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 Add Market Clues Blog to My Yahoo!Links: MyClues Home Page Thermopower, a breakthrough alternative energy, carbon-free and completely clean RSS Feed Market Clues Subscription Information Page Time & Cycles TFNN - Tom O'Brien T Theory - Terry Laundry Elliott Wave International's Market Report My Yahoo! Google News "The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens." ---John Maynard Keynes "If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around [the banks], will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." ---Thomas Jefferson "I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt." ---Thomas Jefferson
"I sincerely believe, with you, that banking establishments are more
dangerous than standing armies; and that the principle of spending money to be
paid by posterity, under the name of funding, is but swindling futurity on a large scale."
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Thursday, February 28, 2008
Unemployment Claims Send Market Lower
Thursday morning's report that unemployment claims reached 373,000 last week, considerably higher than the 350,000 that was expected, sent the stock market lower along with bond market interest rates. The rise in claims reflected a reluctance of business to hire workers as they face uncertainty about the economy. In addition, the government reported that the final quarter of 2007 reflected an almost standstill rate of growth of 0.6%, further adding to the uncertainty factor.
With stocks mired in a narrow trading range for the past five weeks, both bulls and bears are finding the stock market a losing proposition from both points of view. Some commodity markets are soaring as traders seek markets which are moving. This has sent oil back to near its highs above $100 and Gold pushing toward $1000. This rush of money into commodities is typical of a blow-off phase and buy-and-hold is definitely not the name of the game in these overextended assets. In fact, once the rush is over to own real assets, prices are likely to tumble very sharply lower in most commodities.
The government is very serious about bailing out speculators who have seen their bets on an ever-rising real estate market turn to dust. Taxpayers should expect to pay for this beneficence in coming years with higher taxes, taxes which place an increasingly heavy burden upon the economy and the fast disappearing middle class. But, with the bailout money flowing to real estate speculators today, can stock, bond and commodity investors expect to be bailed out as well? We would not be surprised if the next big pullback in those other markets see the Treasury dropping more helicopter money in the form of "tax rebates." The message the government continues to send: buy now and the US taxpayer will make up for your losses. We get the government we deserve, unfortunately.
Stocks pulled back slightly on Thursday, but retained their position in the middle of the trading range:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.88% | -112.10 |
| DIAMONDS TRUST SER 1 (DIA) | -0.78% | -99.09 |
| Ultra Dow30 ProShares (DDM) | -1.49% | -189.57 |
| UltraShort Dow30 ProShares (DXD) | +1.72% | +218.22 |
| S&P 500 (index) | -0.98% | -124.92 |
| S& P DEP RECEIPTS (SPY) | -0.98% | -123.99 |
| Ultra S&P500 ProShares (SSO) | -2.12% | -269.16 |
| UltraShort S&P500 ProShares (SDS) | +2.38% | +301.99 |
| NYSE Composite (index) | -0.76% | -97.00 |
| ISHARES NYSE CMP IDX (NYC) | -0.58% | -73.03 |
| S&P SmallCap 600 (index) | -1.28% | -162.62 |
| Ultra SmallCap 600 ProShares (SAA) | -2.66% | -337.43 |
| Short SmallCap 600 ProShares (SBB) | +1.94% | +246.32 |
| UltraShort SmallCap 600 ProShares (SDD) | +2.54% | +322.02 |
| Russell 2000 (index) | -1.48% | -188.17 |
| ISHARE RUS 2000 INDX (IWM) | -1.51% | -192.01 |
| Ultra Russell 2000 ProShares (UWM) | -4.09% | -518.87 |
| UltraShort Russell 2000 ProShares (TWM) | +3.27% | +415.17 |
| NASDAQ-100 (index) | -0.77% | -97.25 |
| NASDAQ 100 TR SER I (QQQQ) | -0.38% | -48.73 |
| Ultra QQQ ProShares (QLD) | -2.15% | -273.49 |
| UltraShort QQQ ProShares (QID) | +1.47% | +187.02 |
| S&P MidCap 400 (index) | -1.00% | -127.51 |
| ISHARE SP MC 400 INX (IJH) | -0.98% | -123.95 |
| Ultra MC400 ProShares (MVV) | -2.72% | -345.40 |
| UltraShort MC400 ProShares (MZZ) | +2.36% | +300.19 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +1.40% | +177.57 |
| Amex Gold (index) | +2.26% | +286.37 |
| MKT VECT GOLD MNRS (GDX) | +2.29% | +291.33 |
| STREETTRACKS GOLD TR (GLD) | +1.28% | +162.06 |
| Semiconductor Sector (index) | -2.57% | -326.29 |
| Ultra Semiconductors ProShares (USD) | -4.46% | -565.69 |
| UltraShort Semiconductors ProShares (SSG) | +3.88% | +492.56 |
| ISHARE DJ FIN SC INX (IYF) | -2.67% | -339.23 |
| ISHARES LEHMAN 20 YR (TLT) | +1.78% | +225.51 |
| ISHARESLEHMAN 7-10YR (IEF) | +1.17% | +148.74 |
| ISHARES LEH AGG FD (AGG) | +0.60% | +75.97 |
| ISHARES GS $ INVEST (LQD) | +0.72% | +92.01 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.24% | +30.33 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.16% | -20.47 |
| Short Dow30 ProShares (DOG) | +0.69% | +87.97 |
| Short S&P500 ProShares (SH) | +0.99% | +125.74 |
| Short MC400 ProShares (MYY) | +1.16% | +146.87 |
| Short SmallCap 600 ProShares (SBB) | +1.94% | +246.32 |
| Short Russell 2000 ProShares (RWM) | +1.23% | +156.74 |
| UltraShort QQQ ProShares (QID) | +1.47% | +187.02 |
| UltraShort Dow30 ProShares (DXD) | +1.72% | +218.22 |
| UltraShort S&P500 ProShares (SDS) | +2.38% | +301.99 |
| UltraShort MC400 ProShares (MZZ) | +2.36% | +300.19 |
| UltraShort SmallCap 600 ProShares (SDD) | +2.54% | +322.02 |
| UltraShort Russell 2000 ProShares (TWM) | +3.27% | +415.17 |
| UltraShort Russell 1000 Value ProShares (SJF) | +2.01% | +255.43 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +1.36% | +172.39 |
| UltraShort Russell MidCap Value ProShares (SJL) | +2.23% | +282.74 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +1.85% | +234.82 |
| UltraShort Russell 2000 Value ProShares (SJH) | +3.53% | +447.76 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +2.98% | +378.86 |
| UltraShort Basic Materials ProShares (SMN) | -0.65% | -82.65 |
| UltraShort Consumer Goods ProShares (SZK) | +1.54% | +196.01 |
| UltraShort Consumer Services ProShares (SCC) | +3.93% | +498.84 |
| UltraShort Financials ProShares (SKF) | +5.56% | +705.37 |
| UltraShort Health Care ProShares (RXD) | +1.66% | +210.90 |
| UltraShort Industrials ProShares (SIJ) | +1.73% | +219.90 |
| UltraShort Oil & Gas ProShares (DUG) | -3.06% | -388.43 |
| UltraShort Real Estate ProShares (SRS) | +3.71% | +470.65 |
| UltraShort Semiconductors ProShares (SSG) | +3.88% | +492.56 |
| UltraShort Technology ProShares (REW) | +2.62% | +332.17 |
| UltraShort Utilities ProShares (SDP) | +1.03% | +130.29 |
| Short MSCI Emerging Markets ProShares (EUM) | +1.13% | +143.76 |
| Short MSCI EAFE ProShares (EFZ) | +0.85% | +107.63 |
| UltraShort MSCI EAFE ProShares (EFU) | +1.60% | +203.44 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | +2.10% | +265.96 |
| UltraShort MSCI Japan ProShares (EWV) | +2.07% | +262.64 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +5.05% | +641.33 |
| Ultra QQQ ProShares (QLD) | -2.15% | -273.49 |
| Ultra Dow30 ProShares (DDM) | -1.49% | -189.57 |
| Ultra S&P500 ProShares (SSO) | -2.12% | -269.16 |
| Ultra MC400 ProShares (MVV) | -2.72% | -345.40 |
| Ultra SmallCap 600 ProShares (SAA) | -2.66% | -337.43 |
| Ultra Russell 2000 ProShares (UWM) | -4.09% | -518.87 |
| Ultra Russell 1000 Value ProShares (UVG) | -2.14% | -271.20 |
| Ultra Russell 1000 Growth ProShares (UKF) | -1.40% | -177.51 |
| Ultra Russell MidCap Value ProShares (UVU) | -2.74% | -347.61 |
| Ultra Russell MidCap Growth ProShares (UKW) | -2.10% | -266.39 |
| Ultra Russell 2000 Value ProShares (UVT) | -3.16% | -401.06 |
| Ultra Russell2000 Growth ProShares (UKK) | -2.13% | -270.34 |
| Ultra Basic Materials ProShares (UYM) | -0.09% | -11.54 |
| Ultra Consumer Goods ProShares (UGE) | -1.58% | -199.97 |
| Ultra Consumer Services ProShares (UCC) | -100.00% | -12694.28 |
| Ultra Financials ProShares (UYG) | -5.30% | -672.17 |
| Ultra Health Care ProShares (RXL) | -1.35% | -171.98 |
| Ultra Industrials ProShares (UXI) | -1.51% | -191.97 |
| Ultra Oil & Gas ProShares (DIG) | +2.87% | +364.51 |
| Ultra Real Estate ProShares (URE) | -3.75% | -475.75 |
| Ultra Semiconductors ProShares (USD) | -4.46% | -565.69 |
| Ultra Technology ProShares (ROM) | -1.91% | -241.96 |
| Ultra Utilities ProShares (UPW) | -0.95% | -120.11 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Wednesday, February 27, 2008
Credit Crunch Lurching Toward a Resolution
For about a year, the banking system has been lurching from one crisis to another. It appears to be making slow progress toward a resolution now. While the resolution of near term problems will have longer term implications which aren't good, at least the politicians will have an easy Election this year.
As is usually the case, the reckless speculators who bet on real estate going to the Moon and the individuals who rolled the dice buying overpriced housing with low teaser rates get the government bailout. And, the flip side of that coin is that the average taxpayer will be paying for that reckless behavior. It isn't fair, but it is the way the US government works.
On Wednesday stocks were bolstered by the announcement that government mortgage companies would be supporting excess speculation in housing by lifting the lid on the size of mortgages. Sensible areas of the country which didn't produce housing bubbles will be discriminated against in favor of areas where manic speculators were driving prices to the moon. As we said yesterday, the Fed and the government are finding ways to reflate busted asset bubbles in order to juice the economy. Did you really expect anything different, given the behavior of the Fed over the last twenty years?
Although some are now complaining about inflation, most of the complaints have to do with slow economic growth (stagflation). It appears that the public is willing to accept a relatively high level of inflation as long as the economy's growth rate keeps them in the green. Ultimately, though, this artificially-stimulated asset bubble will be unsustainable. That may come in a couple of years. The crowd still thinks 2008 will be a recession year, but with the bubble-blowers hard at work, the results of the latest round of pumping will show up in the stock market in the not-too-distant-future. On Wednesday, the market went flat, though:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.07% | +9.36 |
| DIAMONDS TRUST SER 1 (DIA) | +0.02% | +2.00 |
| Ultra Dow30 ProShares (DDM) | -0.25% | -31.22 |
| UltraShort Dow30 ProShares (DXD) | 0.00% | 0.00 |
| S&P 500 (index) | -0.12% | -15.52 |
| S& P DEP RECEIPTS (SPY) | -0.10% | -12.84 |
| Ultra S&P500 ProShares (SSO) | -0.16% | -20.92 |
| UltraShort S&P500 ProShares (SDS) | +0.17% | +21.14 |
| NYSE Composite (index) | -0.11% | -13.51 |
| ISHARES NYSE CMP IDX (NYC) | -0.15% | -19.33 |
| S&P SmallCap 600 (index) | -0.29% | -36.34 |
| Ultra SmallCap 600 ProShares (SAA) | -0.38% | -48.65 |
| Short SmallCap 600 ProShares (SBB) | -0.30% | -38.02 |
| UltraShort SmallCap 600 ProShares (SDD) | +0.90% | +114.49 |
| Russell 2000 (index) | -0.14% | -17.33 |
| ISHARE RUS 2000 INDX (IWM) | -0.04% | -5.33 |
| Ultra Russell 2000 ProShares (UWM) | +0.71% | +89.86 |
| UltraShort Russell 2000 ProShares (TWM) | +0.56% | +71.43 |
| NASDAQ-100 (index) | +0.53% | +67.77 |
| NASDAQ 100 TR SER I (QQQQ) | +0.50% | +63.32 |
| Ultra QQQ ProShares (QLD) | +0.64% | +81.10 |
| UltraShort QQQ ProShares (QID) | -0.04% | -5.05 |
| S&P MidCap 400 (index) | -0.49% | -62.55 |
| ISHARE SP MC 400 INX (IJH) | -0.36% | -46.28 |
| Ultra MC400 ProShares (MVV) | -1.21% | -152.91 |
| UltraShort MC400 ProShares (MZZ) | +1.00% | +126.41 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | -0.62% | -79.17 |
| Amex Gold (index) | +2.25% | +284.99 |
| MKT VECT GOLD MNRS (GDX) | +2.17% | +275.49 |
| STREETTRACKS GOLD TR (GLD) | +1.14% | +144.84 |
| Semiconductor Sector (index) | +1.21% | +153.82 |
| Ultra Semiconductors ProShares (USD) | +1.60% | +202.39 |
| UltraShort Semiconductors ProShares (SSG) | -1.47% | -186.39 |
| ISHARE DJ FIN SC INX (IYF) | +0.53% | +66.73 |
| ISHARES LEHMAN 20 YR (TLT) | +0.09% | +11.14 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.24% | +30.08 |
| ISHARES LEH AGG FD (AGG) | +0.21% | +26.19 |
| ISHARES GS $ INVEST (LQD) | -0.10% | -12.09 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.12% | +15.17 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.72% | -91.40 |
| Short Dow30 ProShares (DOG) | +0.32% | +41.02 |
| Short S&P500 ProShares (SH) | +0.09% | +11.79 |
| Short MC400 ProShares (MYY) | +0.37% | +47.06 |
| Short SmallCap 600 ProShares (SBB) | -0.30% | -38.02 |
| Short Russell 2000 ProShares (RWM) | +0.55% | +69.63 |
| UltraShort QQQ ProShares (QID) | -0.04% | -5.05 |
| UltraShort Dow30 ProShares (DXD) | 0.00% | 0.00 |
| UltraShort S&P500 ProShares (SDS) | +0.17% | +21.14 |
| UltraShort MC400 ProShares (MZZ) | +1.00% | +126.41 |
| UltraShort SmallCap 600 ProShares (SDD) | +0.90% | +114.49 |
| UltraShort Russell 2000 ProShares (TWM) | +0.56% | +71.43 |
| UltraShort Russell 1000 Value ProShares (SJF) | +0.37% | +46.58 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +0.46% | +58.88 |
| UltraShort Russell MidCap Value ProShares (SJL) | +0.79% | +100.77 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +1.00% | +127.48 |
| UltraShort Russell 2000 Value ProShares (SJH) | +0.75% | +95.33 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +0.54% | +68.02 |
| UltraShort Basic Materials ProShares (SMN) | +0.79% | +100.59 |
| UltraShort Consumer Goods ProShares (SZK) | -0.23% | -29.49 |
| UltraShort Consumer Services ProShares (SCC) | +0.93% | +117.68 |
| UltraShort Financials ProShares (SKF) | -1.21% | -152.89 |
| UltraShort Health Care ProShares (RXD) | +0.94% | +119.55 |
| UltraShort Industrials ProShares (SIJ) | +0.41% | +52.04 |
| UltraShort Oil & Gas ProShares (DUG) | +1.74% | +220.15 |
| UltraShort Real Estate ProShares (SRS) | +1.31% | +165.78 |
| UltraShort Semiconductors ProShares (SSG) | -1.47% | -186.39 |
| UltraShort Technology ProShares (REW) | -1.63% | -206.79 |
| UltraShort Utilities ProShares (SDP) | +2.90% | +368.42 |
| Short MSCI Emerging Markets ProShares (EUM) | -0.62% | -79.12 |
| Short MSCI EAFE ProShares (EFZ) | -0.16% | -19.82 |
| UltraShort MSCI EAFE ProShares (EFU) | -0.35% | -44.85 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -2.00% | -253.59 |
| UltraShort MSCI Japan ProShares (EWV) | +1.18% | +149.67 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -6.97% | -884.72 |
| Ultra QQQ ProShares (QLD) | +0.64% | +81.10 |
| Ultra Dow30 ProShares (DDM) | -0.25% | -31.22 |
| Ultra S&P500 ProShares (SSO) | -0.16% | -20.92 |
| Ultra MC400 ProShares (MVV) | -1.21% | -152.91 |
| Ultra SmallCap 600 ProShares (SAA) | -0.38% | -48.65 |
| Ultra Russell 2000 ProShares (UWM) | +0.71% | +89.86 |
| Ultra Russell 1000 Value ProShares (UVG) | -0.22% | -28.46 |
| Ultra Russell 1000 Growth ProShares (UKF) | -0.42% | -53.40 |
| Ultra Russell MidCap Value ProShares (UVU) | -0.60% | -76.72 |
| Ultra Russell MidCap Growth ProShares (UKW) | -0.92% | -116.98 |
| Ultra Russell 2000 Value ProShares (UVT) | -0.63% | -79.65 |
| Ultra Russell2000 Growth ProShares (UKK) | -0.17% | -21.29 |
| Ultra Basic Materials ProShares (UYM) | -0.10% | -12.80 |
| Ultra Consumer Goods ProShares (UGE) | -0.31% | -39.46 |
| Ultra Consumer Services ProShares (UCC) | -0.88% | -111.05 |
| Ultra Financials ProShares (UYG) | +0.69% | +88.07 |
| Ultra Health Care ProShares (RXL) | -1.48% | -187.25 |
| Ultra Industrials ProShares (UXI) | +0.19% | +24.02 |
| Ultra Oil & Gas ProShares (DIG) | -1.72% | -218.22 |
| Ultra Real Estate ProShares (URE) | -1.29% | -164.05 |
| Ultra Semiconductors ProShares (USD) | +1.60% | +202.39 |
| Ultra Technology ProShares (ROM) | +1.65% | +209.12 |
| Ultra Utilities ProShares (UPW) | -3.12% | -395.70 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Tuesday, February 26, 2008
Accelerating Inflation Sends Stocks Higher
It's clear that the Federal Reserve is very concerned with the crisis in the banking system now. Six months ago, statements from Fed governors were always accompanied by warnings that inflation was a major concern. Nowadays, shockingly high inflation reports only elicit mild references to inflation as a "temporary" problem. Reading between the lines, it's not hard to see that the Fed is in panic mode and trying to shore up the failing banks before the whole system collapses. On Tuesday, the Producer Price Index (the wholesale price index where inflation shows up before the Consumer Price Index) shows prices are accelerating higher.
Most think that inflation is bad for stocks, but Tuesday morning's report of a shockingly high rate of wholesale inflation (more than +13% annualized) sent the stock market soaring. While the average inflation rate is likely still in single digits, the current reading strongly suggests that the deflationists have it all wrong: inflation is not dead, it's alive and well and living in Washington. The campaign of the Fed and the government to reflate the economy is working -- too well, perhaps, but it's definitely working. This is why there will be no recession in 2008 and the extra stimulus generated by the government will simply push inflation higher.
While the Fed has been reflating the economy, the European Central Bank (ECB) has been relatively tight on monetary policy, which has kept the Euro Currency high. And, it has been a safe haven for investors looking to escape other countries to get higher returns. One of those countries is Japan, where investors have seen no real interest paid on their savings in two decades. With a huge excess savings rate, Japanese investors are converting their Yen to Euros and putting those funds to work. Yes, the Yen-carry trade is alive and well and helping boost stocks and bonds around the world. But, if inflation is the major problem it appears to be, the Fed cannot continue flooding the market with low-cost money very much longer or they will risk creating yet another asset price bubble.
Indeed, over the last two decades, the Fed has been holding the economy up by doing just that. First, it was the Internet bubble stock market which Greenspan inflated in the last half of the 'Nineties. After that bubble burst, the Fed cut interest rates to the bone (1% is considered "the bone" because any rate below that eliminates money market fund manager fees) and stoked a real estate bubble which pushed home prices in certain areas to outrageously high levels. Now, with that bubble deflating and leaving purchasers underwater on their mortgages (the price they could sell the house today is under the amount of equity they retain), monthly mortgage payments are doubling or tripling. The Fed's answer: create yet another bubble by slashing interest rates again. In addition the government is going to drop "helicopter money" on taxpayers at mid-year to make sure the economy is not in recession during the Election in November. This massive stimulus is designed to keep the economy out of recession this year.
Will it work? Yes, just like the other asset bubbles which have come before, it will work. But, it will only work until inflation becomes a serious problem for the economy. Like the 'Seventies, once inflation rises high enough, structural problems in the economy will prevent the Fed from being able to sustain the economy with easy money. Some think we've already reached that "Point of No Return," but we probably have one more asset bubble to go to reach that point. The real challenge for the Fed and the economy is more likely to come after the next President takes office and faces the fact that an economy barely growing and on life support cannot support the kind of promises candidates make in the heat of the campaign. Disappointment with whomever is elected is going to be high and the finger-pointing will be savage as to whom is to blame.
The stock market seems to agree that the short term outlook is positive, so the bulls were trying their "Get Out of Jail" cards this week:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.91% | +114.70 |
| DIAMONDS TRUST SER 1 (DIA) | +0.99% | +124.13 |
| Ultra Dow30 ProShares (DDM) | +1.82% | +228.79 |
| UltraShort Dow30 ProShares (DXD) | -2.06% | -259.42 |
| S&P 500 (index) | +0.61% | +76.15 |
| S& P DEP RECEIPTS (SPY) | +0.75% | +94.28 |
| Ultra S&P500 ProShares (SSO) | +1.18% | +148.60 |
| UltraShort S&P500 ProShares (SDS) | -1.77% | -222.23 |
| NYSE Composite (index) | +1.01% | +126.55 |
| ISHARES NYSE CMP IDX (NYC) | +1.03% | +129.53 |
| S&P SmallCap 600 (index) | +1.05% | +131.87 |
| Ultra SmallCap 600 ProShares (SAA) | +1.20% | +151.00 |
| Short SmallCap 600 ProShares (SBB) | -0.90% | -113.70 |
| UltraShort SmallCap 600 ProShares (SDD) | -2.33% | -292.75 |
| Russell 2000 (index) | +0.97% | +121.37 |
| ISHARE RUS 2000 INDX (IWM) | +0.93% | +117.23 |
| Ultra Russell 2000 ProShares (UWM) | +1.81% | +227.88 |
| UltraShort Russell 2000 ProShares (TWM) | -1.71% | -215.04 |
| NASDAQ-100 (index) | +0.20% | +24.71 |
| NASDAQ 100 TR SER I (QQQQ) | +0.39% | +48.68 |
| Ultra QQQ ProShares (QLD) | +0.93% | +116.37 |
| UltraShort QQQ ProShares (QID) | -1.41% | -177.57 |
| S&P MidCap 400 (index) | +0.98% | +122.87 |
| ISHARE SP MC 400 INX (IJH) | +0.99% | +125.05 |
| Ultra MC400 ProShares (MVV) | +2.22% | +279.54 |
| UltraShort MC400 ProShares (MZZ) | -1.69% | -212.33 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +1.85% | +232.45 |
| Amex Gold (index) | +1.97% | +247.62 |
| MKT VECT GOLD MNRS (GDX) | +2.14% | +268.97 |
| STREETTRACKS GOLD TR (GLD) | +1.05% | +131.48 |
| Semiconductor Sector (index) | +1.92% | +241.86 |
| Ultra Semiconductors ProShares (USD) | +3.98% | +500.51 |
| UltraShort Semiconductors ProShares (SSG) | -4.13% | -519.73 |
| ISHARE DJ FIN SC INX (IYF) | +0.43% | +53.69 |
| ISHARES LEHMAN 20 YR (TLT) | +0.03% | +4.14 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.25% | +31.31 |
| ISHARES LEH AGG FD (AGG) | +0.48% | +60.85 |
| ISHARES GS $ INVEST (LQD) | +0.72% | +90.48 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.14% | +18.07 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.87% | -109.74 |
| Short Dow30 ProShares (DOG) | -1.13% | -142.66 |
| Short S&P500 ProShares (SH) | -0.39% | -48.50 |
| Short MC400 ProShares (MYY) | -0.97% | -122.47 |
| Short SmallCap 600 ProShares (SBB) | -0.90% | -113.70 |
| Short Russell 2000 ProShares (RWM) | -1.12% | -141.31 |
| UltraShort QQQ ProShares (QID) | -1.41% | -177.57 |
| UltraShort Dow30 ProShares (DXD) | -2.06% | -259.42 |
| UltraShort S&P500 ProShares (SDS) | -1.77% | -222.23 |
| UltraShort MC400 ProShares (MZZ) | -1.69% | -212.33 |
| UltraShort SmallCap 600 ProShares (SDD) | -2.33% | -292.75 |
| UltraShort Russell 2000 ProShares (TWM) | -1.71% | -215.04 |
| UltraShort Russell 1000 Value ProShares (SJF) | -1.16% | -145.99 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -2.27% | -285.10 |
| UltraShort Russell MidCap Value ProShares (SJL) | -1.43% | -179.74 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -1.60% | -201.33 |
| UltraShort Russell 2000 Value ProShares (SJH) | -2.06% | -259.07 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -2.40% | -302.31 |
| UltraShort Basic Materials ProShares (SMN) | +0.33% | +41.38 |
| UltraShort Consumer Goods ProShares (SZK) | -1.64% | -206.63 |
| UltraShort Consumer Services ProShares (SCC) | -0.62% | -78.23 |
| UltraShort Financials ProShares (SKF) | -0.73% | -91.65 |
| UltraShort Health Care ProShares (RXD) | -0.76% | -95.10 |
| UltraShort Industrials ProShares (SIJ) | -0.10% | -12.36 |
| UltraShort Oil & Gas ProShares (DUG) | -2.94% | -369.71 |
| UltraShort Real Estate ProShares (SRS) | -0.67% | -84.61 |
| UltraShort Semiconductors ProShares (SSG) | -4.13% | -519.73 |
| UltraShort Technology ProShares (REW) | -2.17% | -272.58 |
| UltraShort Utilities ProShares (SDP) | -1.54% | -193.89 |
| Short MSCI Emerging Markets ProShares (EUM) | -1.44% | -181.42 |
| Short MSCI EAFE ProShares (EFZ) | -1.66% | -209.29 |
| UltraShort MSCI EAFE ProShares (EFU) | -3.22% | -404.87 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -2.22% | -278.93 |
| UltraShort MSCI Japan ProShares (EWV) | -2.61% | -327.73 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -1.31% | -164.74 |
| Ultra QQQ ProShares (QLD) | +0.93% | +116.37 |
| Ultra Dow30 ProShares (DDM) | +1.82% | +228.79 |
| Ultra S&P500 ProShares (SSO) | +1.18% | +148.60 |
| Ultra MC400 ProShares (MVV) | +2.22% | +279.54 |
| Ultra SmallCap 600 ProShares (SAA) | +1.20% | +151.00 |
| Ultra Russell 2000 ProShares (UWM) | +1.81% | +227.88 |
| Ultra Russell 1000 Value ProShares (UVG) | +2.47% | +310.70 |
| Ultra Russell 1000 Growth ProShares (UKF) | +2.59% | +325.74 |
| Ultra Russell MidCap Value ProShares (UVU) | +3.81% | +478.82 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.67% | +335.41 |
| Ultra Russell 2000 Value ProShares (UVT) | +2.07% | +259.58 |
| Ultra Russell2000 Growth ProShares (UKK) | +3.55% | +446.68 |
| Ultra Basic Materials ProShares (UYM) | -0.42% | -53.05 |
| Ultra Consumer Goods ProShares (UGE) | +2.55% | +320.84 |
| Ultra Consumer Services ProShares (UCC) | +2.51% | +315.35 |
| Ultra Financials ProShares (UYG) | +0.73% | +91.42 |
| Ultra Health Care ProShares (RXL) | +0.62% | +77.46 |
| Ultra Industrials ProShares (UXI) | +0.75% | +94.10 |
| Ultra Oil & Gas ProShares (DIG) | +2.90% | +365.04 |
| Ultra Real Estate ProShares (URE) | +0.48% | +60.78 |
| Ultra Semiconductors ProShares (USD) | +3.98% | +500.51 |
| Ultra Technology ProShares (ROM) | +2.33% | +292.94 |
| Ultra Utilities ProShares (UPW) | +2.01% | +252.63 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Monday, February 25, 2008
Home on the Range
The month-long trading range continued on Monday as weakness in the interest rate markets and strength in carry trade currencies combined with positive news to boost stocks more toward the upper end of the range. The interesting thing about the ratings agencies keeping bond insurers rating at AAA is that these are the same ratings agencies which rated subprime "toxic waste" debt as AAA last year. It's very interesting that the market would still show faith in agencies which obviously weren't skillful enough to properly rate debt paper last year. In fact, it's as large a leap of faith as we've seen since the dotcom bubble of the 'Nineties. In any case, the midday rally came on news and probably owed as much to short-covering as to anything else:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +1.53% | +189.20 |
| DIAMONDS TRUST SER 1 (DIA) | +1.43% | +177.01 |
| Ultra Dow30 ProShares (DDM) | +2.83% | +350.96 |
| UltraShort Dow30 ProShares (DXD) | -2.57% | -318.81 |
| S&P 500 (index) | +1.26% | +155.94 |
| S& P DEP RECEIPTS (SPY) | +1.26% | +156.11 |
| Ultra S&P500 ProShares (SSO) | +2.42% | +299.83 |
| UltraShort S&P500 ProShares (SDS) | -1.78% | -220.95 |
| NYSE Composite (index) | +1.60% | +198.40 |
| ISHARES NYSE CMP IDX (NYC) | +2.45% | +303.48 |
| S&P SmallCap 600 (index) | +2.09% | +258.48 |
| Ultra SmallCap 600 ProShares (SAA) | +4.38% | +542.15 |
| Short SmallCap 600 ProShares (SBB) | -2.49% | -308.06 |
| UltraShort SmallCap 600 ProShares (SDD) | -3.76% | -465.64 |
| Russell 2000 (index) | +2.06% | +255.01 |
| ISHARE RUS 2000 INDX (IWM) | +2.02% | +249.87 |
| Ultra Russell 2000 ProShares (UWM) | +4.91% | +607.66 |
| UltraShort Russell 2000 ProShares (TWM) | -4.94% | -611.43 |
| NASDAQ-100 (index) | +0.49% | +60.58 |
| NASDAQ 100 TR SER I (QQQQ) | +0.50% | +62.36 |
| Ultra QQQ ProShares (QLD) | +0.41% | +50.57 |
| UltraShort QQQ ProShares (QID) | -0.57% | -70.04 |
| S&P MidCap 400 (index) | +2.03% | +251.45 |
| ISHARE SP MC 400 INX (IJH) | +1.95% | +241.85 |
| Ultra MC400 ProShares (MVV) | +4.28% | +530.35 |
| UltraShort MC400 ProShares (MZZ) | -3.88% | -480.45 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +0.58% | +71.96 |
| Amex Gold (index) | +0.53% | +65.16 |
| MKT VECT GOLD MNRS (GDX) | +0.12% | +14.60 |
| STREETTRACKS GOLD TR (GLD) | -0.70% | -86.17 |
| Semiconductor Sector (index) | +1.17% | +145.32 |
| Ultra Semiconductors ProShares (USD) | +1.52% | +187.67 |
| UltraShort Semiconductors ProShares (SSG) | -1.94% | -240.69 |
| ISHARE DJ FIN SC INX (IYF) | +1.18% | +146.45 |
| ISHARES LEHMAN 20 YR (TLT) | -1.02% | -126.47 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.66% | -82.15 |
| ISHARES LEH AGG FD (AGG) | -0.35% | -43.87 |
| ISHARES GS $ INVEST (LQD) | -0.64% | -79.10 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.16% | -19.25 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +0.80% | +99.05 |
| Short Dow30 ProShares (DOG) | -1.17% | -144.74 |
| Short S&P500 ProShares (SH) | -1.22% | -150.99 |
| Short MC400 ProShares (MYY) | -2.03% | -251.84 |
| Short SmallCap 600 ProShares (SBB) | -2.49% | -308.06 |
| Short Russell 2000 ProShares (RWM) | -2.14% | -264.59 |
| UltraShort QQQ ProShares (QID) | -0.57% | -70.04 |
| UltraShort Dow30 ProShares (DXD) | -2.57% | -318.81 |
| UltraShort S&P500 ProShares (SDS) | -1.78% | -220.95 |
| UltraShort MC400 ProShares (MZZ) | -3.88% | -480.45 |
| UltraShort SmallCap 600 ProShares (SDD) | -3.76% | -465.64 |
| UltraShort Russell 2000 ProShares (TWM) | -4.94% | -611.43 |
| UltraShort Russell 1000 Value ProShares (SJF) | -2.59% | -320.98 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -2.27% | -281.08 |
| UltraShort Russell MidCap Value ProShares (SJL) | -3.83% | -474.27 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -3.80% | -471.09 |
| UltraShort Russell 2000 Value ProShares (SJH) | -4.13% | -511.72 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -4.18% | -517.42 |
| UltraShort Basic Materials ProShares (SMN) | -6.06% | -749.88 |
| UltraShort Consumer Goods ProShares (SZK) | -0.19% | -22.96 |
| UltraShort Consumer Services ProShares (SCC) | -3.62% | -448.32 |
| UltraShort Financials ProShares (SKF) | -1.76% | -218.29 |
| UltraShort Health Care ProShares (RXD) | -3.91% | -484.38 |
| UltraShort Industrials ProShares (SIJ) | -4.87% | -602.45 |
| UltraShort Oil & Gas ProShares (DUG) | -4.71% | -583.56 |
| UltraShort Real Estate ProShares (SRS) | -5.69% | -705.05 |
| UltraShort Semiconductors ProShares (SSG) | -1.94% | -240.69 |
| UltraShort Technology ProShares (REW) | -1.54% | -191.00 |
| UltraShort Utilities ProShares (SDP) | -1.32% | -163.05 |
| Short MSCI Emerging Markets ProShares (EUM) | -2.13% | -263.94 |
| Short MSCI EAFE ProShares (EFZ) | -1.88% | -233.37 |
| UltraShort MSCI EAFE ProShares (EFU) | -3.09% | -382.22 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -3.86% | -477.95 |
| UltraShort MSCI Japan ProShares (EWV) | -4.11% | -509.03 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -0.69% | -85.47 |
| Ultra QQQ ProShares (QLD) | +0.41% | +50.57 |
| Ultra Dow30 ProShares (DDM) | +2.83% | +350.96 |
| Ultra S&P500 ProShares (SSO) | +2.42% | +299.83 |
| Ultra MC400 ProShares (MVV) | +4.28% | +530.35 |
| Ultra SmallCap 600 ProShares (SAA) | +4.38% | +542.15 |
| Ultra Russell 2000 ProShares (UWM) | +4.91% | +607.66 |
| Ultra Russell 1000 Value ProShares (UVG) | +5.18% | +641.26 |
| Ultra Russell 1000 Growth ProShares (UKF) | +1.48% | +183.67 |
| Ultra Russell MidCap Value ProShares (UVU) | +4.96% | +614.70 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.49% | +308.00 |
| Ultra Russell 2000 Value ProShares (UVT) | +3.51% | +435.01 |
| Ultra Russell2000 Growth ProShares (UKK) | +3.19% | +394.77 |
| Ultra Basic Materials ProShares (UYM) | +5.71% | +707.56 |
| Ultra Consumer Goods ProShares (UGE) | +2.44% | +302.54 |
| Ultra Consumer Services ProShares (UCC) | +3.22% | +398.80 |
| Ultra Financials ProShares (UYG) | +2.00% | +247.27 |
| Ultra Health Care ProShares (RXL) | +4.94% | +611.76 |
| Ultra Industrials ProShares (UXI) | +3.21% | +397.63 |
| Ultra Oil & Gas ProShares (DIG) | +5.13% | +635.62 |
| Ultra Real Estate ProShares (URE) | +6.06% | +750.00 |
| Ultra Semiconductors ProShares (USD) | +1.52% | +187.67 |
| Ultra Technology ProShares (ROM) | +1.77% | +219.13 |
| Ultra Utilities ProShares (UPW) | +0.67% | +83.50 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Sunday, February 24, 2008
Zero Sum Market
Just as we forecast Thursday, Friday's stock market proved to be more of the same as the market rallied to retrace Thursday's decline and ended up virtually unchanged for the week. In fact, the market has gone absolute nowhere since the middle of January, which frustrates both the bulls and the bears no end. But, of course, that's what you expect in a basing pattern. Historically, the market will move sideways as long as it takes to cement the prevailing bearish opinion of traders, then breakout to the upside.
Now, if the trading range had gotten the crowd bullish, the breakout would be expected to be to the downside. But, when the trading range makes the crowd bearish, as this one has, the breakout is to the upside. That doesn't preclude a final smash to the downside to clear the air, though. But, long term investors who have been using this "clearance sale on stocks" to accumulate long term positions are patient enough to look forward to the other side of the trading range when the market indices will double or triple (as they have often done following corrections or bear markets). The longer the base, the larger the gain. Currently, this correction is seven months in length, having started at the July highs. This is almost as long a correction in time as the 1994 one (10 months), which was followed by a gain of 178% over the next six years. So, while it may be a frustration to wait, the longer the pain, the larger the gain on the other end.
Don't think the bears are any happier than the bulls right now. While they were crowing and chanting, "Prison Break for Bears!" just a month ago, this sideways market has not been satisfying to their ravenous thirst for lower prices. These dour grinches are used to suffering when the market is trending higher, but aren't used to the kind of water torture, bobbing up and down kind of market we have now. These are the thrill-seekers who want to see massive point declines day-after-day in the market. Each day that passes makes them ever more sure that the market is approaching a smash to the downside. Of course, they will eventually be right, but that's a reason for normal investors to be looking forward to the future, a future where the good companies' shares are taken out behind the woodshed and given a good thrashing by the bears. It's times like that when valuable assets can be obtained for pennies on the dollar and return many hundreds or thousands of percentage points in the future.
Last week, though, the market was essentially unchanged:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.27% | +32.81 |
| DIAMONDS TRUST SER 1 (DIA) | +0.38% | +47.06 |
| Ultra Dow30 ProShares (DDM) | +0.86% | +106.42 |
| UltraShort Dow30 ProShares (DXD) | -0.67% | -82.21 |
| S&P 500 (index) | +0.29% | +35.77 |
| S& P DEP RECEIPTS (SPY) | +0.36% | +43.86 |
| Ultra S&P500 ProShares (SSO) | +0.73% | +90.36 |
| UltraShort S&P500 ProShares (SDS) | -1.30% | -160.67 |
| NYSE Composite (index) | +1.05% | +129.47 |
| ISHARES NYSE CMP IDX (NYC) | +0.22% | +27.03 |
| S&P SmallCap 600 (index) | -0.28% | -34.06 |
| Ultra SmallCap 600 ProShares (SAA) | -0.17% | -21.40 |
| Short SmallCap 600 ProShares (SBB) | +0.49% | +60.44 |
| UltraShort SmallCap 600 ProShares (SDD) | +1.13% | +139.15 |
| Russell 2000 (index) | -0.92% | -113.43 |
| ISHARE RUS 2000 INDX (IWM) | -0.72% | -88.37 |
| Ultra Russell 2000 ProShares (UWM) | -2.86% | -353.23 |
| UltraShort Russell 2000 ProShares (TWM) | +2.05% | +253.14 |
| NASDAQ-100 (index) | -0.28% | -34.59 |
| NASDAQ 100 TR SER I (QQQQ) | -0.32% | -39.45 |
| Ultra QQQ ProShares (QLD) | -0.70% | -86.35 |
| UltraShort QQQ ProShares (QID) | +0.81% | +99.56 |
| S&P MidCap 400 (index) | +0.70% | +86.92 |
| ISHARE SP MC 400 INX (IJH) | +0.59% | +73.10 |
| Ultra MC400 ProShares (MVV) | +0.68% | +84.48 |
| UltraShort MC400 ProShares (MZZ) | -1.99% | -245.63 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +3.89% | +480.95 |
| Amex Gold (index) | +7.28% | +898.78 |
| MKT VECT GOLD MNRS (GDX) | +6.55% | +809.42 |
| STREETTRACKS GOLD TR (GLD) | +4.76% | +587.28 |
| Semiconductor Sector (index) | +1.24% | +153.48 |
| Ultra Semiconductors ProShares (USD) | +1.06% | +131.36 |
| UltraShort Semiconductors ProShares (SSG) | -0.52% | -64.41 |
| ISHARE DJ FIN SC INX (IYF) | +0.70% | +86.27 |
| ISHARES LEHMAN 20 YR (TLT) | +0.15% | +18.82 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.07% | -8.33 |
| ISHARES LEH AGG FD (AGG) | -0.35% | -43.60 |
| ISHARES GS $ INVEST (LQD) | -0.47% | -58.59 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.02% | -2.95 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +0.11% | +13.85 |
| Short Dow30 ProShares (DOG) | -0.55% | -67.90 |
| Short S&P500 ProShares (SH) | -0.64% | -78.56 |
| Short MC400 ProShares (MYY) | -0.68% | -84.43 |
| Short SmallCap 600 ProShares (SBB) | +0.49% | +60.44 |
| Short Russell 2000 ProShares (RWM) | +0.48% | +59.62 |
| UltraShort QQQ ProShares (QID) | +0.81% | +99.56 |
| UltraShort Dow30 ProShares (DXD) | -0.67% | -82.21 |
| UltraShort S&P500 ProShares (SDS) | -1.30% | -160.67 |
| UltraShort MC400 ProShares (MZZ) | -1.99% | -245.63 |
| UltraShort SmallCap 600 ProShares (SDD) | +1.13% | +139.15 |
| UltraShort Russell 2000 ProShares (TWM) | +2.05% | +253.14 |
| UltraShort Russell 1000 Value ProShares (SJF) | -2.20% | -271.81 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -0.15% | -18.22 |
| UltraShort Russell MidCap Value ProShares (SJL) | -0.98% | -121.43 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -1.15% | -142.27 |
| UltraShort Russell 2000 Value ProShares (SJH) | +1.00% | +123.20 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +2.81% | +347.13 |
| UltraShort Basic Materials ProShares (SMN) | -5.44% | -671.13 |
| UltraShort Consumer Goods ProShares (SZK) | -1.57% | -194.21 |
| UltraShort Consumer Services ProShares (SCC) | -0.07% | -8.22 |
| UltraShort Financials ProShares (SKF) | -1.91% | -235.80 |
| UltraShort Health Care ProShares (RXD) | +2.38% | +294.08 |
| UltraShort Industrials ProShares (SIJ) | +0.27% | +32.83 |
| UltraShort Oil & Gas ProShares (DUG) | -5.83% | -719.92 |
| UltraShort Real Estate ProShares (SRS) | -1.97% | -243.67 |
| UltraShort Semiconductors ProShares (SSG) | -0.52% | -64.41 |
| UltraShort Technology ProShares (REW) | +0.11% | +13.62 |
| UltraShort Utilities ProShares (SDP) | +0.91% | +112.95 |
| Short MSCI Emerging Markets ProShares (EUM) | -2.01% | -248.45 |
| Short MSCI EAFE ProShares (EFZ) | -1.23% | -151.73 |
| UltraShort MSCI EAFE ProShares (EFU) | -3.11% | -384.39 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -4.16% | -513.94 |
| UltraShort MSCI Japan ProShares (EWV) | -1.26% | -156.01 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +2.11% | +261.15 |
| Ultra QQQ ProShares (QLD) | -0.70% | -86.35 |
| Ultra Dow30 ProShares (DDM) | +0.86% | +106.42 |
| Ultra S&P500 ProShares (SSO) | +0.73% | +90.36 |
| Ultra MC400 ProShares (MVV) | +0.68% | +84.48 |
| Ultra SmallCap 600 ProShares (SAA) | -0.17% | -21.40 |
| Ultra Russell 2000 ProShares (UWM) | -2.86% | -353.23 |
| Ultra Russell 1000 Value ProShares (UVG) | -1.31% | -162.09 |
| Ultra Russell 1000 Growth ProShares (UKF) | +0.94% | +115.56 |
| Ultra Russell MidCap Value ProShares (UVU) | -2.74% | -337.73 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.68% | +331.08 |
| Ultra Russell 2000 Value ProShares (UVT) | -0.83% | -102.30 |
| Ultra Russell2000 Growth ProShares (UKK) | -1.97% | -243.63 |
| Ultra Basic Materials ProShares (UYM) | +5.44% | +672.18 |
| Ultra Consumer Goods ProShares (UGE) | -1.09% | -134.96 |
| Ultra Consumer Services ProShares (UCC) | -0.54% | -67.22 |
| Ultra Financials ProShares (UYG) | +1.39% | +171.45 |
| Ultra Health Care ProShares (RXL) | -2.87% | -354.00 |
| Ultra Industrials ProShares (UXI) | +0.02% | +1.87 |
| Ultra Oil & Gas ProShares (DIG) | +5.10% | +629.62 |
| Ultra Real Estate ProShares (URE) | +1.13% | +140.09 |
| Ultra Semiconductors ProShares (USD) | +1.06% | +131.36 |
| Ultra Technology ProShares (ROM) | -0.09% | -10.92 |
| Ultra Utilities ProShares (UPW) | -0.52% | -63.86 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Detailed Comments . . . .
Thursday, February 21, 2008
Caught in a Trading Range
Stocks continue to work through a falling volatilty trading range. This non-trending market is clearly looking for answers and not finding any. Wednesday's rally gains were exactly wiped out by Thursday's dip, leaving the market exactly where it was yesterday morning:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -1.15% | -142.96 |
| DIAMONDS TRUST SER 1 (DIA) | -0.72% | -89.13 |
| Ultra Dow30 ProShares (DDM) | -1.53% | -190.10 |
| UltraShort Dow30 ProShares (DXD) | +2.04% | +254.02 |
| S&P 500 (index) | -1.27% | -157.44 |
| S& P DEP RECEIPTS (SPY) | -0.83% | -103.32 |
| Ultra S&P500 ProShares (SSO) | -1.75% | -217.18 |
| UltraShort S&P500 ProShares (SDS) | +2.01% | +250.23 |
| NYSE Composite (index) | -1.06% | -131.79 |
| ISHARES NYSE CMP IDX (NYC) | -1.03% | -128.45 |
| S&P SmallCap 600 (index) | -1.77% | -220.04 |
| Ultra SmallCap 600 ProShares (SAA) | -3.48% | -432.15 |
| Short SmallCap 600 ProShares (SBB) | +1.88% | +233.56 |
| UltraShort SmallCap 600 ProShares (SDD) | +3.73% | +463.39 |
| Russell 2000 (index) | -1.95% | -242.59 |
| ISHARE RUS 2000 INDX (IWM) | -1.95% | -242.33 |
| Ultra Russell 2000 ProShares (UWM) | -4.57% | -568.36 |
| UltraShort Russell 2000 ProShares (TWM) | +3.96% | +492.73 |
| NASDAQ-100 (index) | -1.10% | -136.20 |
| NASDAQ 100 TR SER I (QQQQ) | -0.96% | -118.79 |
| Ultra QQQ ProShares (QLD) | -1.53% | -189.53 |
| UltraShort QQQ ProShares (QID) | +1.54% | +191.30 |
| S&P MidCap 400 (index) | -1.33% | -164.89 |
| ISHARE SP MC 400 INX (IJH) | -1.14% | -142.24 |
| Ultra MC400 ProShares (MVV) | -2.56% | -318.69 |
| UltraShort MC400 ProShares (MZZ) | +2.73% | +339.63 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +0.68% | +84.49 |
| Amex Gold (index) | -0.05% | -6.38 |
| MKT VECT GOLD MNRS (GDX) | -0.31% | -39.03 |
| STREETTRACKS GOLD TR (GLD) | +0.01% | +1.33 |
| Semiconductor Sector (index) | -0.28% | -34.91 |
| Ultra Semiconductors ProShares (USD) | -1.19% | -147.73 |
| UltraShort Semiconductors ProShares (SSG) | +0.90% | +111.26 |
| ISHARE DJ FIN SC INX (IYF) | -1.22% | -151.36 |
| ISHARES LEHMAN 20 YR (TLT) | +1.06% | +131.63 |
| ISHARESLEHMAN 7-10YR (IEF) | +1.03% | +128.13 |
| ISHARES LEH AGG FD (AGG) | +0.82% | +101.82 |
| ISHARES GS $ INVEST (LQD) | +0.69% | +85.57 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.28% | +34.24 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +0.56% | +69.76 |
| Short Dow30 ProShares (DOG) | +1.36% | +169.53 |
| Short S&P500 ProShares (SH) | +1.10% | +136.44 |
| Short MC400 ProShares (MYY) | +1.37% | +170.37 |
| Short SmallCap 600 ProShares (SBB) | +1.88% | +233.56 |
| Short Russell 2000 ProShares (RWM) | +2.02% | +250.47 |
| UltraShort QQQ ProShares (QID) | +1.54% | +191.30 |
| UltraShort Dow30 ProShares (DXD) | +2.04% | +254.02 |
| UltraShort S&P500 ProShares (SDS) | +2.01% | +250.23 |
| UltraShort MC400 ProShares (MZZ) | +2.73% | +339.63 |
| UltraShort SmallCap 600 ProShares (SDD) | +3.73% | +463.39 |
| UltraShort Russell 2000 ProShares (TWM) | +3.96% | +492.73 |
| UltraShort Russell 1000 Value ProShares (SJF) | +2.55% | +317.07 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +2.33% | +289.79 |
| UltraShort Russell MidCap Value ProShares (SJL) | +1.69% | +209.63 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +0.38% | +47.04 |
| UltraShort Russell 2000 Value ProShares (SJH) | +3.03% | +376.43 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +2.97% | +369.68 |
| UltraShort Basic Materials ProShares (SMN) | +3.43% | +425.82 |
| UltraShort Consumer Goods ProShares (SZK) | +1.42% | +176.09 |
| UltraShort Consumer Services ProShares (SCC) | +3.65% | +453.69 |
| UltraShort Financials ProShares (SKF) | +2.79% | +347.26 |
| UltraShort Health Care ProShares (RXD) | +2.28% | +282.94 |
| UltraShort Industrials ProShares (SIJ) | +2.02% | +250.56 |
| UltraShort Oil & Gas ProShares (DUG) | +4.44% | +551.96 |
| UltraShort Real Estate ProShares (SRS) | +3.90% | +485.27 |
| UltraShort Semiconductors ProShares (SSG) | +0.90% | +111.26 |
| UltraShort Technology ProShares (REW) | -0.21% | -25.56 |
| UltraShort Utilities ProShares (SDP) | +1.96% | +243.12 |
| Short MSCI Emerging Markets ProShares (EUM) | +1.30% | +161.14 |
| Short MSCI EAFE ProShares (EFZ) | -0.12% | -15.47 |
| UltraShort MSCI EAFE ProShares (EFU) | +0.84% | +104.72 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | +2.66% | +330.76 |
| UltraShort MSCI Japan ProShares (EWV) | -1.30% | -162.14 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +6.76% | +840.41 |
| Ultra QQQ ProShares (QLD) | -1.53% | -189.53 |
| Ultra Dow30 ProShares (DDM) | -1.53% | -190.10 |
| Ultra S&P500 ProShares (SSO) | -1.75% | -217.18 |
| Ultra MC400 ProShares (MVV) | -2.56% | -318.69 |
| Ultra SmallCap 600 ProShares (SAA) | -3.48% | -432.15 |
| Ultra Russell 2000 ProShares (UWM) | -4.57% | -568.36 |
| Ultra Russell 1000 Value ProShares (UVG) | -100.00% | -12427.26 |
| Ultra Russell 1000 Growth ProShares (UKF) | -2.56% | -318.06 |
| Ultra Russell MidCap Value ProShares (UVU) | -0.93% | -115.60 |
| Ultra Russell MidCap Growth ProShares (UKW) | -2.55% | -316.93 |
| Ultra Russell 2000 Value ProShares (UVT) | -4.42% | -549.64 |
| Ultra Russell2000 Growth ProShares (UKK) | -3.11% | -387.00 |
| Ultra Basic Materials ProShares (UYM) | -3.30% | -409.68 |
| Ultra Consumer Goods ProShares (UGE) | -1.05% | -130.63 |
| Ultra Consumer Services ProShares (UCC) | -2.22% | -276.28 |
| Ultra Financials ProShares (UYG) | -2.77% | -344.41 |
| Ultra Health Care ProShares (RXL) | -2.21% | -274.97 |
| Ultra Industrials ProShares (UXI) | -2.02% | -251.22 |
| Ultra Oil & Gas ProShares (DIG) | -4.15% | -515.27 |
| Ultra Real Estate ProShares (URE) | -3.85% | -478.74 |
| Ultra Semiconductors ProShares (USD) | -1.19% | -147.73 |
| Ultra Technology ProShares (ROM) | -1.92% | -238.57 |
| Ultra Utilities ProShares (UPW) | -3.11% | -386.73 |
While stocks are trendless, there are signs of a big change in trend coming on the horizon. We discuss this in tonight's Notes for subscribers only.
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Wednesday, February 20, 2008
Market Recovers From Bad Inflation Report
Stocks sold off initially on a report which shows year-over-year consumer inflation running over 4%, but recovered to close with a solid gain for the day. This was still likely just a trading range move as the market has been gyrating within a contracting trading range since the panic low of late January. That panic low was accompanied by an emergency interest rate cut by the Federal Reserve, partially in reaction to the stock selloff. Minutes of those January Fed meetings were released Wednesday afternoon in Washington which revealed that the Fed was cognizant of the risks its former policy of slow and steady easing held to the economy. Further rate cuts appeared to be possible should the data show the economy continuing to slip toward recession, although it was emphasized in those minutes that an outright recession is not expected to occur. Still, very slow growth in the first half of 2008 is being forecast by the Fed staff, with a modest pickup in growth expected in the second half as the Congressional "helicopter drop" of stimulus money lands.
The bigger question is what the Fed is going to do when and if this stimulus actually works and pulls the economy up from recession. The minutes make it clear that the Fed intends to raise rates much faster than during the 2004-2006 cycle to head off inflation. The question remains whether the inflation genie is out of the bottle. Certainly, the bond market has been very weak in the last few weeks, a sign that long term investors are not confident that prices will remain in control. Current yields on 30-year bonds are consistent with an inflation rate of 1-2% and that certainly is not what anyone reasonably expects to happen in the next couple of years. The University of Michigan Survey of inflation expectations, in fact, shows that the typical consumer expects inflation to run at about 3.3%. At the current 30-year bond yield of 4.639%, that suggests a real rate of 1.3%. After income taxes are taken out after capital gains taxes are collected on the (before inflation) gain, that means that bond investors are losing money by lending it to the government.
So, at some point, bonds will have to fall substantially in price (and rise in yield) to reflect the reality of rising inflation. That day may be coming soon, only delayed if the economy does slip into recession. That's a possibility the stock market is beginning to see as less likely if Wednesday's rally is a sign:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.73% | +90.04 |
| DIAMONDS TRUST SER 1 (DIA) | +0.33% | +40.90 |
| Ultra Dow30 ProShares (DDM) | +0.53% | +65.48 |
| UltraShort Dow30 ProShares (DXD) | -1.04% | -128.04 |
| S&P 500 (index) | +0.82% | +101.71 |
| S& P DEP RECEIPTS (SPY) | +0.30% | +36.41 |
| Ultra S&P500 ProShares (SSO) | +0.11% | +14.04 |
| UltraShort S&P500 ProShares (SDS) | -1.11% | -137.56 |
| NYSE Composite (index) | +0.56% | +69.62 |
| ISHARES NYSE CMP IDX (NYC) | +0.41% | +50.62 |
| S&P SmallCap 600 (index) | +1.20% | +147.48 |
| Ultra SmallCap 600 ProShares (SAA) | +2.17% | +267.74 |
| Short SmallCap 600 ProShares (SBB) | -1.36% | -168.26 |
| UltraShort SmallCap 600 ProShares (SDD) | -1.96% | -241.29 |
| Russell 2000 (index) | +0.91% | +111.72 |
| ISHARE RUS 2000 INDX (IWM) | +0.06% | +6.98 |
| Ultra Russell 2000 ProShares (UWM) | +2.21% | +272.54 |
| UltraShort Russell 2000 ProShares (TWM) | -1.63% | -201.00 |
| NASDAQ-100 (index) | +1.22% | +151.07 |
| NASDAQ 100 TR SER I (QQQQ) | +0.46% | +56.41 |
| Ultra QQQ ProShares (QLD) | +0.92% | +113.23 |
| UltraShort QQQ ProShares (QID) | -1.57% | -194.12 |
| S&P MidCap 400 (index) | +1.37% | +169.04 |
| ISHARE SP MC 400 INX (IJH) | +1.22% | +150.70 |
| Ultra MC400 ProShares (MVV) | +2.62% | +322.83 |
| UltraShort MC400 ProShares (MZZ) | -2.13% | -262.41 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +0.18% | +21.92 |
| Amex Gold (index) | +2.50% | +308.72 |
| MKT VECT GOLD MNRS (GDX) | +2.72% | +335.79 |
| STREETTRACKS GOLD TR (GLD) | +1.81% | +223.63 |
| Semiconductor Sector (index) | +2.74% | +338.45 |
| Ultra Semiconductors ProShares (USD) | +3.65% | +450.71 |
| UltraShort Semiconductors ProShares (SSG) | -2.44% | -301.40 |
| ISHARE DJ FIN SC INX (IYF) | +1.30% | +160.76 |
| ISHARES LEHMAN 20 YR (TLT) | +0.69% | +85.46 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.09% | -11.17 |
| ISHARES LEH AGG FD (AGG) | -0.16% | -19.46 |
| ISHARES GS $ INVEST (LQD) | +0.22% | +27.20 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.12% | -14.76 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.87% | -107.88 |
| Short Dow30 ProShares (DOG) | -1.07% | -131.66 |
| Short S&P500 ProShares (SH) | -0.49% | -59.91 |
| Short MC400 ProShares (MYY) | -1.37% | -168.74 |
| Short SmallCap 600 ProShares (SBB) | -1.36% | -168.26 |
| Short Russell 2000 ProShares (RWM) | -1.24% | -152.70 |
| UltraShort QQQ ProShares (QID) | -1.57% | -194.12 |
| UltraShort Dow30 ProShares (DXD) | -1.04% | -128.04 |
| UltraShort S&P500 ProShares (SDS) | -1.11% | -137.56 |
| UltraShort MC400 ProShares (MZZ) | -2.13% | -262.41 |
| UltraShort SmallCap 600 ProShares (SDD) | -1.96% | -241.29 |
| UltraShort Russell 2000 ProShares (TWM) | -1.63% | -201.00 |
| UltraShort Russell 1000 Value ProShares (SJF) | -1.04% | -127.76 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -1.39% | -171.53 |
| UltraShort Russell MidCap Value ProShares (SJL) | -0.81% | -99.84 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -0.15% | -18.32 |
| UltraShort Russell 2000 Value ProShares (SJH) | -1.52% | -187.79 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -1.39% | -171.89 |
| UltraShort Basic Materials ProShares (SMN) | -1.91% | -236.03 |
| UltraShort Consumer Goods ProShares (SZK) | +0.08% | +10.39 |
| UltraShort Consumer Services ProShares (SCC) | -1.78% | -219.17 |
| UltraShort Financials ProShares (SKF) | -3.41% | -420.34 |
| UltraShort Health Care ProShares (RXD) | +0.38% | +46.99 |
| UltraShort Industrials ProShares (SIJ) | -1.44% | -177.60 |
| UltraShort Oil & Gas ProShares (DUG) | -2.41% | -297.09 |
| UltraShort Real Estate ProShares (SRS) | -2.95% | -363.66 |
| UltraShort Semiconductors ProShares (SSG) | -2.44% | -301.40 |
| UltraShort Technology ProShares (REW) | -1.57% | -193.16 |
| UltraShort Utilities ProShares (SDP) | -0.16% | -19.19 |
| Short MSCI Emerging Markets ProShares (EUM) | -1.05% | -129.51 |
| Short MSCI EAFE ProShares (EFZ) | +0.71% | +88.19 |
| UltraShort MSCI EAFE ProShares (EFU) | +0.49% | +59.90 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -1.04% | -128.43 |
| UltraShort MSCI Japan ProShares (EWV) | +3.80% | +468.71 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +1.28% | +158.35 |
| Ultra QQQ ProShares (QLD) | +0.92% | +113.23 |
| Ultra Dow30 ProShares (DDM) | +0.53% | +65.48 |
| Ultra S&P500 ProShares (SSO) | +0.11% | +14.04 |
| Ultra MC400 ProShares (MVV) | +2.62% | +322.83 |
| Ultra SmallCap 600 ProShares (SAA) | +2.17% | +267.74 |
| Ultra Russell 2000 ProShares (UWM) | +2.21% | +272.54 |
| Ultra Russell 1000 Value ProShares (UVG) | -0.25% | -31.18 |
| Ultra Russell 1000 Growth ProShares (UKF) | +1.75% | +216.29 |
| Ultra Russell MidCap Value ProShares (UVU) | -0.53% | -64.86 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.14% | +264.54 |
| Ultra Russell 2000 Value ProShares (UVT) | +3.27% | +403.81 |
| Ultra Russell2000 Growth ProShares (UKK) | +0.70% | +86.51 |
| Ultra Basic Materials ProShares (UYM) | +2.58% | +318.50 |
| Ultra Consumer Goods ProShares (UGE) | -0.81% | -100.26 |
| Ultra Consumer Services ProShares (UCC) | +1.19% | +146.47 |
| Ultra Financials ProShares (UYG) | +3.40% | +419.14 |
| Ultra Health Care ProShares (RXL) | -0.51% | -62.98 |
| Ultra Industrials ProShares (UXI) | +1.80% | +221.92 |
| Ultra Oil & Gas ProShares (DIG) | +2.41% | +297.33 |
| Ultra Real Estate ProShares (URE) | +0.48% | +59.70 |
| Ultra Semiconductors ProShares (USD) | +3.65% | +450.71 |
| Ultra Technology ProShares (ROM) | +3.26% | +402.42 |
| Ultra Utilities ProShares (UPW) | +0.06% | +6.86 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Tuesday, February 19, 2008
Inflation Worries Continue to Dominate Markets
Both stocks and bonds were weaker Tuesday on continuing inflation worries. Oil prices challenged their prior highs as the energy markets continue to levitate at all-time highs. Once energy prices peak in the near future, these highs will never again be seen as breakthrough alternative energy technology (not publically visible yet, but coming within the year) will make the use of fossil fuels in the future obsolete and usher in a new "Golden Age" of cheap energy to continue powering advancement of human civilization well into the distant future. The current age of very wasteful and polluting energy is about to draw to a close and will be replaced by clean and very renewable energy sources which will put petroleum in the same class as whale oil as an (obsolete) energy source. Good riddance!
It's interesting to note that Dow Jones added Chevron, a leading company in a soon to be obsolete industry, to the Industrials Average today.
On the short term, the markets are looking back at the past and projecting current trends indefinitely into the future as the market is in a state of ignorance of these future developments which will radically change the energy landscape. Certainly, there are significant investor worries in that regard as not only energy, but shortages and rapidly escalating prices of other raw materials threaten to exacerbate growth in the inflation rate over the near term. The inflation genie is out of the bottle and more and more investors are beginning to realize that the Fed has gone too far in cutting interest rates (just as they went too far in hiking them last year). The futures markets which had been forecasting more rate cuts from the Fed suddenly decided that might not be the prudent course of action Tuesday and started unwinding some of those rate cuts.
Tuesday's market started with a flurry of optimism, but ended with deflation in some security prices. We have added GCC, the ETF which tracks the CRB Continuous Commodity Index, and several bond ETFs to the table below today:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.09% | -10.99 |
| DIAMONDS TRUST SER 1 (DIA) | +0.28% | +35.04 |
| Ultra Dow30 ProShares (DDM) | +0.52% | +64.19 |
| UltraShort Dow30 ProShares (DXD) | -0.40% | -49.76 |
| S&P 500 (index) | +0.15% | +18.57 |
| S& P DEP RECEIPTS (SPY) | +0.28% | +34.72 |
| Ultra S&P500 ProShares (SSO) | +0.88% | +108.08 |
| UltraShort S&P500 ProShares (SDS) | -0.38% | -47.03 |
| NYSE Composite (index) | +0.58% | +71.96 |
| ISHARES NYSE CMP IDX (NYC) | +0.77% | +94.60 |
| S&P SmallCap 600 (index) | +0.20% | +24.71 |
| Ultra SmallCap 600 ProShares (SAA) | +0.27% | +33.29 |
| Short SmallCap 600 ProShares (SBB) | -0.09% | -11.43 |
| UltraShort SmallCap 600 ProShares (SDD) | +0.18% | +22.14 |
| Russell 2000 (index) | -0.15% | -18.11 |
| ISHARE RUS 2000 INDX (IWM) | +1.23% | +151.99 |
| Ultra Russell 2000 ProShares (UWM) | +0.72% | +88.31 |
| UltraShort Russell 2000 ProShares (TWM) | -1.13% | -140.13 |
| NASDAQ-100 (index) | -0.48% | -59.62 |
| NASDAQ 100 TR SER I (QQQQ) | -0.18% | -22.54 |
| Ultra QQQ ProShares (QLD) | -0.95% | -117.44 |
| UltraShort QQQ ProShares (QID) | +1.24% | +152.99 |
| S&P MidCap 400 (index) | +0.09% | +11.64 |
| ISHARE SP MC 400 INX (IJH) | +0.03% | +3.11 |
| Ultra MC400 ProShares (MVV) | +0.03% | +3.67 |
| UltraShort MC400 ProShares (MZZ) | -1.24% | -153.27 |
| GREENHAVEN Continuous Commodity Indx Fnd (GCC) | +1.96% | +242.34 |
| Amex Gold (index) | +4.76% | +588.21 |
| MKT VECT GOLD MNRS (GDX) | +3.87% | +478.41 |
| STREETTRACKS GOLD TR (GLD) | +2.73% | +336.58 |
| Semiconductor Sector (index) | -1.31% | -161.65 |
| Ultra Semiconductors ProShares (USD) | -1.57% | -194.42 |
| UltraShort Semiconductors ProShares (SSG) | +0.51% | +62.84 |
| ISHARE DJ FIN SC INX (IYF) | -0.68% | -83.44 |
| ISHARES LEHMAN 20 YR (TLT) | -1.01% | -124.99 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.72% | -88.82 |
| ISHARES LEH AGG FD (AGG) | -0.48% | -59.35 |
| ISHARES GS $ INVEST (LQD) | -0.99% | -121.88 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.07% | -8.86 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +0.75% | +92.96 |
| Short Dow30 ProShares (DOG) | +0.11% | +13.58 |
| Short S&P500 ProShares (SH) | -0.18% | -22.44 |
| Short MC400 ProShares (MYY) | -0.02% | -1.92 |
| Short SmallCap 600 ProShares (SBB) | -0.09% | -11.43 |
| Short Russell 2000 ProShares (RWM) | -0.42% | -51.78 |
| UltraShort QQQ ProShares (QID) | +1.24% | +152.99 |
| UltraShort Dow30 ProShares (DXD) | -0.40% | -49.76 |
| UltraShort S&P500 ProShares (SDS) | -0.38% | -47.03 |
| UltraShort MC400 ProShares (MZZ) | -1.24% | -153.27 |
| UltraShort SmallCap 600 ProShares (SDD) | +0.18% | +22.14 |
| UltraShort Russell 2000 ProShares (TWM) | -1.13% | -140.13 |
| UltraShort Russell 1000 Value ProShares (SJF) | -0.96% | -118.12 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +0.34% | +41.41 |
| UltraShort Russell MidCap Value ProShares (SJL) | -1.19% | -146.78 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -1.89% | -233.85 |
| UltraShort Russell 2000 Value ProShares (SJH) | -0.34% | -41.49 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +0.44% | +54.57 |
| UltraShort Basic Materials ProShares (SMN) | -5.73% | -707.25 |
| UltraShort Consumer Goods ProShares (SZK) | +0.01% | +1.73 |
| UltraShort Consumer Services ProShares (SCC) | +1.22% | +150.77 |
| UltraShort Financials ProShares (SKF) | +1.78% | +220.23 |
| UltraShort Health Care ProShares (RXD) | -0.53% | -65.17 |
| UltraShort Industrials ProShares (SIJ) | -0.06% | -7.72 |
| UltraShort Oil & Gas ProShares (DUG) | -5.35% | -660.66 |
| UltraShort Real Estate ProShares (SRS) | +1.32% | +163.54 |
| UltraShort Semiconductors ProShares (SSG) | +0.51% | +62.84 |
| UltraShort Technology ProShares (REW) | +2.16% | +267.33 |
| UltraShort Utilities ProShares (SDP) | -0.16% | -19.18 |
| Short MSCI Emerging Markets ProShares (EUM) | -1.11% | -137.68 |
| Short MSCI EAFE ProShares (EFZ) | -1.03% | -127.21 |
| UltraShort MSCI EAFE ProShares (EFU) | -1.88% | -232.55 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -2.97% | -366.67 |
| UltraShort MSCI Japan ProShares (EWV) | -2.39% | -294.69 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -0.96% | -118.44 |
| Ultra QQQ ProShares (QLD) | -0.95% | -117.44 |
| Ultra Dow30 ProShares (DDM) | +0.52% | +64.19 |
| Ultra S&P500 ProShares (SSO) | +0.88% | +108.08 |
| Ultra MC400 ProShares (MVV) | +0.03% | +3.67 |
| Ultra SmallCap 600 ProShares (SAA) | +0.27% | +33.29 |
| Ultra Russell 2000 ProShares (UWM) | +0.72% | +88.31 |
| Ultra Russell 1000 Value ProShares (UVG) | +2.31% | +284.88 |
| Ultra Russell 1000 Growth ProShares (UKF) | -0.03% | -4.20 |
| Ultra Russell MidCap Value ProShares (UVU) | +1.60% | +197.89 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.23% | +275.15 |
| Ultra Russell 2000 Value ProShares (UVT) | -0.24% | -30.09 |
| Ultra Russell2000 Growth ProShares (UKK) | +0.29% | +36.18 |
| Ultra Basic Materials ProShares (UYM) | +5.00% | +616.86 |
| Ultra Consumer Goods ProShares (UGE) | +0.40% | +49.42 |
| Ultra Consumer Services ProShares (UCC) | +0.52% | +64.64 |
| Ultra Financials ProShares (UYG) | -2.08% | -257.18 |
| Ultra Health Care ProShares (RXL) | +0.97% | +119.33 |
| Ultra Industrials ProShares (UXI) | -0.61% | -74.84 |
| Ultra Oil & Gas ProShares (DIG) | +5.33% | +658.12 |
| Ultra Real Estate ProShares (URE) | +0.49% | +60.04 |
| Ultra Semiconductors ProShares (USD) | -1.57% | -194.42 |
| Ultra Technology ProShares (ROM) | -1.87% | -231.46 |
| Ultra Utilities ProShares (UPW) | +0.56% | +69.04 |
As for what's coming in the future for alternative energy, we can't release any details at the present time (even for subscribers at the present time, unfortunately). But, you will hear it here first when those details are released in coming months. Of course, subscribers will have first crack at our recommendations in that regard. Just be sure you don't invest in any "buggy whip" manufacturers!
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Monday, February 18, 2008
Recession Fears Fade, But Inflation Fears Rise
Last week, fears of a recession faded despite lingering worries about the subprime meltdown leaking into the municipal bond market. However, the market is now factoring in higher inflation rates due to the massive easing in short term rates by the US Federal Reserve, a solitary move which apparently isn't being matched by other central banks. In fact, most estimates of world growth remain north of 4% and weakness in housing appears unlikely to pull US overall growth rate much below 3% in 2008, although the first half growth rate is expected to hug the zero line, then pick up sharply in the second half.
This is a far cry from 2007, when the Fed was keeping short term interest rates at a relatively high level compared to the Fed model. In fact the Fed had set interest rates at a level consistent with a deflationary policy according to their own published formula. While disregarding their own staff forecast for a slowing economy in 2008, rates were kept artificially high enough to pull the economy down to a standstill rate of growth in the fourth quarter.
It's clear that the Fed suddenly realized their mistake and hit the panic button, dropping rates quicker than had ever been done during the prior administration, something reminiscent of jerky Fed policy moves which had been the hallmark of the Fed before Paul Volcker tamed inflation in the 'Seventies and early 'Eighties. Unfortunately, this Fed appears to be on a similar path of wild moves as it careens from overly-tight to overly-loose. The next move may very well be back to overly-tight if economic data continues to indicate that the recent slowdown was just a blip in the long term uptrend in the economy.
The markets have been trying to price in the next move on the part of the Fed. Starting in June 2007, the market moved from forecasting a year-end 2008 3-month Treasury Bill rate of 5½% to recently forecasting a rate of less than 2½% (3-month Treasury Bills are currently yielding 2.17%). That huge move caused a huge rally in Eurodollars (which move inversely to expected 3-month T-bill rates).
As we said before, no other central bank is aligned with the US Fed on this gamble. Yes, it's a gamble that these moves will pull the economy out of a nosedive without generating runaway inflation. Combined with the stimulus provided by future "helicopter drops" of money on US taxpayers due to be made starting in May, the Fed is running the risk that the economy will surge later this year into an inflationary spiral. Central bankers all over the world are looking at inflationary fires moving higher. For instance, the Reserve Bank of Australia recently released minutes of their last meeting at which they discussed this issue. They came to the conclusion that inflation was the more imminent problem and hiked overnight cash rates to 7%, more than double the current Fed Funds rate of 3% in the US.
History says that when inflation is heating up, sudden and major rate cuts are the worst thing the Fed can do. If history is repeating, investors are going to have a once in a lifetime opportunity to participate in an inflationary spiral similar to the 1970's. That's the kind of economic environment in which fortunes are made by some while the majority sees their savings depleted by declining purchasing power.
The stock and bond markets were closed Monday for a government holiday, but will reopen Tuesday morning. World markets put in inside days (where the highs and lows remained inside Friday's range), but closed near their highs. This suggests that the US cash market will open near its highs Tuesday morning. We don't have an updated Notes page this evening for subscribers, but the weekend Notes does address one way traders can profit from an inflationary spiral. We suspect this will be the first part of an ongoing series.
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Detailed Comments . . . .
Sunday, February 17, 2008
Stocks Advance, But Falter as Auction Rate Money Dries Up
Washington's Birthday holiday will be observed Monday, 18 Feb, in the US and, in the US, only some futures markets will be open for most of the day (with a 6-hour gap in the middle of the day to pay lip service to the holiday). Most think of it as "Presidents Day" because of confusion caused by Richard Nixon, who proposed renaming it (Congress never did). In any case, it's a mercantilist farce of a holiday since virtually all workers have to go to work on this supposed "holiday." Of course, no other global marketplaces honor Washington with a holiday and a minor US holiday may only be an excuse for another global meltdown like January's with US stock and bond buyers away from their desks until Tuesday.
Last week was a rally week in stocks, but it should have been a much more positive week than it turned out to be. The usual suspect, the credit market, once again walloped stocks. This time it was an obscure market called the "Auction Rate" market (something we're sure more than 99% of investors had never heard of before) which provided the angst and a drying up of liquidity.
Wall Street is being a bigger soap opera than the Guiding Light these days. Even CNBC is seeing it that way. While fundamentally the market is undervalued and most company earnings are relatively strong, the financial stocks, previously the largest sector in the market, continue to provide plot twists and turns that shock equities. Last week, the Port Authority of New York suddenly had their bond rates reset from below 5% to above 20% because bond investors balked at rolling them over in the auction market. A rational observer would infer that the market was saying the Port Authority is obviously threatened with going out of business in the near future. But, that rational observer should always remember that while the markets are efficient in some sense, they are almost always irrational. In other words, markets are efficiently insane. Which, of course, makes a complete mockery of the Efficient Market Hypothesis so many academics love.
No, the Port Authority isn't in trouble (but they are having to shell out hundreds of thousands of dollars in interest payments until they arrange an alternative source of financing).
This seize-up in a part of the market which isn't at all related to subprime just shows how mad the markets can be and emphasizes Keynes' advice to the effect that the market can remain irrational longer than you can remain solvent. Sure, some day, maybe soon, the markets will wake up and realize that there are huge bargains to be had, but who knows how long it will take?
Warren Buffet, the immensely rich vulture capitalist from Omaha, wasn't waiting last week. He offered to selectively snap up credit market bargains at clearance sale prices. This is typical Buffet and a good lesson in patience: this is how Buffet got rich. Fading insanity is hard to do without huge pockets, but if anyone has huge pockets, it's Buffet. The monoline insurance companies just laughed at Buffet's cheek, but by the end of the week were being threatened with a possible government takeover by Elliott Spitzer. Buffet may get the last laugh as he buys bond insurance policies at bargain basement prices and then watches their former owners go belly up from the toxic waste they are left with. The only alternative white knights are the investment banks who hold that toxic waste and would have to write down a total of about half a trillion dollars in bad debts should the monoline insurers fail.
This latest seize-up in the credit markets impacts stocks because investors in those markets typically buy stocks with profits they make in the auctions. With no profits because the market has frozen up, stock sellers will find fewer stock bids to support the price structure and we will probably see stocks in a virtual freefall until the auction markets start working again. It's an unfair playing field, but that's what makes for volatility and trading profits. Overall, the trend is dead neutral in stocks and only short term traders are loving it right now.
For at least part of the week last week, though, the uptrend was strong as this week's summary (Friday's closing value compared to last Friday's close) demonstrates that even the latest credit market seize-up didn't take stocks below last week's close:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +1.36% | +166.08 |
| DIAMONDS TRUST SER 1 (DIA) | +1.30% | +158.09 |
| Ultra Dow30 ProShares (DDM) | +2.78% | +339.15 |
| UltraShort Dow30 ProShares (DXD) | -2.78% | -338.22 |
| S&P 500 (index) | +1.42% | +173.00 |
| S& P DEP RECEIPTS (SPY) | +1.56% | +189.50 |
| Ultra S&P500 ProShares (SSO) | +3.24% | +395.24 |
| UltraShort S&P500 ProShares (SDS) | -2.70% | -329.14 |
| NYSE Composite (index) | +1.67% | +203.85 |
| ISHARES NYSE CMP IDX (NYC) | +1.76% | +214.07 |
| S&P SmallCap 600 (index) | +0.22% | +27.07 |
| Ultra SmallCap 600 ProShares (SAA) | +0.25% | +30.57 |
| Short SmallCap 600 ProShares (SBB) | -0.26% | -32.15 |
| UltraShort SmallCap 600 ProShares (SDD) | -1.39% | -169.22 |
| Russell 2000 (index) | +0.47% | +56.82 |
| ISHARE RUS 2000 INDX (IWM) | +0.29% | +34.97 |
| Ultra Russell 2000 ProShares (UWM) | +0.56% | +68.14 |
| UltraShort Russell 2000 ProShares (TWM) | -0.99% | -120.69 |
| NASDAQ-100 (index) | +0.64% | +77.64 |
| NASDAQ 100 TR SER I (QQQQ) | +0.50% | +61.47 |
| Ultra QQQ ProShares (QLD) | +1.42% | +172.80 |
| UltraShort QQQ ProShares (QID) | -1.80% | -218.80 |
| S&P MidCap 400 (index) | +0.18% | +22.40 |
| ISHARE SP MC 400 INX (IJH) | +0.39% | +47.75 |
| Ultra MC400 ProShares (MVV) | +1.02% | +124.46 |
| UltraShort MC400 ProShares (MZZ) | -0.27% | -32.87 |
| Amex Gold (index) | -2.55% | -310.76 |
| MKT VECT GOLD MNRS (GDX) | -1.63% | -198.27 |
| STREETTRACKS GOLD TR (GLD) | -2.03% | -247.66 |
| Semiconductor Sector (index) | -0.62% | -75.93 |
| Ultra Semiconductors ProShares (USD) | -0.55% | -67.02 |
| UltraShort Semiconductors ProShares (SSG) | -1.97% | -240.06 |
| ISHARE DJ FIN SC INX (IYF) | -1.11% | -135.22 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.03% | -3.90 |
| Short Dow30 ProShares (DOG) | -1.32% | -160.54 |
| Short S&P500 ProShares (SH) | -1.48% | -179.98 |
| Short MC400 ProShares (MYY) | -0.23% | -28.33 |
| Short SmallCap 600 ProShares (SBB) | -0.26% | -32.15 |
| Short Russell 2000 ProShares (RWM) | -0.27% | -32.42 |
| UltraShort QQQ ProShares (QID) | -1.80% | -218.80 |
| UltraShort Dow30 ProShares (DXD) | -2.78% | -338.22 |
| UltraShort S&P500 ProShares (SDS) | -2.70% | -329.14 |
| UltraShort MC400 ProShares (MZZ) | -0.27% | -32.87 |
| UltraShort SmallCap 600 ProShares (SDD) | -1.39% | -169.22 |
| UltraShort Russell 2000 ProShares (TWM) | -0.99% | -120.69 |
| UltraShort Russell 1000 Value ProShares (SJF) | -0.98% | -119.56 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -2.92% | -355.36 |
| UltraShort Russell MidCap Value ProShares (SJL) | -1.01% | -122.50 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -2.62% | -318.93 |
| UltraShort Russell 2000 Value ProShares (SJH) | -0.97% | -117.92 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -1.74% | -211.61 |
| UltraShort Basic Materials ProShares (SMN) | -4.71% | -574.31 |
| UltraShort Consumer Goods ProShares (SZK) | -3.33% | -405.19 |
| UltraShort Consumer Services ProShares (SCC) | -2.82% | -342.99 |
| UltraShort Financials ProShares (SKF) | +1.85% | +225.76 |
| UltraShort Health Care ProShares (RXD) | -1.48% | -180.27 |
| UltraShort Industrials ProShares (SIJ) | -3.02% | -367.64 |
| UltraShort Oil & Gas ProShares (DUG) | -9.19% | -1120.01 |
| UltraShort Real Estate ProShares (SRS) | +0.58% | +70.79 |
| UltraShort Semiconductors ProShares (SSG) | -1.97% | -240.06 |
| UltraShort Technology ProShares (REW) | -1.87% | -227.49 |
| UltraShort Utilities ProShares (SDP) | -2.43% | -295.42 |
| Short MSCI Emerging Markets ProShares (EUM) | -4.34% | -528.68 |
| Short MSCI EAFE ProShares (EFZ) | -2.67% | -325.23 |
| UltraShort MSCI EAFE ProShares (EFU) | -6.09% | -741.42 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -8.99% | -1095.57 |
| UltraShort MSCI Japan ProShares (EWV) | -6.80% | -828.79 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -11.88% | -1447.71 |
| Ultra QQQ ProShares (QLD) | +1.42% | +172.80 |
| Ultra Dow30 ProShares (DDM) | +2.78% | +339.15 |
| Ultra S&P500 ProShares (SSO) | +3.24% | +395.24 |
| Ultra MC400 ProShares (MVV) | +1.02% | +124.46 |
| Ultra SmallCap 600 ProShares (SAA) | +0.25% | +30.57 |
| Ultra Russell 2000 ProShares (UWM) | +0.56% | +68.14 |
| Ultra Russell 1000 Value ProShares (UVG) | +1.35% | +164.52 |
| Ultra Russell 1000 Growth ProShares (UKF) | +2.30% | +279.90 |
| Ultra Russell MidCap Value ProShares (UVU) | +1.17% | +142.20 |
| Ultra Russell MidCap Growth ProShares (UKW) | +1.04% | +127.11 |
| Ultra Russell 2000 Value ProShares (UVT) | +0.69% | +83.69 |
| Ultra Russell2000 Growth ProShares (UKK) | +0.95% | +115.31 |
| Ultra Basic Materials ProShares (UYM) | +3.66% | +445.53 |
| Ultra Consumer Goods ProShares (UGE) | +3.11% | +379.00 |
| Ultra Consumer Services ProShares (UCC) | +1.42% | +173.33 |
| Ultra Financials ProShares (UYG) | -2.29% | -278.90 |
| Ultra Health Care ProShares (RXL) | +1.70% | +207.53 |
| Ultra Industrials ProShares (UXI) | +3.37% | +410.21 |
| Ultra Oil & Gas ProShares (DIG) | +10.08% | +1227.50 |
| Ultra Real Estate ProShares (URE) | +0.06% | +7.90 |
| Ultra Semiconductors ProShares (USD) | -0.55% | -67.02 |
| Ultra Technology ProShares (ROM) | +1.62% | +197.02 |
| Ultra Utilities ProShares (UPW) | +2.14% | +260.90 |
Unless the credit markets turn around, that retest of the lows looks to be straight ahead for stocks. The good news is that most investors not only have a great buying opportunity ahead, but the new bull market may be getting started ahead of schedule. The only question is at what price the new bull kicks off.
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Thursday, February 14, 2008
Credit Crunch Jitters Roil Markets
Both stocks and bonds were unnerved by credit market jitters on Thursday and fell sharply. Bonds tumbled and neared an intermediate term support line. A break of that support would likely lead to a deeper fall to chart support at 113 13/32nds. Stocks, which had been generally immune to problems in the bond market (and had, in fact, been moving inversely to bonds) took their cues from the bond market Thursday and tumbled as well, although they stayed well within this week's range.
Options expire Friday, which will likely lead to some temporary moves which will be reversed next week. US cash markets will be closed Monday, making Friday the last day before a three-day weekend, so expect light volume going into the close. After Thursday's hectic session, many traders can use a three-day weekend to recover from this week's volatility:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -1.40% | -175.26 |
| DIAMONDS TRUST SER 1 (DIA) | -1.00% | -125.26 |
| Ultra Dow30 ProShares (DDM) | -2.22% | -279.24 |
| UltraShort Dow30 ProShares (DXD) | +2.21% | +277.24 |
| S&P 500 (index) | -1.30% | -162.59 |
| S& P DEP RECEIPTS (SPY) | -0.88% | -110.45 |
| Ultra S&P500 ProShares (SSO) | -2.27% | -284.60 |
| UltraShort S&P500 ProShares (SDS) | +0.98% | +123.52 |
| NYSE Composite (index) | -1.16% | -145.35 |
| ISHARES NYSE CMP IDX (NYC) | -1.18% | -147.57 |
| S&P SmallCap 600 (index) | -2.15% | -270.08 |
| Ultra SmallCap 600 ProShares (SAA) | -3.30% | -414.59 |
| Short SmallCap 600 ProShares (SBB) | +2.15% | +270.01 |
| UltraShort SmallCap 600 ProShares (SDD) | +3.87% | +485.69 |
| Russell 2000 (index) | -2.17% | -272.80 |
| ISHARE RUS 2000 INDX (IWM) | -2.32% | -291.75 |
| Ultra Russell 2000 ProShares (UWM) | -4.88% | -612.36 |
| UltraShort Russell 2000 ProShares (TWM) | +4.83% | +606.19 |
| NASDAQ-100 (index) | -1.78% | -223.16 |
| NASDAQ 100 TR SER I (QQQQ) | -1.81% | -227.05 |
| Ultra QQQ ProShares (QLD) | -3.16% | -396.39 |
| UltraShort QQQ ProShares (QID) | +3.12% | +391.94 |
| S&P MidCap 400 (index) | -1.58% | -198.73 |
| ISHARE SP MC 400 INX (IJH) | -1.41% | -177.41 |
| Ultra MC400 ProShares (MVV) | -2.75% | -345.36 |
| UltraShort MC400 ProShares (MZZ) | +2.98% | +373.45 |
| Amex Gold (index) | -0.99% | -124.11 |
| MKT VECT GOLD MNRS (GDX) | -0.57% | -70.96 |
| STREETTRACKS GOLD TR (GLD) | +0.30% | +37.89 |
| Semiconductor Sector (index) | -2.81% | -353.27 |
| Ultra Semiconductors ProShares (USD) | -6.03% | -756.77 |
| UltraShort Semiconductors ProShares (SSG) | +5.85% | +734.25 |
| ISHARE DJ FIN SC INX (IYF) | -1.86% | -233.87 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.29% | -36.63 |
| Short Dow30 ProShares (DOG) | +0.65% | +81.95 |
| Short S&P500 ProShares (SH) | +0.89% | +111.63 |
| Short MC400 ProShares (MYY) | +1.47% | +184.48 |
| Short SmallCap 600 ProShares (SBB) | +2.15% | +270.01 |
| Short Russell 2000 ProShares (RWM) | +2.06% | +258.32 |
| UltraShort QQQ ProShares (QID) | +3.12% | +391.94 |
| UltraShort Dow30 ProShares (DXD) | +2.21% | +277.24 |
| UltraShort S&P500 ProShares (SDS) | +0.98% | +123.52 |
| UltraShort MC400 ProShares (MZZ) | +2.98% | +373.45 |
| UltraShort SmallCap 600 ProShares (SDD) | +3.87% | +485.69 |
| UltraShort Russell 2000 ProShares (TWM) | +4.83% | +606.19 |
| UltraShort Russell 1000 Value ProShares (SJF) | +1.05% | +131.79 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +2.84% | +356.51 |
| UltraShort Russell MidCap Value ProShares (SJL) | +1.21% | +152.04 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +4.06% | +509.76 |
| UltraShort Russell 2000 Value ProShares (SJH) | +4.48% | +562.64 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +4.61% | +578.03 |
| UltraShort Basic Materials ProShares (SMN) | -0.47% | -59.05 |
| UltraShort Consumer Goods ProShares (SZK) | +2.18% | +274.04 |
| UltraShort Consumer Services ProShares (SCC) | +2.42% | +303.41 |
| UltraShort Financials ProShares (SKF) | +2.80% | +350.91 |
| UltraShort Health Care ProShares (RXD) | +1.36% | +170.58 |
| UltraShort Industrials ProShares (SIJ) | +2.62% | +328.92 |
| UltraShort Oil & Gas ProShares (DUG) | -0.48% | -60.35 |
| UltraShort Real Estate ProShares (SRS) | +1.95% | +245.39 |
| UltraShort Semiconductors ProShares (SSG) | +5.85% | +734.25 |
| UltraShort Technology ProShares (REW) | +4.58% | +575.39 |
| UltraShort Utilities ProShares (SDP) | +1.78% | +223.44 |
| Short MSCI Emerging Markets ProShares (EUM) | +1.41% | +176.70 |
| Short MSCI EAFE ProShares (EFZ) | +0.22% | +28.03 |
| UltraShort MSCI EAFE ProShares (EFU) | +0.99% | +124.24 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | +2.72% | +341.42 |
| UltraShort MSCI Japan ProShares (EWV) | -1.27% | -159.25 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +2.89% | +362.92 |
| Ultra QQQ ProShares (QLD) | -3.16% | -396.39 |
| Ultra Dow30 ProShares (DDM) | -2.22% | -279.24 |
| Ultra S&P500 ProShares (SSO) | -2.27% | -284.60 |
| Ultra MC400 ProShares (MVV) | -2.75% | -345.36 |
| Ultra SmallCap 600 ProShares (SAA) | -3.30% | -414.59 |
| Ultra Russell 2000 ProShares (UWM) | -4.88% | -612.36 |
| Ultra Russell 1000 Value ProShares (UVG) | -2.16% | -271.57 |
| Ultra Russell 1000 Growth ProShares (UKF) | -1.73% | -217.56 |
| Ultra Russell MidCap Value ProShares (UVU) | -100.00% | -12552.24 |
| Ultra Russell MidCap Growth ProShares (UKW) | -2.08% | -260.79 |
| Ultra Russell 2000 Value ProShares (UVT) | -3.71% | -466.30 |
| Ultra Russell2000 Growth ProShares (UKK) | -3.52% | -442.29 |
| Ultra Basic Materials ProShares (UYM) | +1.13% | +142.27 |
| Ultra Consumer Goods ProShares (UGE) | -2.18% | -273.66 |
| Ultra Consumer Services ProShares (UCC) | -1.45% | -181.92 |
| Ultra Financials ProShares (UYG) | -1.61% | -202.28 |
| Ultra Health Care ProShares (RXL) | -1.22% | -152.96 |
| Ultra Industrials ProShares (UXI) | -2.86% | -359.42 |
| Ultra Oil & Gas ProShares (DIG) | -1.12% | -139.99 |
| Ultra Real Estate ProShares (URE) | -3.13% | -393.37 |
| Ultra Semiconductors ProShares (USD) | -6.03% | -756.77 |
| Ultra Technology ProShares (ROM) | -3.12% | -391.66 |
| Ultra Utilities ProShares (UPW) | -1.48% | -185.20 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Wednesday, February 13, 2008
Helicopters Set to Drop Money on Taxpayers
Fed boss Ben Bernanke is breathing a sign of relief tonight. That's because he's no longer "Helicopter Ben." Several years ago in the last recession, after lowering interest rates to the sub-basement, the Fed was said to have "run out of bullets" and was "pushing on a string." These are typically what you hear at the end of a recession, of course, just when the stock market is about to roar higher in a bull market. The bears are smirking and looking for stocks to go to zero and they usually make ridiculous claims about how the dollar is about to collapse and the economy is locked in a permanent downward spiral. Part and parcel of their ludicrous tirade has to do with the idea that the Fed can't do anything to stimulate the economy because "no one wants to borrow money."
Bernanke apparently was tired of hearing that rubbish and made a statement that said that the Fed could simply drop money from helicopters to get the economy moving if nothing else worked. Well, of course, it never came to that and the economy came roaring back to life soon afterwards. And, the stock market tripled in value in the next five years, turning the bears fervent wish for an economic meltdown into just another one of their persistent bad dreams. But, the nickname "Helicopter Ben" stuck.
The irony now is that the economy hasn't even gone into a recession and Washington is now going to drop "helicopter money" on taxpayers in the form of "tax rebates" to get the economy moving. So, maybe we should now call W "Helicopter George," since the checks are being signed by the free-spending Republican who occupies the White House for another year. Or, maybe we can credit the Democrats who control Congress, with whose help this "generosity" was made possible.
In any case, the best use of the money isn't to go out and spend it on things you don't need. The best use is to save it. After all, don't the economists say that Americans don't save enough? That must be the patriotic thing to do.
Of course, we're sure that the next shoe to drop will be a big tax increase to pay for all this "stimulus." That will come right after the Elections this Fall, of course.
In the meantime, the stock market continued higher on Wednesday:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +1.45% | +178.83 |
| DIAMONDS TRUST SER 1 (DIA) | +1.20% | +148.96 |
| Ultra Dow30 ProShares (DDM) | +2.21% | +272.91 |
| UltraShort Dow30 ProShares (DXD) | -2.04% | -252.47 |
| S&P 500 (index) | +1.20% | +148.88 |
| S& P DEP RECEIPTS (SPY) | +1.02% | +126.49 |
| Ultra S&P500 ProShares (SSO) | +1.88% | +232.56 |
| UltraShort S&P500 ProShares (SDS) | -1.63% | -202.23 |
| NYSE Composite (index) | +1.21% | +149.24 |
| ISHARES NYSE CMP IDX (NYC) | +1.53% | +189.90 |
| S&P SmallCap 600 (index) | +2.05% | +253.76 |
| Ultra SmallCap 600 ProShares (SAA) | +3.95% | +488.18 |
| Short SmallCap 600 ProShares (SBB) | -2.03% | -250.87 |
| UltraShort SmallCap 600 ProShares (SDD) | -4.01% | -496.14 |
| Russell 2000 (index) | +2.23% | +276.41 |
| ISHARE RUS 2000 INDX (IWM) | +2.05% | +253.06 |
| Ultra Russell 2000 ProShares (UWM) | +4.51% | +557.78 |
| UltraShort Russell 2000 ProShares (TWM) | -3.84% | -475.02 |
| NASDAQ-100 (index) | +2.10% | +259.90 |
| NASDAQ 100 TR SER I (QQQQ) | +2.19% | +271.07 |
| Ultra QQQ ProShares (QLD) | +3.56% | +440.98 |
| UltraShort QQQ ProShares (QID) | -3.90% | -482.90 |
| S&P MidCap 400 (index) | +1.27% | +156.63 |
| ISHARE SP MC 400 INX (IJH) | +1.20% | +149.04 |
| Ultra MC400 ProShares (MVV) | +2.30% | +284.45 |
| UltraShort MC400 ProShares (MZZ) | -2.25% | -277.90 |
| Amex Gold (index) | +1.69% | +209.41 |
| MKT VECT GOLD MNRS (GDX) | +1.86% | +229.58 |
| STREETTRACKS GOLD TR (GLD) | +0.12% | +15.24 |
| Semiconductor Sector (index) | +3.02% | +374.20 |
| Ultra Semiconductors ProShares (USD) | +6.50% | +804.69 |
| UltraShort Semiconductors ProShares (SSG) | -6.68% | -826.61 |
| ISHARE DJ FIN SC INX (IYF) | +0.95% | +117.06 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -1.69% | -209.05 |
| Short Dow30 ProShares (DOG) | -1.51% | -186.30 |
| Short S&P500 ProShares (SH) | -1.45% | -179.49 |
| Short MC400 ProShares (MYY) | -1.39% | -171.61 |
| Short SmallCap 600 ProShares (SBB) | -2.03% | -250.87 |
| Short Russell 2000 ProShares (RWM) | -2.53% | -313.01 |
| UltraShort QQQ ProShares (QID) | -3.90% | -482.90 |
| UltraShort Dow30 ProShares (DXD) | -2.04% | -252.47 |
| UltraShort S&P500 ProShares (SDS) | -1.63% | -202.23 |
| UltraShort MC400 ProShares (MZZ) | -2.25% | -277.90 |
| UltraShort SmallCap 600 ProShares (SDD) | -4.01% | -496.14 |
| UltraShort Russell 2000 ProShares (TWM) | -3.84% | -475.02 |
| UltraShort Russell 1000 Value ProShares (SJF) | -2.41% | -297.73 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -3.88% | -480.44 |
| UltraShort Russell MidCap Value ProShares (SJL) | -0.98% | -121.66 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -3.15% | -389.35 |
| UltraShort Russell 2000 Value ProShares (SJH) | -4.20% | -519.93 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -4.90% | -606.00 |
| UltraShort Basic Materials ProShares (SMN) | -2.89% | -357.01 |
| UltraShort Consumer Goods ProShares (SZK) | -1.07% | -132.75 |
| UltraShort Consumer Services ProShares (SCC) | -2.28% | -282.65 |
| UltraShort Financials ProShares (SKF) | -0.55% | -67.68 |
| UltraShort Health Care ProShares (RXD) | -1.34% | -165.89 |
| UltraShort Industrials ProShares (SIJ) | -3.99% | -493.08 |
| UltraShort Oil & Gas ProShares (DUG) | -4.48% | -554.03 |
| UltraShort Real Estate ProShares (SRS) | -0.36% | -44.63 |
| UltraShort Semiconductors ProShares (SSG) | -6.68% | -826.61 |
| UltraShort Technology ProShares (REW) | -5.83% | -721.24 |
| UltraShort Utilities ProShares (SDP) | -0.66% | -81.52 |
| Short MSCI Emerging Markets ProShares (EUM) | -2.51% | -310.04 |
| Short MSCI EAFE ProShares (EFZ) | -0.79% | -97.48 |
| UltraShort MSCI EAFE ProShares (EFU) | -1.59% | -196.36 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -4.77% | -590.25 |
| UltraShort MSCI Japan ProShares (EWV) | +0.88% | +108.87 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -2.41% | -297.95 |
| Ultra QQQ ProShares (QLD) | +3.56% | +440.98 |
| Ultra Dow30 ProShares (DDM) | +2.21% | +272.91 |
| Ultra S&P500 ProShares (SSO) | +1.88% | +232.56 |
| Ultra MC400 ProShares (MVV) | +2.30% | +284.45 |
| Ultra SmallCap 600 ProShares (SAA) | +3.95% | +488.18 |
| Ultra Russell 2000 ProShares (UWM) | +4.51% | +557.78 |
| Ultra Russell 1000 Value ProShares (UVG) | +2.23% | +276.09 |
| Ultra Russell 1000 Growth ProShares (UKF) | +3.03% | +374.57 |
| Ultra Russell MidCap Value ProShares (UVU) | +0.49% | +60.10 |
| Ultra Russell MidCap Growth ProShares (UKW) | +3.78% | +467.42 |
| Ultra Russell 2000 Value ProShares (UVT) | +3.81% | +471.20 |
| Ultra Russell2000 Growth ProShares (UKK) | +4.99% | +617.48 |
| Ultra Basic Materials ProShares (UYM) | +0.92% | +113.50 |
| Ultra Consumer Goods ProShares (UGE) | +1.60% | +197.94 |
| Ultra Consumer Services ProShares (UCC) | -0.24% | -30.23 |
| Ultra Financials ProShares (UYG) | -0.71% | -88.38 |
| Ultra Health Care ProShares (RXL) | +0.78% | +96.70 |
| Ultra Industrials ProShares (UXI) | +4.37% | +540.59 |
| Ultra Oil & Gas ProShares (DIG) | +5.14% | +635.81 |
| Ultra Real Estate ProShares (URE) | +1.28% | +158.68 |
| Ultra Semiconductors ProShares (USD) | +6.50% | +804.69 |
| Ultra Technology ProShares (ROM) | +4.70% | +581.20 |
| Ultra Utilities ProShares (UPW) | +0.74% | +91.09 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Tuesday, February 12, 2008
Buffet Bolsters Bulls
Warren Buffet made a phone call Tuesday morning and sent the stock market soaring. Speaking to Becky Quick on CNBC, he announced that he had made an offer to the bond insurance companies to take their municipal bond business off their hands. While this really doesn't solve any of the subprime mortgage mess, it did scare the bears into covering their shorts. That sent the blue chips up, but didn't do anything for the market leaders of the last few days. In fact, they either declined or barely moved. But, it did send the Dow up more than 200 points for the second day in a row.
Buffet is no white knight and he's doing what has made his reputation as well as his fortune: looking out for number 1. Another not-so-nice name is "vulture capitalist." Buffet would love to buy the municipal bond insurance risk -- there's very little risk in insuring municipal bonds. But, he wouldn't dare touch the toxic waste which started the whole problem. And, therein lies the problem. If the bond insurance companies sell their core business, the ratings companies will surely downgrade them. And, if they are downgraded, the banks which hold the subprime paper will be forced to take that toxic waste onto their books. In other words, Buffet may be doing more harm than good near term.
In any case, the market seemed to think that any action is better than no action. There's a point there, but the cure may be worse than the illness. Here's how the stock market ended Tuesday:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +1.09% | +133.40 |
| DIAMONDS TRUST SER 1 (DIA) | +1.19% | +145.09 |
| Ultra Dow30 ProShares (DDM) | +2.20% | +269.09 |
| UltraShort Dow30 ProShares (DXD) | -2.34% | -285.97 |
| S&P 500 (index) | +0.79% | +96.46 |
| S& P DEP RECEIPTS (SPY) | +0.90% | +110.71 |
| Ultra S&P500 ProShares (SSO) | +1.74% | +212.60 |
| UltraShort S&P500 ProShares (SDS) | -1.53% | -187.43 |
| NYSE Composite (index) | +1.09% | +133.98 |
| ISHARES NYSE CMP IDX (NYC) | +1.32% | +161.63 |
| S&P SmallCap 600 (index) | +0.70% | +86.03 |
| Ultra SmallCap 600 ProShares (SAA) | +1.91% | +234.25 |
| Short SmallCap 600 ProShares (SBB) | -0.61% | -74.64 |
| UltraShort SmallCap 600 ProShares (SDD) | -1.51% | -184.38 |
| Russell 2000 (index) | +0.88% | +107.26 |
| ISHARE RUS 2000 INDX (IWM) | +1.19% | +146.01 |
| Ultra Russell 2000 ProShares (UWM) | +2.42% | +296.13 |
| UltraShort Russell 2000 ProShares (TWM) | -2.42% | -295.83 |
| NASDAQ-100 (index) | -0.55% | -67.41 |
| NASDAQ 100 TR SER I (QQQQ) | -0.57% | -69.44 |
| Ultra QQQ ProShares (QLD) | -0.74% | -90.00 |
| UltraShort QQQ ProShares (QID) | +0.59% | +72.44 |
| S&P MidCap 400 (index) | +0.20% | +24.98 |
| ISHARE SP MC 400 INX (IJH) | +0.31% | +38.51 |
| Ultra MC400 ProShares (MVV) | +0.38% | +47.08 |
| UltraShort MC400 ProShares (MZZ) | -0.85% | -103.93 |
| Amex Gold (index) | -3.21% | -393.50 |
| MKT VECT GOLD MNRS (GDX) | -3.62% | -442.80 |
| STREETTRACKS GOLD TR (GLD) | -2.19% | -268.04 |
| Semiconductor Sector (index) | -0.66% | -80.64 |
| Ultra Semiconductors ProShares (USD) | -1.50% | -183.61 |
| UltraShort Semiconductors ProShares (SSG) | +0.72% | +88.13 |
| ISHARE DJ FIN SC INX (IYF) | +1.18% | +143.98 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +1.39% | +170.11 |
| Short Dow30 ProShares (DOG) | -0.67% | -81.99 |
| Short S&P500 ProShares (SH) | -0.48% | -58.90 |
| Short MC400 ProShares (MYY) | +0.02% | +1.91 |
| Short SmallCap 600 ProShares (SBB) | -0.61% | -74.64 |
| Short Russell 2000 ProShares (RWM) | -0.60% | -73.06 |
| UltraShort QQQ ProShares (QID) | +0.59% | +72.44 |
| UltraShort Dow30 ProShares (DXD) | -2.34% | -285.97 |
| UltraShort S&P500 ProShares (SDS) | -1.53% | -187.43 |
| UltraShort MC400 ProShares (MZZ) | -0.85% | -103.93 |
| UltraShort SmallCap 600 ProShares (SDD) | -1.51% | -184.38 |
| UltraShort Russell 2000 ProShares (TWM) | -2.42% | -295.83 |
| UltraShort Russell 1000 Value ProShares (SJF) | -1.85% | -226.82 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +0.23% | +27.64 |
| UltraShort Russell MidCap Value ProShares (SJL) | -0.79% | -97.09 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -0.50% | -61.70 |
| UltraShort Russell 2000 Value ProShares (SJH) | -1.56% | -190.94 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -1.45% | -177.09 |
| UltraShort Basic Materials ProShares (SMN) | +0.60% | +74.02 |
| UltraShort Consumer Goods ProShares (SZK) | -1.86% | -227.23 |
| UltraShort Consumer Services ProShares (SCC) | +0.20% | +24.48 |
| UltraShort Financials ProShares (SKF) | -2.66% | -325.82 |
| UltraShort Health Care ProShares (RXD) | -1.74% | -213.37 |
| UltraShort Industrials ProShares (SIJ) | -1.10% | -134.32 |
| UltraShort Oil & Gas ProShares (DUG) | -0.32% | -39.22 |
| UltraShort Real Estate ProShares (SRS) | -4.45% | -544.24 |
| UltraShort Semiconductors ProShares (SSG) | +0.72% | +88.13 |
| UltraShort Technology ProShares (REW) | +0.78% | +94.96 |
| UltraShort Utilities ProShares (SDP) | -2.24% | -273.84 |
| Short MSCI Emerging Markets ProShares (EUM) | -1.50% | -183.68 |
| Short MSCI EAFE ProShares (EFZ) | -1.73% | -211.72 |
| UltraShort MSCI EAFE ProShares (EFU) | -4.15% | -508.45 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -3.06% | -374.11 |
| UltraShort MSCI Japan ProShares (EWV) | -2.69% | -329.38 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -5.07% | -620.01 |
| Ultra QQQ ProShares (QLD) | -0.74% | -90.00 |
| Ultra Dow30 ProShares (DDM) | +2.20% | +269.09 |
| Ultra S&P500 ProShares (SSO) | +1.74% | +212.60 |
| Ultra MC400 ProShares (MVV) | +0.38% | +47.08 |
| Ultra SmallCap 600 ProShares (SAA) | +1.91% | +234.25 |
| Ultra Russell 2000 ProShares (UWM) | +2.42% | +296.13 |
| Ultra Russell 1000 Value ProShares (UVG) | +2.16% | +264.33 |
| Ultra Russell 1000 Growth ProShares (UKF) | +0.31% | +37.58 |
| Ultra Russell MidCap Value ProShares (UVU) | +1.92% | +234.47 |
| Ultra Russell MidCap Growth ProShares (UKW) | +0.16% | +19.66 |
| Ultra Russell 2000 Value ProShares (UVT) | +1.97% | +240.65 |
| Ultra Russell2000 Growth ProShares (UKK) | +1.39% | +169.77 |
| Ultra Basic Materials ProShares (UYM) | -0.56% | -68.92 |
| Ultra Consumer Goods ProShares (UGE) | +1.10% | +135.15 |
| Ultra Consumer Services ProShares (UCC) | +1.97% | +241.45 |
| Ultra Financials ProShares (UYG) | +3.61% | +442.06 |
| Ultra Health Care ProShares (RXL) | +2.48% | +304.10 |
| Ultra Industrials ProShares (UXI) | +0.92% | +112.43 |
| Ultra Oil & Gas ProShares (DIG) | +0.10% | +12.68 |
| Ultra Real Estate ProShares (URE) | +3.62% | +443.24 |
| Ultra Semiconductors ProShares (USD) | -1.50% | -183.61 |
| Ultra Technology ProShares (ROM) | -0.96% | -117.73 |
| Ultra Utilities ProShares (UPW) | +1.68% | +205.73 |
While Warren Buffet may not be the white knight, there is one waiting in the wings. We discuss just who that white knight may be and why he may rescue the market in the near future in our Notes linked below for subscribers.
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Monday, February 11, 2008
Bad Money Drives Out Good Money
Stocks advanced on a trend basis Monday as the morning dip simply provided traders with another opportunity to buy for an intraday rally that covered almost 200 points from low to high. The trend is definitely up and in an uptrend, buying dips is the right thing for traders to do. The media continues to hammer the public with bad news in an attempt to separate the weak hands from their shares -- and into the strong hands, of course.
One thing that's a given is that bad money drives out good money, which is known as Gresham's Law. We have a great example of that coming out of Washington nowadays with the gang there rewarding "bad money" and penalizing "good money." Scott Burns had a good column last weekend on exactly why that is and it's worth a read. In summary, homeowners in places which didn't participate in the real estate bubble get less money for mortgages, while homeowners in places which went into a paroxysm of speculative excess are rewarded with government handouts. Which just proves that the way to get ahead is not to work productively, but try to game the system to get money from the government. It's social welfare for the worst kind of risk-taking behavior. That's because banks won't loan businesses money without collateral and most small businesses are extended credit with real estate as collateral. So, when real estate "values" bubble up, loans to businesses are easy. This reward for bubble markets skews the economics of small business in particular, rewarding those who start businesses in bubble real estate markets and discriminating against businesses where real estate investors haven't gone berserk bidding prices higher.
Some think the government should instead consider giving money to stock market investors as compensation for their shares going down in price. Of course, if the stock market keeps going up, the government can just send all that money to the real estate speculators. Stock market investors will not have any losses to report at this rate:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.48% | +57.88 |
| DIAMONDS TRUST SER 1 (DIA) | +0.47% | +57.03 |
| Ultra Dow30 ProShares (DDM) | +1.05% | +128.47 |
| UltraShort Dow30 ProShares (DXD) | -0.85% | -103.75 |
| S&P 500 (index) | +0.59% | +71.58 |
| S& P DEP RECEIPTS (SPY) | +0.53% | +65.00 |
| Ultra S&P500 ProShares (SSO) | +1.50% | +182.28 |
| UltraShort S&P500 ProShares (SDS) | -1.19% | -144.82 |
| NYSE Composite (index) | +0.51% | +62.35 |
| ISHARES NYSE CMP IDX (NYC) | +0.27% | +33.17 |
| S&P SmallCap 600 (index) | +0.25% | +30.04 |
| Ultra SmallCap 600 ProShares (SAA) | -0.14% | -16.46 |
| Short SmallCap 600 ProShares (SBB) | -0.47% | -57.86 |
| UltraShort SmallCap 600 ProShares (SDD) | -0.24% | -29.23 |
| Russell 2000 (index) | +0.08% | +10.28 |
| ISHARE RUS 2000 INDX (IWM) | -0.13% | -15.74 |
| Ultra Russell 2000 ProShares (UWM) | -0.92% | -111.94 |
| UltraShort Russell 2000 ProShares (TWM) | -0.02% | -2.94 |
| NASDAQ-100 (index) | +1.25% | +152.74 |
| NASDAQ 100 TR SER I (QQQQ) | +1.08% | +131.32 |
| Ultra QQQ ProShares (QLD) | +2.24% | +273.02 |
| UltraShort QQQ ProShares (QID) | -2.11% | -256.44 |
| S&P MidCap 400 (index) | +0.57% | +69.80 |
| ISHARE SP MC 400 INX (IJH) | +0.47% | +57.00 |
| Ultra MC400 ProShares (MVV) | +1.56% | +190.35 |
| UltraShort MC400 ProShares (MZZ) | -0.94% | -114.07 |
| Amex Gold (index) | +0.04% | +4.64 |
| MKT VECT GOLD MNRS (GDX) | +0.23% | +27.61 |
| STREETTRACKS GOLD TR (GLD) | +0.36% | +44.18 |
| Semiconductor Sector (index) | +1.55% | +188.79 |
| Ultra Semiconductors ProShares (USD) | +4.38% | +533.58 |
| UltraShort Semiconductors ProShares (SSG) | -4.73% | -575.83 |
| ISHARE DJ FIN SC INX (IYF) | -1.79% | -218.01 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.91% | -111.19 |
| Short Dow30 ProShares (DOG) | -0.48% | -58.55 |
| Short S&P500 ProShares (SH) | -0.76% | -92.72 |
| Short MC400 ProShares (MYY) | -0.53% | -64.22 |
| Short SmallCap 600 ProShares (SBB) | -0.47% | -57.86 |
| Short Russell 2000 ProShares (RWM) | -0.22% | -26.25 |
| UltraShort QQQ ProShares (QID) | -2.11% | -256.44 |
| UltraShort Dow30 ProShares (DXD) | -0.85% | -103.75 |
| UltraShort S&P500 ProShares (SDS) | -1.19% | -144.82 |
| UltraShort MC400 ProShares (MZZ) | -0.94% | -114.07 |
| UltraShort SmallCap 600 ProShares (SDD) | -0.24% | -29.23 |
| UltraShort Russell 2000 ProShares (TWM) | -0.02% | -2.94 |
| UltraShort Russell 1000 Value ProShares (SJF) | +0.99% | +120.95 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -1.95% | -237.96 |
| UltraShort Russell MidCap Value ProShares (SJL) | -0.20% | -24.76 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -2.79% | -339.35 |
| UltraShort Russell 2000 Value ProShares (SJH) | +0.18% | +22.11 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -0.78% | -95.52 |
| UltraShort Basic Materials ProShares (SMN) | -3.99% | -486.61 |
| UltraShort Consumer Goods ProShares (SZK) | -2.01% | -244.77 |
| UltraShort Consumer Services ProShares (SCC) | -2.91% | -354.82 |
| UltraShort Financials ProShares (SKF) | +3.39% | +413.52 |
| UltraShort Health Care ProShares (RXD) | +0.19% | +22.74 |
| UltraShort Industrials ProShares (SIJ) | -1.88% | -229.09 |
| UltraShort Oil & Gas ProShares (DUG) | -4.81% | -586.55 |
| UltraShort Real Estate ProShares (SRS) | +3.76% | +457.44 |
| UltraShort Semiconductors ProShares (SSG) | -4.73% | -575.83 |
| UltraShort Technology ProShares (REW) | -2.33% | -283.54 |
| UltraShort Utilities ProShares (SDP) | -0.64% | -77.96 |
| Short MSCI Emerging Markets ProShares (EUM) | -1.15% | -140.39 |
| Short MSCI EAFE ProShares (EFZ) | -0.13% | -16.19 |
| UltraShort MSCI EAFE ProShares (EFU) | -0.82% | -100.12 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -2.53% | -307.62 |
| UltraShort MSCI Japan ProShares (EWV) | -1.95% | -237.75 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +1.12% | +136.46 |
| Ultra QQQ ProShares (QLD) | +2.24% | +273.02 |
| Ultra Dow30 ProShares (DDM) | +1.05% | +128.47 |
| Ultra S&P500 ProShares (SSO) | +1.50% | +182.28 |
| Ultra MC400 ProShares (MVV) | +1.56% | +190.35 |
| Ultra SmallCap 600 ProShares (SAA) | -0.14% | -16.46 |
| Ultra Russell 2000 ProShares (UWM) | -0.92% | -111.94 |
| Ultra Russell 1000 Value ProShares (UVG) | +0.81% | +98.22 |
| Ultra Russell 1000 Growth ProShares (UKF) | +2.04% | +248.10 |
| Ultra Russell MidCap Value ProShares (UVU) | +0.43% | +52.67 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.56% | +312.19 |
| Ultra Russell 2000 Value ProShares (UVT) | -0.17% | -20.92 |
| Ultra Russell2000 Growth ProShares (UKK) | +0.95% | +115.31 |
| Ultra Basic Materials ProShares (UYM) | +3.10% | +377.64 |
| Ultra Consumer Goods ProShares (UGE) | +2.06% | +251.38 |
| Ultra Consumer Services ProShares (UCC) | +2.27% | +276.81 |
| Ultra Financials ProShares (UYG) | -4.52% | -550.92 |
| Ultra Health Care ProShares (RXL) | +0.21% | +25.94 |
| Ultra Industrials ProShares (UXI) | +2.30% | +280.47 |
| Ultra Oil & Gas ProShares (DIG) | +5.12% | +623.33 |
| Ultra Real Estate ProShares (URE) | -2.37% | -288.45 |
| Ultra Semiconductors ProShares (USD) | +4.38% | +533.58 |
| Ultra Technology ProShares (ROM) | +2.75% | +334.93 |
| Ultra Utilities ProShares (UPW) | +1.09% | +132.19 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Sunday, February 10, 2008
The Trend is Up
Last week's minor pullback in stocks was needed after the big rally which started in late January. Profit-taking was the reason and, now that that's over, the market is free to rally ahead into options expiration this coming Friday. Although the week ended down, it retraced little more than half of the preceding rally and that's a sign that there is an uptrend in place.
Another sign of strength came in the New Low category. The NYSE had recorded 947 new 52-week lows at the January bottom. Last week's pullback saw a maximum of only 41 new lows. That's a huge improvement. Breadth is also turning up as the advance-decline of common stocks is diverging bullishly against the indices. NASDAQ is also showing improving breadth and Friday's new low figures marked a higher low than Thursday's.
But, Friday was a down day for most indices:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.53% | -64.87 |
| DIAMONDS TRUST SER 1 (DIA) | -0.80% | -97.79 |
| Ultra Dow30 ProShares (DDM) | -1.48% | -181.52 |
| UltraShort Dow30 ProShares (DXD) | +1.22% | +149.92 |
| S&P 500 (index) | -0.45% | -55.42 |
| S& P DEP RECEIPTS (SPY) | -0.64% | -78.64 |
| Ultra S&P500 ProShares (SSO) | -1.56% | -191.11 |
| UltraShort S&P500 ProShares (SDS) | +0.86% | +104.89 |
| NYSE Composite (index) | -0.41% | -49.66 |
| ISHARES NYSE CMP IDX (NYC) | -0.39% | -48.31 |
| S&P SmallCap 600 (index) | -0.36% | -43.98 |
| Ultra SmallCap 600 ProShares (SAA) | +0.58% | +71.34 |
| Short SmallCap 600 ProShares (SBB) | +0.34% | +42.16 |
| UltraShort SmallCap 600 ProShares (SDD) | +0.83% | +101.36 |
| Russell 2000 (index) | -0.55% | -67.09 |
| ISHARE RUS 2000 INDX (IWM) | -0.63% | -76.86 |
| Ultra Russell 2000 ProShares (UWM) | -1.05% | -128.30 |
| UltraShort Russell 2000 ProShares (TWM) | +2.17% | +266.07 |
| NASDAQ-100 (index) | +0.94% | +115.46 |
| NASDAQ 100 TR SER I (QQQQ) | +1.14% | +139.20 |
| Ultra QQQ ProShares (QLD) | +1.29% | +158.37 |
| UltraShort QQQ ProShares (QID) | -0.90% | -110.16 |
| S&P MidCap 400 (index) | +0.18% | +22.09 |
| ISHARE SP MC 400 INX (IJH) | +0.24% | +29.50 |
| Ultra MC400 ProShares (MVV) | -0.33% | -40.35 |
| UltraShort MC400 ProShares (MZZ) | +0.22% | +27.27 |
| Amex Gold (index) | +3.52% | +431.51 |
| MKT VECT GOLD MNRS (GDX) | +3.59% | +439.07 |
| STREETTRACKS GOLD TR (GLD) | +1.28% | +156.75 |
| Semiconductor Sector (index) | +0.63% | +77.17 |
| Ultra Semiconductors ProShares (USD) | +3.32% | +406.98 |
| UltraShort Semiconductors ProShares (SSG) | -2.04% | -249.88 |
| ISHARE DJ FIN SC INX (IYF) | -2.02% | -247.36 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.87% | -106.92 |
| Short Dow30 ProShares (DOG) | +0.80% | +97.61 |
| Short S&P500 ProShares (SH) | +0.65% | +79.10 |
| Short MC400 ProShares (MYY) | +0.37% | +45.74 |
| Short SmallCap 600 ProShares (SBB) | +0.34% | +42.16 |
| Short Russell 2000 ProShares (RWM) | +0.90% | +109.61 |
| UltraShort QQQ ProShares (QID) | -0.90% | -110.16 |
| UltraShort Dow30 ProShares (DXD) | +1.22% | +149.92 |
| UltraShort S&P500 ProShares (SDS) | +0.86% | +104.89 |
| UltraShort MC400 ProShares (MZZ) | +0.22% | +27.27 |
| UltraShort SmallCap 600 ProShares (SDD) | +0.83% | +101.36 |
| UltraShort Russell 2000 ProShares (TWM) | +2.17% | +266.07 |
| UltraShort Russell 1000 Value ProShares (SJF) | +0.93% | +114.26 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -0.52% | -63.46 |
| UltraShort Russell MidCap Value ProShares (SJL) | +0.14% | +17.06 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -0.08% | -9.47 |
| UltraShort Russell 2000 Value ProShares (SJH) | +2.15% | +263.63 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +0.14% | +17.75 |
| UltraShort Basic Materials ProShares (SMN) | -3.58% | -438.76 |
| UltraShort Consumer Goods ProShares (SZK) | +1.94% | +237.28 |
| UltraShort Consumer Services ProShares (SCC) | +1.42% | +174.19 |
| UltraShort Financials ProShares (SKF) | +4.19% | +512.73 |
| UltraShort Health Care ProShares (RXD) | +2.17% | +265.22 |
| UltraShort Industrials ProShares (SIJ) | +1.01% | +123.82 |
| UltraShort Oil & Gas ProShares (DUG) | -2.86% | -349.91 |
| UltraShort Real Estate ProShares (SRS) | +4.88% | +597.13 |
| UltraShort Semiconductors ProShares (SSG) | -2.04% | -249.88 |
| UltraShort Technology ProShares (REW) | -2.87% | -350.93 |
| UltraShort Utilities ProShares (SDP) | +0.47% | +58.02 |
| Short MSCI Emerging Markets ProShares (EUM) | -0.40% | -49.35 |
| Short MSCI EAFE ProShares (EFZ) | +0.57% | +69.93 |
| UltraShort MSCI EAFE ProShares (EFU) | +1.63% | +199.41 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | +1.22% | +149.66 |
| UltraShort MSCI Japan ProShares (EWV) | +4.14% | +507.57 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +2.53% | +309.44 |
| Ultra QQQ ProShares (QLD) | +1.29% | +158.37 |
| Ultra Dow30 ProShares (DDM) | -1.48% | -181.52 |
| Ultra S&P500 ProShares (SSO) | -1.56% | -191.11 |
| Ultra MC400 ProShares (MVV) | -0.33% | -40.35 |
| Ultra SmallCap 600 ProShares (SAA) | +0.58% | +71.34 |
| Ultra Russell 2000 ProShares (UWM) | -1.05% | -128.30 |
| Ultra Russell 1000 Value ProShares (UVG) | -2.40% | -293.95 |
| Ultra Russell 1000 Growth ProShares (UKF) | +0.23% | +27.78 |
| Ultra Russell MidCap Value ProShares (UVU) | +1.47% | +179.98 |
| Ultra Russell MidCap Growth ProShares (UKW) | +0.44% | +54.04 |
| Ultra Russell 2000 Value ProShares (UVT) | -1.69% | -206.78 |
| Ultra Russell2000 Growth ProShares (UKK) | -1.15% | -140.85 |
| Ultra Basic Materials ProShares (UYM) | +5.37% | +657.75 |
| Ultra Consumer Goods ProShares (UGE) | -1.32% | -161.14 |
| Ultra Consumer Services ProShares (UCC) | -1.09% | -133.76 |
| Ultra Financials ProShares (UYG) | -3.96% | -485.36 |
| Ultra Health Care ProShares (RXL) | -2.63% | -322.29 |
| Ultra Industrials ProShares (UXI) | +0.39% | +48.14 |
| Ultra Oil & Gas ProShares (DIG) | +3.21% | +392.94 |
| Ultra Real Estate ProShares (URE) | -5.81% | -710.95 |
| Ultra Semiconductors ProShares (USD) | +3.32% | +406.98 |
| Ultra Technology ProShares (ROM) | +1.94% | +237.81 |
| Ultra Utilities ProShares (UPW) | -0.38% | -47.03 |
Long term investors have a wonderful opportunity here to buy bargain stocks. Of course, we doubt very many are. After all, not everybody can get rich in the stock market!
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Thursday, February 07, 2008
Market Rallies After Hitting a Cycle Low
Thursday was a good day for us. Our profits on the yield curve steepening trade jumped to $11,624 per unit, with $8,312 in closed profits so far. We are using trailing stop orders to take profits on the open portion of the position. We have a 157% profit (based upon outright margin required) on this trade initiated on the 22nd of January.
Stocks rallied Thursday after forming a short term cycle low on the opening. The broad market led the way higher, teasing the blue chips to follow. That's a sign of a bull market, by the way. The fact that the media is still talking about a bear market is a sure sign it isn't one, even if it once was.
The media is a great contrary indicator. Typically, the most popular business magazines will publish a picture of a bear on their covers right at the beginning of bull markets. They forget that the single best investment over decades has always been the stock market, which historically has a positive return after inflation. The gold bugs hate to admit it, but that most sancrosant investment of theirs has a horribly negative return over any period of time longer than five years.
After putting in a cycle low Thursday morning, stocks stabilized and advanced into the close, just as we told subscribers they would do:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.38% | +46.90 |
| DIAMONDS TRUST SER 1 (DIA) | +0.38% | +46.90 |
| Ultra Dow30 ProShares (DDM) | +0.89% | +109.13 |
| UltraShort Dow30 ProShares (DXD) | -0.77% | -93.93 |
| S&P 500 (index) | +0.89% | +109.17 |
| S& P DEP RECEIPTS (SPY) | +0.66% | +80.69 |
| Ultra S&P500 ProShares (SSO) | +1.51% | +184.22 |
| UltraShort S&P500 ProShares (SDS) | -1.15% | -140.84 |
| NYSE Composite (index) | +0.46% | +56.63 |
| ISHARES NYSE CMP IDX (NYC) | +0.48% | +58.93 |
| S&P SmallCap 600 (index) | +1.35% | +164.93 |
| Ultra SmallCap 600 ProShares (SAA) | +0.94% | +114.78 |
| Short SmallCap 600 ProShares (SBB) | -1.27% | -154.69 |
| UltraShort SmallCap 600 ProShares (SDD) | -3.14% | -383.65 |
| Russell 2000 (index) | +1.49% | +181.29 |
| ISHARE RUS 2000 INDX (IWM) | +1.67% | +203.45 |
| Ultra Russell 2000 ProShares (UWM) | +2.76% | +337.03 |
| UltraShort Russell 2000 ProShares (TWM) | -3.10% | -377.97 |
| NASDAQ-100 (index) | +1.05% | +128.52 |
| NASDAQ 100 TR SER I (QQQQ) | +0.70% | +85.49 |
| Ultra QQQ ProShares (QLD) | +2.05% | +250.44 |
| UltraShort QQQ ProShares (QID) | -2.59% | -316.15 |
| S&P MidCap 400 (index) | +1.04% | +126.59 |
| ISHARE SP MC 400 INX (IJH) | +0.95% | +115.52 |
| Ultra MC400 ProShares (MVV) | +2.36% | +287.99 |
| UltraShort MC400 ProShares (MZZ) | -1.38% | -168.41 |
| Amex Gold (index) | -0.13% | -15.82 |
| MKT VECT GOLD MNRS (GDX) | -0.09% | -10.41 |
| STREETTRACKS GOLD TR (GLD) | +1.01% | +123.44 |
| Semiconductor Sector (index) | +0.18% | +22.51 |
| Ultra Semiconductors ProShares (USD) | +1.67% | +203.38 |
| UltraShort Semiconductors ProShares (SSG) | -1.55% | -189.30 |
| ISHARE DJ FIN SC INX (IYF) | +1.68% | +205.12 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.94% | -115.09 |
| Short Dow30 ProShares (DOG) | -0.71% | -87.08 |
| Short S&P500 ProShares (SH) | -0.98% | -119.75 |
| Short MC400 ProShares (MYY) | -1.56% | -190.63 |
| Short SmallCap 600 ProShares (SBB) | -1.27% | -154.69 |
| Short Russell 2000 ProShares (RWM) | -1.81% | -220.57 |
| UltraShort QQQ ProShares (QID) | -2.59% | -316.15 |
| UltraShort Dow30 ProShares (DXD) | -0.77% | -93.93 |
| UltraShort S&P500 ProShares (SDS) | -1.15% | -140.84 |
| UltraShort MC400 ProShares (MZZ) | -1.38% | -168.41 |
| UltraShort SmallCap 600 ProShares (SDD) | -3.14% | -383.65 |
| UltraShort Russell 2000 ProShares (TWM) | -3.10% | -377.97 |
| UltraShort Russell 1000 Value ProShares (SJF) | -1.17% | -143.04 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -1.82% | -221.90 |
| UltraShort Russell MidCap Value ProShares (SJL) | -0.44% | -53.35 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -1.87% | -228.33 |
| UltraShort Russell 2000 Value ProShares (SJH) | -2.78% | -339.61 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -3.17% | -386.74 |
| UltraShort Basic Materials ProShares (SMN) | -1.56% | -190.92 |
| UltraShort Consumer Goods ProShares (SZK) | -2.95% | -360.46 |
| UltraShort Consumer Services ProShares (SCC) | -3.35% | -408.95 |
| UltraShort Financials ProShares (SKF) | -3.39% | -413.47 |
| UltraShort Health Care ProShares (RXD) | -0.53% | -64.46 |
| UltraShort Industrials ProShares (SIJ) | -0.79% | -96.41 |
| UltraShort Oil & Gas ProShares (DUG) | -1.34% | -163.04 |
| UltraShort Real Estate ProShares (SRS) | -3.64% | -444.22 |
| UltraShort Semiconductors ProShares (SSG) | -1.55% | -189.30 |
| UltraShort Technology ProShares (REW) | +0.11% | +12.84 |
| UltraShort Utilities ProShares (SDP) | +0.68% | +83.13 |
| Short MSCI Emerging Markets ProShares (EUM) | -1.08% | -131.15 |
| Short MSCI EAFE ProShares (EFZ) | +0.61% | +74.56 |
| UltraShort MSCI EAFE ProShares (EFU) | +1.48% | +180.65 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -4.73% | -577.23 |
| UltraShort MSCI Japan ProShares (EWV) | -0.15% | -17.98 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -6.10% | -743.97 |
| Ultra QQQ ProShares (QLD) | +2.05% | +250.44 |
| Ultra Dow30 ProShares (DDM) | +0.89% | +109.13 |
| Ultra S&P500 ProShares (SSO) | +1.51% | +184.22 |
| Ultra MC400 ProShares (MVV) | +2.36% | +287.99 |
| Ultra SmallCap 600 ProShares (SAA) | +0.94% | +114.78 |
| Ultra Russell 2000 ProShares (UWM) | +2.76% | +337.03 |
| Ultra Russell 1000 Value ProShares (UVG) | +1.40% | +170.36 |
| Ultra Russell 1000 Growth ProShares (UKF) | +1.78% | +216.62 |
| Ultra Russell MidCap Value ProShares (UVU) | -1.66% | -202.63 |
| Ultra Russell MidCap Growth ProShares (UKW) | +2.14% | +261.19 |
| Ultra Russell 2000 Value ProShares (UVT) | +2.65% | +323.20 |
| Ultra Russell2000 Growth ProShares (UKK) | +3.24% | +395.29 |
| Ultra Basic Materials ProShares (UYM) | +0.85% | +103.86 |
| Ultra Consumer Goods ProShares (UGE) | +2.60% | +317.65 |
| Ultra Consumer Services ProShares (UCC) | +3.32% | +405.08 |
| Ultra Financials ProShares (UYG) | +2.62% | +319.45 |
| Ultra Health Care ProShares (RXL) | -0.19% | -23.30 |
| Ultra Industrials ProShares (UXI) | -0.75% | -91.39 |
| Ultra Oil & Gas ProShares (DIG) | +1.87% | +228.08 |
| Ultra Real Estate ProShares (URE) | +0.40% | +48.65 |
| Ultra Semiconductors ProShares (USD) | +1.67% | +203.38 |
| Ultra Technology ProShares (ROM) | -0.02% | -2.23 |
| Ultra Utilities ProShares (UPW) | -0.66% | -81.01 |
Journalists, who probably don't get paid enough to actually invest in the stock market, are the last to know about bear markets, which is why they tend to be great contrary indicators. Once the trend to the downside is exhausted, you'll read about the bear market in newspapers and magazines. Of course, the journalists will extrapolate the last year's action indefinitely into the future. When they should be turning bullish because values have been hammered to bargain levels, journalists are convincing the public to sell.
We noticed that the Philadelphia Daily News recently published an editorial cartoon showing stockbrokers plunging from a skyscraper, while Bush said from a window to them, "Is now a bad time to discuss investing our Social Security funds?" This is a typical viewpoint of the uneducated masses who believe that investing in stocks is a losing proposition. In truth, the worst investment the government could make has been the one it has made: spending Social Security funds on pork barrel projects that somehow feed some of those funds back into congressmen's secret bank accounts. Here's how it works:
Social Security contributors' money is sent to the government, which writes an I.O.U. for the money and then spends it for various projects which include making congressmen rich. It's a Ponzi scheme where new investors into the system pay for older investors' benefits. Like any Ponzi scheme, it depends upon recruiting more and more investors to pay the old investors. The I.O.U.'s, which will have to be paid out of general revenue in the future (fat chance of that), are essentially worthless promises. The cartoonist, Signe Wilkinson, needs to get educated about where the real risk is in the Social Security shell game. It's not investing in the stock market by any means.
If Social Security funds were invested in the stock market, it would eliminate the misuse of those funds by Congress. And, that's why it won't happen. The crooks in Washington have become addicted to spending money they have no right to spend in the first place. But, since the Justice Department is just another department of the Congressional criminals, they will never stop this theft of public funds. Don't expect anything from Congress other than higher taxes.
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Wednesday, February 06, 2008
Yield Curve Continues to Steepen
Stocks and bonds went the same way on Wednesday: down. However, short term interest rate instruments continued to advance in price. That combination helped push open profits on our latest recommended trade nearly to the $10,000 mark (for a one-unit position) as both sides of the spread contributed to the gains. Since we recommended this position on the 22nd of January, we have an open equity return of 132% on initial, outright margin requirements (before applying any spread credits which reduce the total margin required). This is why we say that spread trading is sometimes a "heads you win, tails you win" strategy. When the long and the short sides of the spread both generate profits, it can't be beaten for safety and return. Normally, of course, in a spread trade one side, either the long side or the short side, will generate a profit and the opposite side a loss. The object of the spread is to minimize risk and volatility and profit from the winning side outweighing the losing side. Normally, brokers offer a much lower margin requirement due to this risk reduction strategy. In any case, this spread has been generating profits on both legs due to the fact that short term interest rates have been falling while long term rates have been rising. This steepening of the yield curve results in extraordinary profitability in this particular spread trade.
The stock market took it on the chin Wednesday, though:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.53% | -65.03 |
| DIAMONDS TRUST SER 1 (DIA) | -0.57% | -69.82 |
| Ultra Dow30 ProShares (DDM) | -1.61% | -197.33 |
| UltraShort Dow30 ProShares (DXD) | +0.95% | +116.51 |
| S&P 500 (index) | -0.62% | -75.52 |
| S& P DEP RECEIPTS (SPY) | -0.81% | -98.76 |
| Ultra S&P500 ProShares (SSO) | -1.82% | -222.84 |
| UltraShort S&P500 ProShares (SDS) | +1.83% | +224.93 |
| NYSE Composite (index) | -0.64% | -77.93 |
| ISHARES NYSE CMP IDX (NYC) | -0.74% | -90.47 |
| S&P SmallCap 600 (index) | -1.03% | -125.91 |
| Ultra SmallCap 600 ProShares (SAA) | -2.50% | -307.04 |
| Short SmallCap 600 ProShares (SBB) | +1.73% | +212.03 |
| UltraShort SmallCap 600 ProShares (SDD) | +3.22% | +394.99 |
| Russell 2000 (index) | -1.41% | -173.42 |
| ISHARE RUS 2000 INDX (IWM) | -1.42% | -173.59 |
| Ultra Russell 2000 ProShares (UWM) | -2.90% | -355.62 |
| UltraShort Russell 2000 ProShares (TWM) | +2.83% | +346.98 |
| NASDAQ-100 (index) | -1.46% | -179.47 |
| NASDAQ 100 TR SER I (QQQQ) | -1.97% | -241.54 |
| Ultra QQQ ProShares (QLD) | -4.25% | -521.74 |
| UltraShort QQQ ProShares (QID) | +4.66% | +571.97 |
| S&P MidCap 400 (index) | -1.18% | -145.07 |
| ISHARE SP MC 400 INX (IJH) | -1.18% | -144.24 |
| Ultra MC400 ProShares (MVV) | -2.71% | -332.87 |
| UltraShort MC400 ProShares (MZZ) | +1.51% | +185.54 |
| Amex Gold (index) | +1.06% | +129.44 |
| MKT VECT GOLD MNRS (GDX) | +0.32% | +39.35 |
| STREETTRACKS GOLD TR (GLD) | +1.45% | +177.65 |
| Semiconductor Sector (index) | -2.86% | -350.32 |
| Ultra Semiconductors ProShares (USD) | -4.28% | -524.53 |
| UltraShort Semiconductors ProShares (SSG) | +3.63% | +444.86 |
| ISHARE DJ FIN SC INX (IYF) | -1.25% | -153.07 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +2.05% | +251.92 |
| Short Dow30 ProShares (DOG) | +1.18% | +144.41 |
| Short S&P500 ProShares (SH) | +1.30% | +158.90 |
| Short MC400 ProShares (MYY) | +1.30% | +159.88 |
| Short SmallCap 600 ProShares (SBB) | +1.73% | +212.03 |
| Short Russell 2000 ProShares (RWM) | +1.96% | +240.22 |
| UltraShort QQQ ProShares (QID) | +4.66% | +571.97 |
| UltraShort Dow30 ProShares (DXD) | +0.95% | +116.51 |
| UltraShort S&P500 ProShares (SDS) | +1.83% | +224.93 |
| UltraShort MC400 ProShares (MZZ) | +1.51% | +185.54 |
| UltraShort SmallCap 600 ProShares (SDD) | +3.22% | +394.99 |
| UltraShort Russell 2000 ProShares (TWM) | +2.83% | +346.98 |
| UltraShort Russell 1000 Value ProShares (SJF) | +0.98% | +119.83 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +2.38% | +292.29 |
| UltraShort Russell MidCap Value ProShares (SJL) | +2.02% | +248.24 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +2.57% | +314.98 |
| UltraShort Russell 2000 Value ProShares (SJH) | +2.12% | +259.60 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +4.83% | +592.58 |
| UltraShort Basic Materials ProShares (SMN) | +0.84% | +103.59 |
| UltraShort Consumer Goods ProShares (SZK) | +1.17% | +143.32 |
| UltraShort Consumer Services ProShares (SCC) | +2.13% | +260.93 |
| UltraShort Financials ProShares (SKF) | +2.75% | +337.50 |
| UltraShort Health Care ProShares (RXD) | +0.15% | +18.31 |
| UltraShort Industrials ProShares (SIJ) | +1.23% | +150.96 |
| UltraShort Oil & Gas ProShares (DUG) | +1.89% | +232.25 |
| UltraShort Real Estate ProShares (SRS) | +3.92% | +481.39 |
| UltraShort Semiconductors ProShares (SSG) | +3.63% | +444.86 |
| UltraShort Technology ProShares (REW) | +3.08% | +377.62 |
| UltraShort Utilities ProShares (SDP) | +0.46% | +56.68 |
| Short MSCI Emerging Markets ProShares (EUM) | +1.76% | +215.57 |
| Short MSCI EAFE ProShares (EFZ) | -0.05% | -5.99 |
| UltraShort MSCI EAFE ProShares (EFU) | -0.06% | -7.89 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | +4.15% | +508.89 |
| UltraShort MSCI Japan ProShares (EWV) | +2.37% | +290.40 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +6.81% | +834.80 |
| Ultra QQQ ProShares (QLD) | -4.25% | -521.74 |
| Ultra Dow30 ProShares (DDM) | -1.61% | -197.33 |
| Ultra S&P500 ProShares (SSO) | -1.82% | -222.84 |
| Ultra MC400 ProShares (MVV) | -2.71% | -332.87 |
| Ultra SmallCap 600 ProShares (SAA) | -2.50% | -307.04 |
| Ultra Russell 2000 ProShares (UWM) | -2.90% | -355.62 |
| Ultra Russell 1000 Value ProShares (UVG) | -1.26% | -154.61 |
| Ultra Russell 1000 Growth ProShares (UKF) | -2.17% | -266.31 |
| Ultra Russell MidCap Value ProShares (UVU) | -2.34% | -286.80 |
| Ultra Russell MidCap Growth ProShares (UKW) | -2.90% | -355.61 |
| Ultra Russell 2000 Value ProShares (UVT) | -1.92% | -235.30 |
| Ultra Russell2000 Growth ProShares (UKK) | -3.53% | -433.36 |
| Ultra Basic Materials ProShares (UYM) | -2.09% | -256.33 |
| Ultra Consumer Goods ProShares (UGE) | -1.95% | -239.66 |
| Ultra Consumer Services ProShares (UCC) | -1.94% | -237.52 |
| Ultra Financials ProShares (UYG) | -2.45% | -299.96 |
| Ultra Health Care ProShares (RXL) | +0.21% | +25.43 |
| Ultra Industrials ProShares (UXI) | -2.17% | -265.90 |
| Ultra Oil & Gas ProShares (DIG) | -3.40% | -417.38 |
| Ultra Real Estate ProShares (URE) | -0.67% | -82.22 |
| Ultra Semiconductors ProShares (USD) | -4.28% | -524.53 |
| Ultra Technology ProShares (ROM) | -3.19% | -391.44 |
| Ultra Utilities ProShares (UPW) | -0.73% | -89.45 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Tuesday, February 05, 2008
Stocks Tumble on Profit-Taking
The yield curve continued to steepen Tuesday as stocks tumbled on trader profit-taking. This expected retracement provided additional profits on our curve-steepening position, which continues to benefit from a variety of factors, including a Fed easing bias, while avoiding the two-way volatility in the stock market until a solid bottom is in place (which will likely be in place by the end of the month).
Today, the stock market tumbled hard in price, but this correction could take most of the month of February to work itself out. Over the month, in fact, the stock market is likely to trade in a volatile, but very contained range within the same price range from the January low to last week's highs. That's 1122 Dow points.
For Tuesday, profit-taking by short term traders provided the impetus for the correction:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -2.93% | -370.03 |
| DIAMONDS TRUST SER 1 (DIA) | -2.44% | -307.78 |
| Ultra Dow30 ProShares (DDM) | -4.57% | -577.04 |
| UltraShort Dow30 ProShares (DXD) | +5.31% | +671.06 |
| S&P 500 (index) | -3.04% | -384.05 |
| S& P DEP RECEIPTS (SPY) | -2.68% | -338.29 |
| Ultra S&P500 ProShares (SSO) | -5.33% | -672.88 |
| UltraShort S&P500 ProShares (SDS) | +5.37% | +678.19 |
| NYSE Composite (index) | -3.56% | -449.83 |
| ISHARES NYSE CMP IDX (NYC) | -3.49% | -440.76 |
| S&P SmallCap 600 (index) | -2.82% | -356.52 |
| Ultra SmallCap 600 ProShares (SAA) | -4.58% | -578.30 |
| Short SmallCap 600 ProShares (SBB) | +2.08% | +262.41 |
| UltraShort SmallCap 600 ProShares (SDD) | +4.52% | +571.57 |
| Russell 2000 (index) | -2.92% | -369.56 |
| ISHARE RUS 2000 INDX (IWM) | -2.56% | -323.84 |
| Ultra Russell 2000 ProShares (UWM) | -5.57% | -703.65 |
| UltraShort Russell 2000 ProShares (TWM) | +4.03% | +509.29 |
| NASDAQ-100 (index) | -2.77% | -349.80 |
| NASDAQ 100 TR SER I (QQQQ) | -2.85% | -359.80 |
| Ultra QQQ ProShares (QLD) | -4.76% | -601.43 |
| UltraShort QQQ ProShares (QID) | +4.40% | +555.96 |
| S&P MidCap 400 (index) | -2.87% | -362.67 |
| ISHARE SP MC 400 INX (IJH) | -2.80% | -354.08 |
| Ultra MC400 ProShares (MVV) | -5.42% | -684.33 |
| UltraShort MC400 ProShares (MZZ) | +5.32% | +671.70 |
| Amex Gold (index) | -3.38% | -427.26 |
| MKT VECT GOLD MNRS (GDX) | -2.91% | -367.38 |
| STREETTRACKS GOLD TR (GLD) | -1.59% | -201.37 |
| Semiconductor Sector (index) | -3.87% | -488.77 |
| Ultra Semiconductors ProShares (USD) | -7.84% | -990.99 |
| UltraShort Semiconductors ProShares (SSG) | +9.02% | +1140.07 |
| ISHARE DJ FIN SC INX (IYF) | -4.19% | -528.83 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +2.18% | +275.53 |
| Short Dow30 ProShares (DOG) | +2.17% | +273.58 |
| Short S&P500 ProShares (SH) | +2.44% | +308.08 |
| Short MC400 ProShares (MYY) | +2.97% | +375.54 |
| Short SmallCap 600 ProShares (SBB) | +2.08% | +262.41 |
| Short Russell 2000 ProShares (RWM) | +2.48% | +313.27 |
| UltraShort QQQ ProShares (QID) | +4.40% | +555.96 |
| UltraShort Dow30 ProShares (DXD) | +5.31% | +671.06 |
| UltraShort S&P500 ProShares (SDS) | +5.37% | +678.19 |
| UltraShort MC400 ProShares (MZZ) | +5.32% | +671.70 |
| UltraShort SmallCap 600 ProShares (SDD) | +4.52% | +571.57 |
| UltraShort Russell 2000 ProShares (TWM) | +4.03% | +509.29 |
| UltraShort Russell 1000 Value ProShares (SJF) | +6.71% | +847.72 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +5.63% | +710.84 |
| UltraShort Russell MidCap Value ProShares (SJL) | +5.63% | +711.64 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +6.15% | +777.63 |
| UltraShort Russell 2000 Value ProShares (SJH) | +4.59% | +579.67 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +5.79% | +731.00 |
| UltraShort Basic Materials ProShares (SMN) | +7.53% | +951.26 |
| UltraShort Consumer Goods ProShares (SZK) | +4.35% | +549.98 |
| UltraShort Consumer Services ProShares (SCC) | +4.17% | +527.35 |
| UltraShort Financials ProShares (SKF) | +8.59% | +1085.80 |
| UltraShort Health Care ProShares (RXD) | +3.57% | +451.00 |
| UltraShort Industrials ProShares (SIJ) | +5.81% | +734.29 |
| UltraShort Oil & Gas ProShares (DUG) | +7.31% | +923.12 |
| UltraShort Real Estate ProShares (SRS) | +5.46% | +689.37 |
| UltraShort Semiconductors ProShares (SSG) | +9.02% | +1140.07 |
| UltraShort Technology ProShares (REW) | +6.01% | +759.38 |
| UltraShort Utilities ProShares (SDP) | +6.49% | +819.78 |
| Short MSCI Emerging Markets ProShares (EUM) | +5.25% | +663.63 |
| Short MSCI EAFE ProShares (EFZ) | +5.03% | +635.57 |
| UltraShort MSCI EAFE ProShares (EFU) | +9.40% | +1187.19 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | +10.63% | +1343.44 |
| UltraShort MSCI Japan ProShares (EWV) | +6.30% | +796.62 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | +10.72% | +1355.08 |
| Ultra QQQ ProShares (QLD) | -4.76% | -601.43 |
| Ultra Dow30 ProShares (DDM) | -4.57% | -577.04 |
| Ultra S&P500 ProShares (SSO) | -5.33% | -672.88 |
| Ultra MC400 ProShares (MVV) | -5.42% | -684.33 |
| Ultra SmallCap 600 ProShares (SAA) | -4.58% | -578.30 |
| Ultra Russell 2000 ProShares (UWM) | -5.57% | -703.65 |
| Ultra Russell 1000 Value ProShares (UVG) | -6.16% | -777.73 |
| Ultra Russell 1000 Growth ProShares (UKF) | -5.98% | -755.26 |
| Ultra Russell MidCap Value ProShares (UVU) | -5.19% | -656.11 |
| Ultra Russell MidCap Growth ProShares (UKW) | -6.45% | -814.75 |
| Ultra Russell 2000 Value ProShares (UVT) | -5.31% | -671.13 |
| Ultra Russell2000 Growth ProShares (UKK) | -6.35% | -801.76 |
| Ultra Basic Materials ProShares (UYM) | -6.46% | -816.65 |
| Ultra Consumer Goods ProShares (UGE) | -3.72% | -469.67 |
| Ultra Consumer Services ProShares (UCC) | -4.99% | -630.99 |
| Ultra Financials ProShares (UYG) | -8.00% | -1010.81 |
| Ultra Health Care ProShares (RXL) | -3.27% | -413.31 |
| Ultra Industrials ProShares (UXI) | -5.26% | -665.20 |
| Ultra Oil & Gas ProShares (DIG) | -7.06% | -891.59 |
| Ultra Real Estate ProShares (URE) | -5.85% | -739.41 |
| Ultra Semiconductors ProShares (USD) | -7.84% | -990.99 |
| Ultra Technology ProShares (ROM) | -4.41% | -556.80 |
| Ultra Utilities ProShares (UPW) | -6.18% | -781.38 |
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Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Monday, February 04, 2008
Market Consolidates Gains
Stocks consolidated recent gains as volume withered away and profit-taking was the order of the day. The broad market continued to show strength in the face of the very minor selling pressure, suggesting that there is little impetus to bring strong sellers back into the market at this time.
Most of our Trading Page indicators were in sell mode from the opening as technicals ruled on Monday. Still, the relative strength shown in the Russell 2000 and S&P 400 Indices suggested that the underlying trend remains up. And, despite the negative close, the NYSE registered 33 new 52-week highs and only 7 new lows. This is the lowest number of new lows since 22 May 2007. As recently as last month, new lows had been in the vicinity of the thousand mark, so today's calm pullback stands in stark contrast to events of January.
The current 2007-2008 market bears a striking resemblance to the market of 1989-1990. In 1989, the market made an all-time high in October, but sold off sharply and rebounded into year end. 1990 opened with a January decline that took the market sharply lower and bottomed late that month. After bouncing into February 8th, the market went down to retest January lows on the 23rd. That retest, which held above the January low, was successful and the market then proceded to rally sharply for the next several months, moving to a succession of all-time highs into July 1990. With the Invasion of Kuwait, the market tumbled in a 20% correction for two months, bottomed and roared higher for the next five years.
If the current market is an analog for that period, we should see the current rally fizzle out this week and drop to retest the January lows. Assuming that retest is as successful as the 1990 experience, the market would then rally sharply higher to new all-time highs in just a few months.
Here's what the market did on Monday:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.85% | -108.03 |
| DIAMONDS TRUST SER 1 (DIA) | -1.10% | -140.00 |
| Ultra Dow30 ProShares (DDM) | -2.28% | -290.88 |
| UltraShort Dow30 ProShares (DXD) | +2.38% | +303.75 |
| S&P 500 (index) | -1.01% | -129.08 |
| S& P DEP RECEIPTS (SPY) | -1.26% | -160.68 |
| Ultra S&P500 ProShares (SSO) | -2.43% | -309.68 |
| UltraShort S&P500 ProShares (SDS) | +2.45% | +312.65 |
| NYSE Composite (index) | -0.81% | -103.66 |
| ISHARES NYSE CMP IDX (NYC) | -0.80% | -101.99 |
| S&P SmallCap 600 (index) | -1.23% | -156.37 |
| Ultra SmallCap 600 ProShares (SAA) | -2.77% | -352.47 |
| Short SmallCap 600 ProShares (SBB) | +1.26% | +161.15 |
| UltraShort SmallCap 600 ProShares (SDD) | +2.29% | +291.35 |
| Russell 2000 (index) | -1.02% | -130.30 |
| ISHARE RUS 2000 INDX (IWM) | -1.16% | -147.38 |
| Ultra Russell 2000 ProShares (UWM) | -1.76% | -223.85 |
| UltraShort Russell 2000 ProShares (TWM) | +2.72% | +346.72 |
| NASDAQ-100 (index) | -1.78% | -227.07 |
| NASDAQ 100 TR SER I (QQQQ) | -1.40% | -178.89 |
| Ultra QQQ ProShares (QLD) | -3.50% | -445.60 |
| UltraShort QQQ ProShares (QID) | +4.40% | +561.00 |
| S&P MidCap 400 (index) | -0.74% | -94.25 |
| ISHARE SP MC 400 INX (IJH) | -0.72% | -91.74 |
| Ultra MC400 ProShares (MVV) | -1.53% | -194.69 |
| UltraShort MC400 ProShares (MZZ) | +1.45% | +184.28 |
| Amex Gold (index) | -2.56% | -326.85 |
| MKT VECT GOLD MNRS (GDX) | -2.03% | -259.27 |
| STREETTRACKS GOLD TR (GLD) | -0.28% | -35.66 |
| Semiconductor Sector (index) | -2.17% | -276.86 |
| Ultra Semiconductors ProShares (USD) | -4.32% | -549.89 |
| UltraShort Semiconductors ProShares (SSG) | +3.72% | +474.17 |
| ISHARE DJ FIN SC INX (IYF) | -2.32% | -295.05 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | +0.64% | +82.01 |
| Short Dow30 ProShares (DOG) | +0.97% | +123.82 |
| Short S&P500 ProShares (SH) | +1.12% | +143.18 |
| Short MC400 ProShares (MYY) | +0.72% | +92.30 |
| Short SmallCap 600 ProShares (SBB) | +1.26% | +161.15 |
| Short Russell 2000 ProShares (RWM) | +1.10% | +140.28 |
| UltraShort QQQ ProShares (QID) | +4.40% | +561.00 |
| UltraShort Dow30 ProShares (DXD) | +2.38% | +303.75 |
| UltraShort S&P500 ProShares (SDS) | +2.45% | +312.65 |
| UltraShort MC400 ProShares (MZZ) | +1.45% | +184.28 |
| UltraShort SmallCap 600 ProShares (SDD) | +2.29% | +291.35 |
| UltraShort Russell 2000 ProShares (TWM) | +2.72% | +346.72 |
| UltraShort Russell 1000 Value ProShares (SJF) | +2.12% | +269.74 |
| UltraShort Russell 1000 Growth ProShares (SFK) | +1.79% | +228.39 |
| UltraShort Russell MidCap Value ProShares (SJL) | +0.58% | +73.66 |
| UltraShort Russell MidCap Growth ProShares (SDK) | +1.35% | +172.49 |
| UltraShort Russell 2000 Value ProShares (SJH) | +2.41% | +307.03 |
| UltraShort Russell 2000 Growth ProShares (SKK) | +1.77% | +225.42 |
| UltraShort Basic Materials ProShares (SMN) | +1.58% | +201.09 |
| UltraShort Consumer Goods ProShares (SZK) | +1.79% | +228.05 |
| UltraShort Consumer Services ProShares (SCC) | +3.23% | +411.40 |
| UltraShort Financials ProShares (SKF) | +5.03% | +641.30 |
| UltraShort Health Care ProShares (RXD) | -0.79% | -101.26 |
| UltraShort Industrials ProShares (SIJ) | +2.01% | +256.05 |
| UltraShort Oil & Gas ProShares (DUG) | -1.02% | -129.59 |
| UltraShort Real Estate ProShares (SRS) | +2.03% | +258.78 |
| UltraShort Semiconductors ProShares (SSG) | +3.72% | +474.17 |
| UltraShort Technology ProShares (REW) | +3.81% | +485.00 |
| UltraShort Utilities ProShares (SDP) | -3.35% | -426.49 |
| Short MSCI Emerging Markets ProShares (EUM) | +0.42% | +52.97 |
| Short MSCI EAFE ProShares (EFZ) | +0.71% | +90.58 |
| UltraShort MSCI EAFE ProShares (EFU) | +1.61% | +205.05 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -0.68% | -87.22 |
| UltraShort MSCI Japan ProShares (EWV) | +1.15% | +146.31 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -4.11% | -524.18 |
| Ultra QQQ ProShares (QLD) | -3.50% | -445.60 |
| Ultra Dow30 ProShares (DDM) | -2.28% | -290.88 |
| Ultra S&P500 ProShares (SSO) | -2.43% | -309.68 |
| Ultra MC400 ProShares (MVV) | -1.53% | -194.69 |
| Ultra SmallCap 600 ProShares (SAA) | -2.77% | -352.47 |
| Ultra Russell 2000 ProShares (UWM) | -1.76% | -223.85 |
| Ultra Russell 1000 Value ProShares (UVG) | -1.81% | -231.27 |
| Ultra Russell 1000 Growth ProShares (UKF) | -1.31% | -166.38 |
| Ultra Russell MidCap Value ProShares (UVU) | -1.61% | -205.33 |
| Ultra Russell MidCap Growth ProShares (UKW) | -1.28% | -163.10 |
| Ultra Russell 2000 Value ProShares (UVT) | -1.94% | -247.10 |
| Ultra Russell2000 Growth ProShares (UKK) | -1.61% | -205.17 |
| Ultra Basic Materials ProShares (UYM) | -1.85% | -236.01 |
| Ultra Consumer Goods ProShares (UGE) | -1.73% | -220.40 |
| Ultra Consumer Services ProShares (UCC) | -3.53% | -449.88 |
| Ultra Financials ProShares (UYG) | -4.40% | -560.41 |
| Ultra Health Care ProShares (RXL) | +0.47% | +59.26 |
| Ultra Industrials ProShares (UXI) | -1.30% | -165.54 |
| Ultra Oil & Gas ProShares (DIG) | +0.31% | +39.41 |
| Ultra Real Estate ProShares (URE) | -2.35% | -299.84 |
| Ultra Semiconductors ProShares (USD) | -4.32% | -549.89 |
| Ultra Technology ProShares (ROM) | -5.30% | -675.00 |
| Ultra Utilities ProShares (UPW) | +3.23% | +411.96 |
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Sunday, February 03, 2008
Jobs Drop, or Do They?
That wacky government report which should be called the Fantasy Employment Report due to its lack of connection to the real world was released Friday morning. It showed that the unemployment rate had dropped by 0.1%, but the number of new jobs created was -17,000. Traders may have finally realized that this garbage data is exactly that. Stocks rallied on the news, which on the surface makes no sense. But, it does indicate that traders realize just how little accurate information is released by the government.
Is the government deliberately lying to the public? Well, does the sun rise in the East? We have observed that, over the years since the first Clinton became President, the initial release ofgovernment statistics have been drastically revised later, often painting a picture exactly opposite that given by the initial data. The Employment Report is a prime example, but the Consumer Price Index understates the true rate of inflation by several percentage points. The latter is clearly a deliberate violation of the law by government by short-changing retirees of the cost-of-living adjustment to Social Security payments. This is a well-known fact, but no one in Congress will even respond to questions posed to them about why they don't do anything to uphold the law. In other words, it's a convenient conspiracy to steal money from the public. So, if we are skeptical about government reports, we have solid reasons to be.
Fortunately, there is a private sector Employment Report produced by ADP, the largest issuer of payroll checks in the US, which analyzes actual employment data. According to ADP, the number of new jobs created in January was +130,000. In other words, the government number was 147,000 jobs under the real payroll data.
The government adds a "fudge factor" to the data on jobs it receives. This "fudge factor" is the source of the negative jobs figure in the government report. This is a number pulled out of the statistical "air" which assumes that the actual data collected by the government is wrong to begin with and that some value has to be added to the actual number to come up with a more accurate estimate, supposedly. However, in January, the government actually added a -378,000 number to the actual number of jobs they counted! This is how they came up with a job loss of 17,000. In other words, the government data initially showed a job gain of 361,000 in January. Can you imagine the shock and awe of that number had they released it? It just goes to show that the government can go to any length to deceive the public, as well as the Fed, which uses government data to set interest rates. It's no wonder the Fed is being criticized so much for botching interest rate policy. Although we think they deserve much of the criticism for keeping interest rates far too high for far too long, there's plenty of blame to go around to Congress and the Administration. As far as we're concerned, they should all be voted out of office (except the Fed, of course, which can't be voted out of office — but can be eliminated by Congress should they choose to do so).
Markets seemed to like the news. Perhaps traders finally have realized they'd better just ignore the news and trade the technical indicators and the fundamentals:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.73% | +92.83 |
| DIAMONDS TRUST SER 1 (DIA) | +1.13% | +143.57 |
| Ultra Dow30 ProShares (DDM) | +2.05% | +259.93 |
| UltraShort Dow30 ProShares (DXD) | -2.19% | -276.51 |
| S&P 500 (index) | +1.19% | +150.49 |
| S& P DEP RECEIPTS (SPY) | +1.61% | +203.52 |
| Ultra S&P500 ProShares (SSO) | +3.23% | +408.53 |
| UltraShort S&P500 ProShares (SDS) | -3.90% | -493.67 |
| NYSE Composite (index) | +1.66% | +209.89 |
| ISHARES NYSE CMP IDX (NYC) | +1.85% | +233.54 |
| S&P SmallCap 600 (index) | +2.43% | +307.58 |
| Ultra SmallCap 600 ProShares (SAA) | +4.44% | +562.24 |
| Short SmallCap 600 ProShares (SBB) | -2.83% | -358.20 |
| UltraShort SmallCap 600 ProShares (SDD) | -5.00% | -632.93 |
| Russell 2000 (index) | +2.42% | +306.11 |
| ISHARE RUS 2000 INDX (IWM) | +2.38% | +301.37 |
| Ultra Russell 2000 ProShares (UWM) | +5.42% | +685.72 |
| UltraShort Russell 2000 ProShares (TWM) | -5.68% | -718.31 |
| NASDAQ-100 (index) | +0.76% | +95.56 |
| NASDAQ 100 TR SER I (QQQQ) | +1.02% | +128.94 |
| Ultra QQQ ProShares (QLD) | +3.26% | +412.97 |
| UltraShort QQQ ProShares (QID) | -3.98% | -503.74 |
| S&P MidCap 400 (index) | +2.34% | +295.41 |
| ISHARE SP MC 400 INX (IJH) | +2.32% | +293.79 |
| Ultra MC400 ProShares (MVV) | +4.96% | +626.99 |
| UltraShort MC400 ProShares (MZZ) | -5.57% | -705.17 |
| Amex Gold (index) | -1.59% | -200.84 |
| MKT VECT GOLD MNRS (GDX) | -2.38% | -301.50 |
| STREETTRACKS GOLD TR (GLD) | -2.24% | -283.73 |
| Semiconductor Sector (index) | +5.77% | +730.48 |
| Ultra Semiconductors ProShares (USD) | +8.47% | +1070.93 |
| UltraShort Semiconductors ProShares (SSG) | -8.27% | -1046.70 |
| ISHARE DJ FIN SC INX (IYF) | +2.14% | +270.88 |
| ProShares ETFs | ||
| Short QQQ ProShares (PSQ) | -0.82% | -103.52 |
| Short Dow30 ProShares (DOG) | -1.28% | -161.80 |
| Short S&P500 ProShares (SH) | -1.79% | -226.83 |
| Short MC400 ProShares (MYY) | -1.27% | -160.82 |
| Short SmallCap 600 ProShares (SBB) | -2.83% | -358.20 |
| Short Russell 2000 ProShares (RWM) | -2.36% | -298.16 |
| UltraShort QQQ ProShares (QID) | -3.98% | -503.74 |
| UltraShort Dow30 ProShares (DXD) | -2.19% | -276.51 |
| UltraShort S&P500 ProShares (SDS) | -3.90% | -493.67 |
| UltraShort MC400 ProShares (MZZ) | -5.57% | -705.17 |
| UltraShort SmallCap 600 ProShares (SDD) | -5.00% | -632.93 |
| UltraShort Russell 2000 ProShares (TWM) | -5.68% | -718.31 |
| UltraShort Russell 1000 Value ProShares (SJF) | -1.48% | -187.32 |
| UltraShort Russell 1000 Growth ProShares (SFK) | -2.55% | -322.78 |
| UltraShort Russell MidCap Value ProShares (SJL) | -2.81% | -355.35 |
| UltraShort Russell MidCap Growth ProShares (SDK) | -5.22% | -660.88 |
| UltraShort Russell 2000 Value ProShares (SJH) | -4.98% | -630.54 |
| UltraShort Russell 2000 Growth ProShares (SKK) | -6.19% | -783.30 |
| UltraShort Basic Materials ProShares (SMN) | -5.40% | -682.78 |
| UltraShort Consumer Goods ProShares (SZK) | -2.67% | -337.63 |
| UltraShort Consumer Services ProShares (SCC) | -3.25% | -410.78 |
| UltraShort Financials ProShares (SKF) | -4.99% | -630.89 |
| UltraShort Health Care ProShares (RXD) | -3.17% | -401.30 |
| UltraShort Industrials ProShares (SIJ) | -3.65% | -461.48 |
| UltraShort Oil & Gas ProShares (DUG) | -1.49% | -188.68 |
| UltraShort Real Estate ProShares (SRS) | -6.65% | -841.13 |
| UltraShort Semiconductors ProShares (SSG) | -8.27% | -1046.70 |
| UltraShort Technology ProShares (REW) | -3.87% | -490.04 |
| UltraShort Utilities ProShares (SDP) | -3.24% | -409.68 |
| Short MSCI Emerging Markets ProShares (EUM) | -3.13% | -396.37 |
| Short MSCI EAFE ProShares (EFZ) | -0.90% | -113.41 |
| UltraShort MSCI EAFE ProShares (EFU) | -3.03% | -383.08 |
| UltraShort MSCI Emerging Markets ProShares (EEV) | -5.42% | -685.82 |
| UltraShort MSCI Japan ProShares (EWV) | -1.07% | -135.87 |
| UltraShort FTSE/Xinhua China 25 ProShares (FXP) | -9.14% | -1156.42 |
| Ultra QQQ ProShares (QLD) | +3.26% | +412.97 |
| Ultra Dow30 ProShares (DDM) | +2.05% | +259.93 |
| Ultra S&P500 ProShares (SSO) | +3.23% | +408.53 |
| Ultra MC400 ProShares (MVV) | +4.96% | +626.99 |
| Ultra SmallCap 600 ProShares (SAA) | +4.44% | +562.24 |
| Ultra Russell 2000 ProShares (UWM) | +5.42% | +685.72 |
| Ultra Russell 1000 Value ProShares (UVG) | +3.96% | +501.24 |
| Ultra Russell 1000 Growth ProShares (UKF) | +4.97% | +629.31 |
| Ultra Russell MidCap Value ProShares (UVU) | +3.50% | +442.52 |
| Ultra Russell MidCap Growth ProShares (UKW) | +4.99% | +630.73 |
| Ultra Russell 2000 Value ProShares (UVT) | +4.60% | +581.80 |
| Ultra Russell2000 Growth ProShares (UKK) | +5.69% | +719.94 |
| Ultra Basic Materials ProShares (UYM) | +6.02% | +761.55 |
| Ultra Consumer Goods ProShares (UGE) | +2.82% | +356.84 |
| Ultra Consumer Services ProShares (UCC) | +3.58% | +452.35 |
| Ultra Financials ProShares (UYG) | +2.42% | +306.58 |
| Ultra Health Care ProShares (RXL) | +1.85% | +233.67 |
| Ultra Industrials ProShares (UXI) | +2.98% | +377.54 |
| Ultra Oil & Gas ProShares (DIG) | +2.22% | +281.41 |
| Ultra Real Estate ProShares (URE) | +7.85% | +993.68 |
| Ultra Semiconductors ProShares (USD) | +8.47% | +1070.93 |
| Ultra Technology ProShares (ROM) | +10.91% | +1380.57 |
| Ultra Utilities ProShares (UPW) | +3.52% | +444.68 |
In any case, they are warming up the helicopters in Washington and loading them with $100 bills. Americans are going to be bribed to keep the current gang in office this Fall. It's a government of helicopter money, it seems.
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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