High Volatility:
- EBI – Evergreen Intl Balanced Income Fund
- MYY – ProShares Short MidCap 400 Fund
- MZZ – ProShares Ultra Short Mid Cap400
- PKW – Powershares Buyback Achievers
- QID – ProShares Ultra Short QQQ
- RWX – SPDR DJ Wilshire Intl Real Estate Index ETF
- SMN – ProShares UltraShort Basic Materials
ETF/CEF Discussion: The last sentence for Reuters tells it all. The market is not faring well at all, and RSI is picking up on this problem. All the picks today, that are not short funds, are in the falling knife category. Treat these with care. There are some interesting picks in this mix. International income, buyback, and real estate have been out of favor sectors and RSI expects a turnaround. We shall see.
APPLE PROFIT BEATS EXPECTATIONS, SHARES JUMP – RSI PICKS T-BILLS, LATIN AMERICA, AND TECHNOLOGY ETFs January 21, 2009
Posted by Marlowe Cassetti in BIL, ILF, XLK.add a comment
Today in the market, Wednesday, January 21, 2009: A bit of short-covering helped fuel a relief rally among stocks Wednesday. The S&P 500 closed 4.4% higher, but that still wasn’t enough to offset the prior session’s 5.3% drop.
Concerted leadership from the financial sector helped drive the rebound. The ascent by financials was partly triggered by the recognition that the sector was looking oversold, having lost more than 35% in the two weeks leading up to the open. Better-than-expected results from Northern Trust (NTRS 57.51, +13.58) and word that insiders were making big purchases at Bank of America (BAC 6.68, +1.58) also provided support.
Northern Trust reported fourth quarter earnings of $1.39 per share, which is $0.47 more than the $0.92 per share consensus estimate. Its shares responded by advancing 31%.
Bank of America saw its stock rebound 31% after regulatory reports revealed company directors purchased the stock in the prior session, which marked a multiyear low. CEO Ken Lewis purchased some 200,000 shares at prices ranging from $5.75 to $6.06 per share.
Shares of Bank of New York Mellon (BK 23.00, +4.24) registered strong gains after disclosing quarterly results that outshined State Street’s (STT 17.07, +2.18) latest results, which were announced yesterday. Concerns regarding increased risks at State Street led Moody’s to downgrade State Street’s credit rating.
U.S. Bancorp (USB 16.09, +0.75) posted earnings of $0.15 per share, which failed to meet the $0.22 per share that Wall Street forecast. The stock traded in the red for much of the session, but managed to close with a gain. (headline & commentary courtesy of Reuters)
ETF/CEF Low Volatility:
- BIL – SPDR Lehman 1-3 T-Bill
ETF/CEF High Volatility:
- ILF – Latin America 40 Index iShares
- XLK – Technology Select Sector SPDR
ETF/CEF Discussion: The last two days are quite volatile; one big down and one big up day. RSI isn’t wild about this market action. Thus RSI came up with T-Bills, Latin America, and Technology ETFs. The later two are definitely falling knives and are certainly the bottom fishing picks. Please use care. The big question – Is this a new trend change? Time will tell.
BANKS SINK WALL ST ON INAUGURATION DAY – RSI LIKES GOLD AND SHORT FUNDS January 20, 2009
Posted by Marlowe Cassetti in CEF, GLD, IAU, MYY, MZZ, PSQ, QID, SMN.add a comment
Today in the market, Tuesday, January 20, 2009: Wall Street ushered in the Barack Obama presidency with a record Inauguration Day drop on Tuesday amid fresh signs the global bank crisis was far from over.
High expectations for details on how the new administration would address the growing banking crisis and faltering economy were dampened after the inauguration speech concluded with little new information to digest.
State Street Corp (STT.N), the world’s largest institutional money manager, spooked investors about what is considered one of the safest areas in banking when it said it had a $6.3 billion unrealized loss in its investment portfolio and lowered its outlook. Its shares plunged 59 percent to $14.89.
“Stocks are getting crushed because of the never-ending tragedy that has fallen upon the banking sector,” said Tom Sowanick, chief investment officer of Clearbrook Financial LLC in Princeton, New Jersey.
The Dow Jones industrial average .DJI dropped 332.13 points, or 4.01 percent, to 7,949.09. The Standard & Poor’s 500 Index .SPX slid 44.90 points, or 5.28 percent, to 805.22. The Nasdaq Composite Index .IXIC tumbled 88.47 points, or 5.78 percent, to 1,440.86. (headline & commentary courtesy of Reuters)
ETF/CEF Medium Volatility:
- GLD – streetTRACKS Gold Trust Shares
- IAU – iShares COMEX Gold Trust
- CEF – Central Fund of Canada Ltd.
ETF/CEF High Volatility:
- MYY – ProShares Short MidCap 400 Fund
- MZZ – ProShares Ultra Short Mid Cap400
- PSQ – ProShares Short QQQ Fund
- QID – ProShares Ultra Short QQQ
- SMN – ProShares UltraShort Basic Materials
ETF/CEF Discussion: On this historic inauguration day the stock market tanked. I don’t think this was a cause and effect situation. Bad news form the global banking sector sure didn’t help. With that in place RSI picked three gold funds and five short ETFs. Is it time to buy gold? Sure looks to me that the gold funds have reversed and are headed higher. Same thing for the short funds. Yes, they are headed higher too. Just maybe the much anticipated Obama rally may not hold the market up and now what? Does this mean the market will drop further? We will know in the fullness of time.
Catch you tomorrow.
