Stocks drop, led by commodities on economic fear – RSI soars, bought SH & RWM; new pick MYY September 28, 2011
Posted by Marlowe Cassetti in MYY.trackback
Commodity-related stocks drove Wall Street lower on Wednesday as stiff declines in energy and metals prices underscored investor con
cerns about global economic weakness and Europe’s raging debt crisis.
A sharp 7 percent dive in the price of copper, seen as a leading indicator for the economy, rattled investors and led to a drop of 4.5 percent in the S&P materials index. Freeport-McMoRan Copper & Gold Inc fell 7.3 percent to $32.29.
Investors were on a knife edge as inspectors from the EU and IMF headed to Greece to scrutinize austerity plans while German Chancellor Angela Merkel worked to defuse a revolt within her government ahead of a vote to expand Europe’s bailout fund on Thursday.
The Dow Jones industrial average dropped 179.79 points, or 1.61 percent, to 11,010.90. The Standard & Poor’s 500 Index dropped 24.32 points, or 2.07 percent, to 1,151.06. The Nasdaq Composite Index dropped 55.25 points, or 2.17 percent, to 2,491.58. (commentary & photo courtesy of Reuters)
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RSI had an excellent day today while the market dove. The non-cash holdings gained 1.6% today. I also bought two of RSI recent picks SH & RWM. This increased the bear portfolio bias. Yes, this is taking a risk by betting on a continued bear market. It also doesn’t lead to a very diversified portfolio, but maybe that is okay in this current market environment.
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Today RSI made the following pick:
- Buy 154 shares ProShares Short MidCap400 (MYY); Volatility = 7.3%
What, another short the index fund? I guess so, since the market action is certainly leaning that way. MYY is looking like it wants to move up from its ascending trendline. It just might eclipse its prior high of $75, but it might take a while and a strong bear market. Right now I have to see more of a bear trend to buy this fund and see more money flow into MYY (see lower A/D line).
Catch you later.
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