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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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Sunday, November 30, 2008
Psychology Drives the Market
The news just gets worse, but the stock market has been making nice gains recently. The difference now is that Obama has taken the psychology reins from Bush and traders are far more confident of the new President's abilities and team than they are of the disasterous lame duck still in the White House. In fact, when the Treasury Secretary speaks on teevee, you can count on the market taking a short term tumble no matter what he actually says.
This is an example of how the market is really driven more by confidence than by cold, hard facts. There certainly has been a sustained drop in confidence over the last year, resulting in market values dropping in half. This is similar to what happened earlier in the decade. The NASDAQ dropped 80% from its 2000 highs, about on par with the drop from 1929-1932 in the Dow. In fact, the parallels between the stock market of the Great Depression and today's market continue to play out. The fact that we weren't in a Depression until this year is probably due to the real estate bubble which kept the economy floating along in the meantime. Now, we have rejoined the Depression experience in today's market.
In 1932, the market began a five-year bull run. In 2002, the market began a five-year bull run. The bear market which started in 1937 saw the S&P 500 decline 54½% over a period of approximately 13 months. The bear market which started in 2007 has seen the S&P 500 decline 52% over the last 13 months. It's an amazing similarity. And, if the similarity continues, what does it mean for the future?
Following the 1938 bottom, the market spent the next 13 years trading within the range from its 1937 high and its 1942 low. The initial rally off the 1938 low retraced about halfway back toward the 1937 high. Then, the market gradually worked its way lower into 1942, making a slightly lower low than the 1938 low. If the current market repeats the pattern, we will be looking forward to the market trading within the range until 2021. So, if you're a trader, you're going to have a good market to put your skills to work. While it was smart to buy-and-hold from the 1982 bottom to the 2007 top, it is equally as smart to trade this market, not marrying a bull or bear position.
If we're in a similar 1938 bear market rally, we should expect to see a retracement of about half of the loss of the last year. The S&P 500 lost 836 points in the last year, so we should expect a bear market rally of about 418 points, which would carry the market to 1158 by about March or April 2009.
Traders are being rewarded well in this market. Since the 20th, you can see that the rally has covered quite a bit of ground:
Change From 20 Nov 2008 To 28 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +16.91% | +1276.75 |
| DIAMONDS TRUST SER 1 (DIA) | +16.09% | +1215.36 |
| ULTRA DOW30 PROSHRS (DDM) | +34.20% | +2583.11 |
| PT ULTRSHRT DOW30 PS (DXD) | -28.12% | -2123.87 |
| S&P 500 (index) | +19.07% | +1440.32 |
| S& P DEP RECEIPTS (SPY) | +19.34% | +1460.64 |
| ULTRA S& P500 PROSHRS (SSO) | +39.93% | +3015.35 |
| PT ULTRSHRT SP500 PS (SDS) | -31.07% | -2346.48 |
| NYSE Composite (index) | +20.38% | +1539.44 |
| ISHARES NYSE CMP IDX (NYC) | +20.38% | +1539.05 |
| S&P SmallCap 600 (index) | +21.88% | +1652.21 |
| PROSH ULTRA SMALLCAP (SAA) | +48.65% | +3674.38 |
| SHORT SMALLCAP600 PR (SBB) | -19.46% | -1469.39 |
| ULTRASHORT SMALLCAP6 (SDD) | -35.85% | -2707.14 |
| Russell 2000 (index) | +22.73% | +1716.42 |
| ISHARE RUS 2000 INDX (IWM) | +22.87% | +1726.85 |
| ULTRA RUSSELL2000 PR (UWM) | +53.69% | +4054.64 |
| ULTRASHORT RUSSELL20 (TWM) | -37.19% | -2808.61 |
| NASDAQ-100 (index) | +14.46% | +1092.21 |
| POWERSHARES QQQ TR 1 (QQQQ) | +13.93% | +1051.88 |
| ULTRA QQQ PROSHARES (QLD) | +28.16% | +2126.94 |
| PT UTLRSHRT QQQ PS (QID) | -25.09% | -1894.97 |
| S&P MidCap 400 (index) | +23.36% | +1764.23 |
| ISHARE SP MC 400 INX (IJH) | +23.28% | +1758.28 |
| ULTRA MC400 PROSHRS (MVV) | +50.73% | +3831.29 |
| PT ULTRSHR MC400 PS (MZZ) | -36.66% | -2768.44 |
| GREENHAVEN CONT IDX (GCC) | +6.92% | +522.77 |
| Amex Gold (index) | +46.37% | +3501.76 |
| MKT VECT GOLD MNRS (GDX) | +46.80% | +3534.14 |
| STREETTRACKS GOLD TR (GLD) | +9.34% | +705.36 |
| DB GOLD DBL SH ETN (DZZ) | -21.27% | -1606.13 |
| DB GOLD DBL LG ETN (DGP) | +18.43% | +1391.95 |
| Semiconductor Sector (index) | +15.71% | +1186.71 |
| ULTRA SEMICONDUCTORS (USD) | +24.29% | +1834.13 |
| ULTRASHORT SEMICONDU (SSG) | -27.52% | -2078.72 |
| ISHARE DJ FIN SC INX (IYF) | +31.91% | +2409.65 |
| ISHARES LEHMAN 20 YR (TLT) | +1.24% | +93.29 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.65% | +49.14 |
| ISHARES LEH AGG FD (AGG) | +1.08% | +81.42 |
| ISHARES GS $ INVESTO (LQD) | +0.37% | +27.75 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.04% | +2.67 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.22% | -91.84 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -2.77% | -209.36 |
| SHORT QQQ PROSHARES (PSQ) | -12.94% | -977.27 |
| SHRT DOW30 PROSHARES (DOG) | -14.38% | -1086.00 |
| SHRT S& P500 PROSHRS (SH) | -16.76% | -1265.88 |
| SHRT MC400 PROSHARES (MYY) | -20.14% | -1520.91 |
| SHORT SMALLCAP600 PR (SBB) | -19.46% | -1469.39 |
| SHORT RUSSELL2000 PR (RWM) | -19.71% | -1488.32 |
| PT UTLRSHRT QQQ PS (QID) | -25.09% | -1894.97 |
| PT ULTRSHRT DOW30 PS (DXD) | -28.12% | -2123.87 |
| PT ULTRSHRT SP500 PS (SDS) | -31.07% | -2346.48 |
| PT ULTRSHR MC400 PS (MZZ) | -36.66% | -2768.44 |
| ULTRASHORT SMALLCAP6 (SDD) | -35.85% | -2707.14 |
| ULTRASHORT RUSSELL20 (TWM) | -37.19% | -2808.61 |
| PST ULSHT RSL1K VALU (SJF) | -35.95% | -2715.32 |
| PST ULSHT RSL1K GR (SFK) | -28.16% | -2126.91 |
| PST ULSHT RSL MC VAL (SJL) | -37.26% | -2814.15 |
| PST ULSHT RSL MC GR (SDK) | -35.76% | -2700.34 |
| PST ULTSHT RSL2K VAL (SJH) | -38.87% | -2935.60 |
| PST ULSHT RSL2K GR (SKK) | -35.69% | -2695.55 |
| ULTRASHORT BASIC MAT (SMN) | -41.53% | -3136.69 |
| ULTRASHORT CONSUMER (SZK) | -22.27% | -1682.22 |
| ULTRASHORT CONSUMER (SCC) | -31.61% | -2387.21 |
| ULTRASHORT FINANCIAL (SKF) | -48.54% | -3666.08 |
| ULTRASHORT HEALTH CA (RXD) | -19.45% | -1468.89 |
| ULTRASHORT INDUSTRIA (SIJ) | -35.57% | -2686.13 |
| ULTRASHORT OIL & GAS (DUG) | -38.67% | -2920.67 |
| ULTRASHORT REAL ESTA (SRS) | -53.15% | -4013.76 |
| ULTRASHORT SEMICONDU (SSG) | -27.52% | -2078.72 |
| ULTRASHORT TECHNOLOG (REW) | -26.11% | -1971.62 |
| ULTRASHORT UTILITIES (SDP) | -25.69% | -1939.87 |
| PROSHARES SHR MSCI E (EUM) | -22.47% | -1696.98 |
| PROSHARES SHORT MSCI (EFZ) | -15.49% | -1169.55 |
| PROSHARES ULTRASHORT (EFU) | -29.36% | -2217.70 |
| PROSHARES UTLRASHORT (EEV) | -42.12% | -3180.98 |
| PROSHARES US MSCI JP (EWV) | -21.73% | -1640.91 |
| PROSHARES ULTRASHORT (FXP) | -44.94% | -3393.66 |
| ULTRA QQQ PROSHARES (QLD) | +28.16% | +2126.94 |
| ULTRA DOW30 PROSHRS (DDM) | +34.20% | +2583.11 |
| ULTRA S& P500 PROSHRS (SSO) | +39.93% | +3015.35 |
| ULTRA MC400 PROSHRS (MVV) | +50.73% | +3831.29 |
| PROSH ULTRA SMALLCAP (SAA) | +48.65% | +3674.38 |
| ULTRA RUSSELL2000 PR (UWM) | +53.69% | +4054.64 |
| PST ULT RUS1000 VAL (UVG) | +45.26% | +3418.22 |
| PST ULT RSL1000 GR (UKF) | +36.07% | +2724.39 |
| PST ULT RSL MC VALU (UVU) | +49.20% | +3715.97 |
| PST ULT RSL MC GR PS (UKW) | +50.62% | +3823.03 |
| PST ULT RSL2000 VALU (UVT) | +48.70% | +3677.75 |
| PST ULT RSL2000 GR (UKK) | +48.60% | +3670.04 |
| ULTRA BASIC MATERIAL (UYM) | +57.44% | +4338.37 |
| ULTRA CONSUMER GOODS (UGE) | +29.82% | +2252.20 |
| ULTRA CONSUMER SERVI (UCC) | +42.87% | +3237.51 |
| ULTRA FINANCIALS PRO (UYG) | +68.45% | +5169.48 |
| ULTRA HEALTH CARE PR (RXL) | +21.20% | +1601.05 |
| ULTRA INDUSTRIALS PR (UXI) | +45.17% | +3411.35 |
| ULTRA OIL & GAS PROS (DIG) | +51.87% | +3917.18 |
| ULTRA REAL ESTATE PR (URE) | +79.67% | +6016.59 |
| ULTRA SEMICONDUCTORS (USD) | +24.29% | +1834.13 |
| ULTRA TECHNOLOGY PRO (ROM) | +28.76% | +2171.69 |
| ULTRA UTILITIES PROS (UPW) | +29.75% | +2246.92 |
| Other ETFs | ||
| PWRSHRS NDQ INTERNET (PNQI) | +22.39% | +1691.25 |
| POWERSHARES DB BASE (BOM) | -2.66% | -200.74 |
| POWERSHARES DB BASE (BDD) | +5.95% | +449.25 |
| POWERSHARES DB BASE (BOS) | -0.90% | -68.09 |
| POWERSHARES DB CRUDE (DTO) | -5.69% | -429.64 |
| POWERSHARES DB CRUDE (SZO) | -3.59% | -271.23 |
| POWERSHARES DB CRUDE (DXO) | +22.30% | +1683.96 |
| POWERSHARES DB CRUDE (OLO) | +7.62% | +575.27 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +56.18% | +4242.65 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -42.88% | -3238.30 |
| Direxion Small Cap Bull 3x Shares (TNA) | +81.09% | +6123.91 |
| Direxion Small Cap Bear 3x Shares (TZA) | -50.45% | -3810.00 |
| Direxion Energy Bull 3x Shares (ERX) | +82.14% | +6203.47 |
| Direxion Energy Bear 3x Shares (ERY) | -55.50% | -4191.35 |
| Direxion Financial Bull 3x Shares (FAS) | +109.69% | +8284.32 |
| Direxion Financial Bear 3x Shares (FAZ) | -65.77% | -4966.86 |
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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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Wednesday, November 26, 2008
A Rising Tide Lifts All Boats
Injections of liquidity into the banking system by the Fed continued to keep the trend moving higher on Wednesday. US markets will be closed Thursday for Thanksgiving but will reopen Friday for a light volume session before the weekend. Have a Happy Thanksgiving; it looks like the Fed has finally greased the wheels enough to get the credit markets moving again.
Change From 25 Nov 2008 To 26 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +2.91% | +247.14 |
| DIAMONDS TRUST SER 1 (DIA) | +2.79% | +236.96 |
| ULTRA DOW30 PROSHRS (DDM) | +5.10% | +432.29 |
| PT ULTRSHRT DOW30 PS (DXD) | -5.57% | -472.61 |
| S&P 500 (index) | +3.30% | +279.59 |
| S& P DEP RECEIPTS (SPY) | +3.76% | +319.14 |
| ULTRA S& P500 PROSHRS (SSO) | +6.73% | +570.63 |
| PT ULTRSHRT SP500 PS (SDS) | -6.92% | -587.09 |
| NYSE Composite (index) | +3.20% | +271.36 |
| ISHARES NYSE CMP IDX (NYC) | +3.24% | +274.47 |
| S&P SmallCap 600 (index) | +5.33% | +452.28 |
| PROSH ULTRA SMALLCAP (SAA) | +12.36% | +1048.29 |
| SHORT SMALLCAP600 PR (SBB) | -6.56% | -556.41 |
| ULTRASHORT SMALLCAP6 (SDD) | -11.17% | -947.16 |
| Russell 2000 (index) | +5.79% | +491.34 |
| ISHARE RUS 2000 INDX (IWM) | +5.99% | +508.15 |
| ULTRA RUSSELL2000 PR (UWM) | +11.18% | +947.86 |
| ULTRASHORT RUSSELL20 (TWM) | -11.74% | -995.38 |
| NASDAQ-100 (index) | +4.14% | +351.40 |
| POWERSHARES QQQ TR 1 (QQQQ) | +4.19% | +355.19 |
| ULTRA QQQ PROSHARES (QLD) | +8.25% | +699.48 |
| PT UTLRSHRT QQQ PS (QID) | -8.28% | -702.37 |
| S&P MidCap 400 (index) | +5.34% | +453.04 |
| ISHARE SP MC 400 INX (IJH) | +5.05% | +427.92 |
| ULTRA MC400 PROSHRS (MVV) | +9.24% | +783.28 |
| PT ULTRSHR MC400 PS (MZZ) | -10.16% | -861.34 |
| GREENHAVEN CONT IDX (GCC) | +2.22% | +188.43 |
| Amex Gold (index) | +5.64% | +477.91 |
| MKT VECT GOLD MNRS (GDX) | +1.63% | +138.63 |
| STREETTRACKS GOLD TR (GLD) | -0.61% | -51.38 |
| DB GOLD DBL SH ETN (DZZ) | +1.45% | +122.89 |
| DB GOLD DBL LG ETN (DGP) | -1.18% | -99.70 |
| Semiconductor Sector (index) | +7.64% | +647.45 |
| ULTRA SEMICONDUCTORS (USD) | +12.76% | +1081.56 |
| ULTRASHORT SEMICONDU (SSG) | -12.96% | -1098.83 |
| ISHARE DJ FIN SC INX (IYF) | +4.77% | +404.27 |
| ISHARES LEHMAN 20 YR (TLT) | +0.13% | +11.38 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.61% | +51.64 |
| ISHARES LEH AGG FD (AGG) | -0.38% | -32.54 |
| ISHARES GS $ INVESTO (LQD) | -0.53% | -44.79 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.31% | +26.09 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.51% | -43.01 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -0.99% | -84.22 |
| SHORT QQQ PROSHARES (PSQ) | -4.08% | -346.23 |
| SHRT DOW30 PROSHARES (DOG) | -0.82% | -69.42 |
| SHRT S& P500 PROSHRS (SH) | -3.42% | -290.16 |
| SHRT MC400 PROSHARES (MYY) | -5.08% | -430.51 |
| SHORT SMALLCAP600 PR (SBB) | -6.56% | -556.41 |
| SHORT RUSSELL2000 PR (RWM) | -5.97% | -505.86 |
| PT UTLRSHRT QQQ PS (QID) | -8.28% | -702.37 |
| PT ULTRSHRT DOW30 PS (DXD) | -5.57% | -472.61 |
| PT ULTRSHRT SP500 PS (SDS) | -6.92% | -587.09 |
| PT ULTRSHR MC400 PS (MZZ) | -10.16% | -861.34 |
| ULTRASHORT SMALLCAP6 (SDD) | -11.17% | -947.16 |
| ULTRASHORT RUSSELL20 (TWM) | -11.74% | -995.38 |
| PST ULSHT RSL1K VALU (SJF) | -6.71% | -569.10 |
| PST ULSHT RSL1K GR (SFK) | -6.76% | -573.01 |
| PST ULSHT RSL MC VAL (SJL) | -9.91% | -839.99 |
| PST ULSHT RSL MC GR (SDK) | -10.50% | -890.70 |
| PST ULTSHT RSL2K VAL (SJH) | -11.70% | -992.14 |
| PST ULSHT RSL2K GR (SKK) | -12.80% | -1085.53 |
| ULTRASHORT BASIC MAT (SMN) | -9.74% | -825.53 |
| ULTRASHORT CONSUMER (SZK) | -3.24% | -274.35 |
| ULTRASHORT CONSUMER (SCC) | -8.76% | -742.88 |
| ULTRASHORT FINANCIAL (SKF) | -9.11% | -772.34 |
| ULTRASHORT HEALTH CA (RXD) | -0.38% | -32.37 |
| ULTRASHORT INDUSTRIA (SIJ) | -8.34% | -706.79 |
| ULTRASHORT OIL & GAS (DUG) | -11.41% | -967.41 |
| ULTRASHORT REAL ESTA (SRS) | -8.79% | -745.05 |
| ULTRASHORT SEMICONDU (SSG) | -12.96% | -1098.83 |
| ULTRASHORT TECHNOLOG (REW) | -7.75% | -657.57 |
| ULTRASHORT UTILITIES (SDP) | -2.98% | -252.54 |
| PROSHARES SHR MSCI E (EUM) | -7.63% | -647.37 |
| PROSHARES SHORT MSCI (EFZ) | -1.36% | -115.29 |
| PROSHARES ULTRASHORT (EFU) | -2.27% | -192.66 |
| PROSHARES UTLRASHORT (EEV) | -14.30% | -1212.24 |
| PROSHARES US MSCI JP (EWV) | -1.70% | -144.20 |
| PROSHARES ULTRASHORT (FXP) | -21.76% | -1844.87 |
| ULTRA QQQ PROSHARES (QLD) | +8.25% | +699.48 |
| ULTRA DOW30 PROSHRS (DDM) | +5.10% | +432.29 |
| ULTRA S& P500 PROSHRS (SSO) | +6.73% | +570.63 |
| ULTRA MC400 PROSHRS (MVV) | +9.24% | +783.28 |
| PROSH ULTRA SMALLCAP (SAA) | +12.36% | +1048.29 |
| ULTRA RUSSELL2000 PR (UWM) | +11.18% | +947.86 |
| PST ULT RUS1000 VAL (UVG) | +5.48% | +464.97 |
| PST ULT RSL1000 GR (UKF) | +5.42% | +459.24 |
| PST ULT RSL MC VALU (UVU) | +8.43% | +715.06 |
| PST ULT RSL MC GR PS (UKW) | +11.32% | +959.71 |
| PST ULT RSL2000 VALU (UVT) | +11.84% | +1004.38 |
| PST ULT RSL2000 GR (UKK) | +12.03% | +1020.13 |
| ULTRA BASIC MATERIAL (UYM) | +11.11% | +942.16 |
| ULTRA CONSUMER GOODS (UGE) | +3.75% | +318.20 |
| ULTRA CONSUMER SERVI (UCC) | +8.36% | +709.10 |
| ULTRA FINANCIALS PRO (UYG) | +8.65% | +733.36 |
| ULTRA HEALTH CARE PR (RXL) | +0.84% | +70.96 |
| ULTRA INDUSTRIALS PR (UXI) | +7.34% | +622.54 |
| ULTRA OIL & GAS PROS (DIG) | +10.82% | +917.45 |
| ULTRA REAL ESTATE PR (URE) | -9.09% | -770.86 |
| ULTRA SEMICONDUCTORS (USD) | +12.76% | +1081.56 |
| ULTRA TECHNOLOGY PRO (ROM) | +8.38% | +710.62 |
| ULTRA UTILITIES PROS (UPW) | +0.97% | +82.42 |
| Other ETFs | ||
| PWRSHRS NDQ INTERNET (PNQI) | +4.79% | +405.82 |
| POWERSHARES DB BASE (BOM) | -2.68% | -227.22 |
| POWERSHARES DB BASE (BDD) | +4.81% | +408.03 |
| POWERSHARES DB BASE (BOS) | -1.19% | -100.54 |
| POWERSHARES DB BASE (BDG) | +1.76% | +149.29 |
| POWERSHARES DB CRUDE (DTO) | -7.58% | -643.12 |
| POWERSHARES DB CRUDE (SZO) | -4.07% | -345.46 |
| POWERSHARES DB CRUDE (DXO) | +17.31% | +1468.09 |
| POWERSHARES DB CRUDE (OLO) | +5.46% | +463.23 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +10.42% | +883.76 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -11.20% | -950.05 |
| Direxion Small Cap Bull 3x Shares (TNA) | +17.78% | +1507.60 |
| Direxion Small Cap Bear 3x Shares (TZA) | -17.12% | -1451.67 |
| Direxion Energy Bull 3x Shares (ERX) | +17.95% | +1522.45 |
| Direxion Energy Bear 3x Shares (ERY) | -19.52% | -1655.34 |
| Direxion Financial Bull 3x Shares (FAS) | +15.89% | +1347.14 |
| Direxion Financial Bear 3x Shares (FAZ) | -13.23% | -1121.81 |
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 . . . .
Let's Call a Spade a Spade
Let's not beat around the bushes. It's definitely not a recession, it's a Depression. Here's why---
The only time the stock and real estate markets lost more value as a pecentage of GDP was in the 1929-1932 Crash that served as our introduction into the Great Depression---and we're not far from equalling that performance right now. It's true that there are more safety nets today. For instance, when banks go belly-up, they simply reopen the next business day under new management and even honor existing checks written by depositors.
What's different today is that we may be following a path that leads to hyperinflation and the destruction of the US Dollar.
The Fed and the Treasury have been shoveling trillions of dollars to bailout the economy (8 Trillion and counting as of today). They added more debt on Tuesday (and that bolstered the market slightly, which would have otherwise plunged on the worsening fundamental picture). But, while we have been getting a mind-numbing stream of numbers of dollars bandied about, things have subtly changed. The Fed has recently (and very quietly) embarked upon a program of Quantitative Easing, which is simply a fancy name for "printing money to flood the financial system with enough liquidity to keep the ship afloat." Some of that money is ending up in the bond market---the money is being transferred to banks which don't loan it out, but buy US Government bonds instead. This is deliberate and lowers long term interest rates, making mortgages less expensive to refinance. Some of the money ends up in other markets, such as commodities and stocks.
Up until this policy change, the Fed would issue short term debt instruments and sell them on the open market to "sterilize" the injection of new money. The new policy does not sterilize the transaction, so completely new counterfeit notes are being printed and sent to the banks. By the way, if the term "Quantitative Easing" is quasi-familiar, it's what Japan did in the late Nineties to try to work its way out of its decades-long deflation. The Fed is doing it on a much grander scale, however, because the US Dollar is the reserve currency for the entire planet. The risk is that after the plan works at getting the economy moving again, the Fed will not be able to drain all this extra money from the system. That could generate high levels of inflation called "hyperinflation." Recent rallies in the Gold market, for instance, are suggesting that some investors are moving back into precious metals to hedge against potential hyperinflation in the dollar.
Some of this new money is being used to buy Fannie Mae and Freddie Mac mortgage paper. In other words, two government-sponsored institutions create and sell mortgage debt, which is then bought using newly-printed money from the Fed. This may be a sign that China and other foreign investors who have been propping up the market have had enough and are pulling their money out of agency bonds. And, if they're pulling out of agency bonds, could their departure from buying regular government bonds be far behind? The Fed is clearly running in full-out panic mode right now as nothing they've done so far has been working to keep the economy from sliding deeper into depression. The fire crew has all the water hoses cranking, but the fire is still raging and spreading.
Russian Predicts Breakup of the USA
This from Internet news sources:
A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.
Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."
The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.
When asked when the U.S. economy would collapse, Panarin said: "It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."
When asked who would replace the U.S. in regulating world markets, he said: "Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia."
Asked why he expected the U.S. to break up into separate parts, he said: "A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles."
He also cited the "vulnerable political setup", "lack of unified national laws", and "divisions among the elite, which have become clear in these crisis conditions."
He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.
As we recall, that post-breakup configuration is straight out of Robert A. Heinlein's Friday speculative fiction novel. Maybe so....
Add the Russian professor to the list of those forecasting this event, which includes Ravi Batra, the Southern Methodist University professor in Dallas who correctly predicted the breakup of the Soviet Union a decade before the event.
Change From 24 Nov 2008 To 25 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.43% | +36.08 |
| DIAMONDS TRUST SER 1 (DIA) | +1.08% | +91.58 |
| ULTRA DOW30 PROSHRS (DDM) | +4.58% | +386.68 |
| PT ULTRSHRT DOW30 PS (DXD) | -3.00% | -253.25 |
| S&P 500 (index) | +0.49% | +41.53 |
| S& P DEP RECEIPTS (SPY) | +0.70% | +59.45 |
| ULTRA S& P500 PROSHRS (SSO) | +3.04% | +257.05 |
| PT ULTRSHRT SP500 PS (SDS) | -3.33% | -280.88 |
| NYSE Composite (index) | +1.16% | +97.85 |
| ISHARES NYSE CMP IDX (NYC) | +1.29% | +109.00 |
| S&P SmallCap 600 (index) | +1.23% | +103.78 |
| PROSH ULTRA SMALLCAP (SAA) | +1.56% | +131.93 |
| SHORT SMALLCAP600 PR (SBB) | -1.69% | -142.62 |
| ULTRASHORT SMALLCAP6 (SDD) | -3.30% | -278.65 |
| Russell 2000 (index) | +1.46% | +123.33 |
| ISHARE RUS 2000 INDX (IWM) | +1.66% | +139.75 |
| ULTRA RUSSELL2000 PR (UWM) | +3.57% | +301.17 |
| ULTRASHORT RUSSELL20 (TWM) | -3.65% | -308.28 |
| NASDAQ-100 (index) | -1.47% | -124.42 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.46% | -38.79 |
| ULTRA QQQ PROSHARES (QLD) | -0.68% | -57.65 |
| PT UTLRSHRT QQQ PS (QID) | +0.77% | +65.04 |
| S&P MidCap 400 (index) | +1.92% | +162.46 |
| ISHARE SP MC 400 INX (IJH) | +2.22% | +187.43 |
| ULTRA MC400 PROSHRS (MVV) | +4.92% | +415.45 |
| PT ULTRSHR MC400 PS (MZZ) | -5.09% | -430.03 |
| GREENHAVEN CONT IDX (GCC) | -1.28% | -108.05 |
| Amex Gold (index) | +0.26% | +21.69 |
| MKT VECT GOLD MNRS (GDX) | +4.30% | +363.38 |
| STREETTRACKS GOLD TR (GLD) | -0.05% | -4.17 |
| DB GOLD DBL SH ETN (DZZ) | +0.35% | +29.24 |
| DB GOLD DBL LG ETN (DGP) | +0.56% | +47.29 |
| Semiconductor Sector (index) | -2.19% | -184.59 |
| ULTRA SEMICONDUCTORS (USD) | -3.05% | -257.55 |
| ULTRASHORT SEMICONDU (SSG) | +3.96% | +334.76 |
| ISHARE DJ FIN SC INX (IYF) | +4.20% | +354.43 |
| ISHARES LEHMAN 20 YR (TLT) | +2.94% | +248.36 |
| ISHARESLEHMAN 7-10YR (IEF) | +1.72% | +144.97 |
| ISHARES LEH AGG FD (AGG) | +2.49% | +210.63 |
| ISHARES GS $ INVESTO (LQD) | +0.48% | +40.14 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.08% | +7.00 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -3.52% | -297.47 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -5.00% | -422.25 |
| SHORT QQQ PROSHARES (PSQ) | +0.06% | +5.04 |
| SHRT DOW30 PROSHARES (DOG) | -1.09% | -92.19 |
| SHRT S& P500 PROSHRS (SH) | -1.84% | -155.12 |
| SHRT MC400 PROSHARES (MYY) | -1.78% | -150.63 |
| SHORT SMALLCAP600 PR (SBB) | -1.69% | -142.62 |
| SHORT RUSSELL2000 PR (RWM) | -1.72% | -145.28 |
| PT UTLRSHRT QQQ PS (QID) | +0.77% | +65.04 |
| PT ULTRSHRT DOW30 PS (DXD) | -3.00% | -253.25 |
| PT ULTRSHRT SP500 PS (SDS) | -3.33% | -280.88 |
| PT ULTRSHR MC400 PS (MZZ) | -5.09% | -430.03 |
| ULTRASHORT SMALLCAP6 (SDD) | -3.30% | -278.65 |
| ULTRASHORT RUSSELL20 (TWM) | -3.65% | -308.28 |
| PST ULSHT RSL1K VALU (SJF) | -3.82% | -322.78 |
| PST ULSHT RSL1K GR (SFK) | -1.35% | -114.19 |
| PST ULSHT RSL MC VAL (SJL) | -6.70% | -565.91 |
| PST ULSHT RSL MC GR (SDK) | -3.36% | -283.85 |
| PST ULTSHT RSL2K VAL (SJH) | -4.36% | -367.89 |
| PST ULSHT RSL2K GR (SKK) | -5.29% | -446.65 |
| ULTRASHORT BASIC MAT (SMN) | -6.09% | -514.61 |
| ULTRASHORT CONSUMER (SZK) | -0.12% | -10.07 |
| ULTRASHORT CONSUMER (SCC) | -3.77% | -318.26 |
| ULTRASHORT FINANCIAL (SKF) | -10.27% | -867.20 |
| ULTRASHORT HEALTH CA (RXD) | -3.34% | -281.95 |
| ULTRASHORT INDUSTRIA (SIJ) | -0.79% | -66.50 |
| ULTRASHORT OIL & GAS (DUG) | -1.28% | -107.89 |
| ULTRASHORT REAL ESTA (SRS) | -8.44% | -712.85 |
| ULTRASHORT SEMICONDU (SSG) | +3.96% | +334.76 |
| ULTRASHORT TECHNOLOG (REW) | +1.85% | +156.44 |
| ULTRASHORT UTILITIES (SDP) | -0.84% | -70.76 |
| PROSHARES SHR MSCI E (EUM) | +2.40% | +202.79 |
| PROSHARES SHORT MSCI (EFZ) | -1.11% | -93.49 |
| PROSHARES ULTRASHORT (EFU) | -2.53% | -213.38 |
| PROSHARES UTLRASHORT (EEV) | +2.95% | +249.39 |
| PROSHARES US MSCI JP (EWV) | -1.23% | -104.11 |
| PROSHARES ULTRASHORT (FXP) | +2.47% | +208.39 |
| ULTRA QQQ PROSHARES (QLD) | -0.68% | -57.65 |
| ULTRA DOW30 PROSHRS (DDM) | +4.58% | +386.68 |
| ULTRA S& P500 PROSHRS (SSO) | +3.04% | +257.05 |
| ULTRA MC400 PROSHRS (MVV) | +4.92% | +415.45 |
| PROSH ULTRA SMALLCAP (SAA) | +1.56% | +131.93 |
| ULTRA RUSSELL2000 PR (UWM) | +3.57% | +301.17 |
| PST ULT RUS1000 VAL (UVG) | +4.82% | +407.04 |
| PST ULT RSL1000 GR (UKF) | +2.68% | +226.39 |
| PST ULT RSL MC VALU (UVU) | +4.12% | +347.71 |
| PST ULT RSL MC GR PS (UKW) | +2.65% | +223.50 |
| PST ULT RSL2000 VALU (UVT) | +3.82% | +322.22 |
| PST ULT RSL2000 GR (UKK) | +2.88% | +243.29 |
| ULTRA BASIC MATERIAL (UYM) | +2.32% | +196.19 |
| ULTRA CONSUMER GOODS (UGE) | +1.31% | +110.34 |
| ULTRA CONSUMER SERVI (UCC) | +5.36% | +452.60 |
| ULTRA FINANCIALS PRO (UYG) | +9.68% | +817.64 |
| ULTRA HEALTH CARE PR (RXL) | +1.97% | +166.26 |
| ULTRA INDUSTRIALS PR (UXI) | +4.77% | +403.13 |
| ULTRA OIL & GAS PROS (DIG) | +3.53% | +298.07 |
| ULTRA REAL ESTATE PR (URE) | +15.68% | +1323.82 |
| ULTRA SEMICONDUCTORS (USD) | -3.05% | -257.55 |
| ULTRA TECHNOLOGY PRO (ROM) | -2.02% | -170.14 |
| ULTRA UTILITIES PROS (UPW) | +2.91% | +245.70 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +0.74% | +62.43 |
| POWERSHARES DB BASE (BDD) | -2.64% | -222.52 |
| POWERSHARES DB BASE (BOS) | +0.46% | +38.52 |
| POWERSHARES DB CRUDE (DTO) | +6.62% | +559.21 |
| POWERSHARES DB CRUDE (SZO) | +4.33% | +365.40 |
| POWERSHARES DB CRUDE (DXO) | -10.19% | -860.18 |
| POWERSHARES DB CRUDE (OLO) | +1.69% | +143.11 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +5.58% | +471.33 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -5.43% | -458.77 |
| Direxion Small Cap Bull 3x Shares (TNA) | +4.83% | +407.63 |
| Direxion Small Cap Bear 3x Shares (TZA) | -4.75% | -400.72 |
| Direxion Energy Bull 3x Shares (ERX) | +4.04% | +341.41 |
| Direxion Energy Bear 3x Shares (ERY) | -2.25% | -190.18 |
| Direxion Financial Bull 3x Shares (FAS) | +18.15% | +1532.60 |
| Direxion Financial Bear 3x Shares (FAZ) | -14.76% | -1246.16 |
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Monday, November 24, 2008
Zombie Bank Stocks Lead Monday Bailout Rally
Insolvency in Citibank resulted in another government bailout over the weekend, leading to big gains in bank stocks. Unfortunately, the buyers of bank stocks may not realize that not only will no bank be allowed to fail, no bank will be worth anything to common stock holders in the future (see CNBC video interview with Ed Yardeni and Mark MacQueen). That's because as the government buys preferred shares in failing banks, the equity left for existing common shareholders is crowded out. Although Citibank common shares were bought heavily on Monday, it's very likely that the stock is actually worthless---it's going to zero whether the government keeps pumping money into them or not. As the pieces of Citibank are carved up and sold off, the preferred stock holders (mostly taxpayers) and bond holders will be paid off first, then the common stock holders if there's anything left.
What we are seeing is the total demolition of the private banking system, something we've advocated being done in a more systematic way than the "put out a fire each weekend methodology" the government is doing in a very reactionary fashion. It's being done one bank at a time, but it is happening---and the rate is likely to continue rising as thousands of banks are technically insolvent right now. The problems will affect the community and regional banks as well, eventually. The whole system is like a house built on sand.
A private bank is a warehouse for deposits. The depositor is given a receipt by the banker when she leaves her money in the bank. The banker turns around and loans some of her money to another customer, who then deposits that loan in the bank and is given another warehouse receipt for that deposit. That second receipt is actually a counterfeit because the customer who took out the loan doesn't own the money---only the original depositor owns the money and has the right to hold a receipt for it. In other words, for each dollar on deposit, there are now two warehouse receipts for the same dollar, one of which is a valid warehouse receipt which allows the original depositor to claim her dollar, and the other a counterfeit warehouse receipt printed by the banker which is a claim on the same dollar. As money is loaned out and deposited over and over again, the banker prints counterfeit warehouse receipts for those deposits as if they were separate dollars---but, they aren't. If the same dollar is loaned out forty times, there are thirty-nine counterfeit receipts floating around the economy for that one real dollar deposited in the bank.
It's not illegal for the banker to print counterfeit receipts, as it would be for any other person, because the government has decreed that banks have the power to print counterfeit warehouse receipts. In return for the power to print money, the banker agrees to be subject to regulation by the government, which should (in theory) keep him from going wild and printing too many receipts. After all, if the original depositor presents her warehouse receipt to the banker and demands her money be returned to her, it also means that forty times that much money must be withdrawn from circulation. This is the power of de-leveraging that banks are suffering from today. As deposits are withdrawn from the bank, all of those counterfeit receipts must be called in (or replaced with newly-raised capital) by the banker. If the banker cannot raise new capital, he is forced to demand money from those who have borrowed it and he is not about to make any new loans since he is underwater on the old loans until all of those counterfeit receipts for the original deposit are backed up by his reserve requirement.
By allowing these private institutions to print counterfeit warehouse receipts for deposits, the system has set the banks up for failure. A private banking system is a throwback to the Middle Ages and cannot survive in the modern world. Trying to "regulate" what is an obsolete system clearly does not and can not work. In a free society, any private bank with the power to print money will transfer as much money as it requires to buy the favor of its regulators and the bank will eventually get its way, becoming more and more of an unstable system and finally spinning completely out of control. Inevitably, we have financial Armageddon, just as we're seeing right now. It happens about every twenty years, sometimes in a mild fashion and other times in a crisis fashion. When the safeguards that were put in place by government following the last big banking crisis---the Great Depression---were removed by the banker-controlled government lackeys, it was like opening the floodgates of banking hell---and we're now living in a world where the debt bomb is pulling the world economy into a black hole.
If the government simply injects capital into the banks until they are "healthy" again, they are setting the system up for failure again for our children and grandchildren in the next cycle. Inevitably, we will experience yet another financial meltdown in the future which takes the economy down with it. Is this the way Americans want to live? The answer is a resounding: "No". We need the new Administration to realize that we have an obsolete financial system which will never work properly. We need to get rid of it completely and replace it with one that works permanently.
In any case, the market continued the last hour rally from Friday on the idea that government bailouts would cure the underlying problem (when we know they have only made things worse so far):
Change From 21 Nov 2008 To 24 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +4.93% | +396.97 |
| DIAMONDS TRUST SER 1 (DIA) | +4.17% | +335.68 |
| ULTRA DOW30 PROSHRS (DDM) | +6.28% | +505.64 |
| PT ULTRSHRT DOW30 PS (DXD) | -8.06% | -648.86 |
| S&P 500 (index) | +6.64% | +534.45 |
| S& P DEP RECEIPTS (SPY) | +7.17% | +576.77 |
| ULTRA S& P500 PROSHRS (SSO) | +11.50% | +925.66 |
| PT ULTRSHRT SP500 PS (SDS) | -11.37% | -914.79 |
| NYSE Composite (index) | +7.13% | +573.88 |
| ISHARES NYSE CMP IDX (NYC) | +6.88% | +553.35 |
| S&P SmallCap 600 (index) | +6.82% | +549.10 |
| PROSH ULTRA SMALLCAP (SAA) | +12.42% | +999.49 |
| SHORT SMALLCAP600 PR (SBB) | -6.10% | -491.00 |
| ULTRASHORT SMALLCAP6 (SDD) | -12.99% | -1044.95 |
| Russell 2000 (index) | +7.44% | +598.92 |
| ISHARE RUS 2000 INDX (IWM) | +7.04% | +566.26 |
| ULTRA RUSSELL2000 PR (UWM) | +13.09% | +1053.49 |
| ULTRASHORT RUSSELL20 (TWM) | -13.98% | -1124.65 |
| NASDAQ-100 (index) | +6.04% | +485.99 |
| POWERSHARES QQQ TR 1 (QQQQ) | +6.11% | +491.78 |
| ULTRA QQQ PROSHARES (QLD) | +11.91% | +958.34 |
| PT UTLRSHRT QQQ PS (QID) | -12.13% | -975.89 |
| S&P MidCap 400 (index) | +7.47% | +601.42 |
| ISHARE SP MC 400 INX (IJH) | +7.28% | +585.82 |
| ULTRA MC400 PROSHRS (MVV) | +13.80% | +1110.48 |
| PT ULTRSHR MC400 PS (MZZ) | -14.02% | -1127.83 |
| GREENHAVEN CONT IDX (GCC) | +4.34% | +349.18 |
| Amex Gold (index) | +6.92% | +556.59 |
| MKT VECT GOLD MNRS (GDX) | +6.95% | +559.02 |
| STREETTRACKS GOLD TR (GLD) | +2.61% | +210.22 |
| DB GOLD DBL SH ETN (DZZ) | -8.05% | -648.12 |
| DB GOLD DBL LG ETN (DGP) | +4.35% | +350.07 |
| Semiconductor Sector (index) | +6.09% | +490.23 |
| ULTRA SEMICONDUCTORS (USD) | +11.08% | +891.59 |
| ULTRASHORT SEMICONDU (SSG) | -12.45% | -1001.64 |
| ISHARE DJ FIN SC INX (IYF) | +13.95% | +1122.81 |
| ISHARES LEHMAN 20 YR (TLT) | -1.56% | -125.87 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.94% | -75.36 |
| ISHARES LEH AGG FD (AGG) | -0.01% | -0.83 |
| ISHARES GS $ INVESTO (LQD) | -0.44% | -35.43 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.25% | -19.97 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +1.79% | +144.28 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +2.67% | +215.15 |
| SHORT QQQ PROSHARES (PSQ) | -5.96% | -479.96 |
| SHRT DOW30 PROSHARES (DOG) | -4.87% | -391.61 |
| SHRT S& P500 PROSHRS (SH) | -5.24% | -421.88 |
| SHRT MC400 PROSHARES (MYY) | -7.30% | -587.57 |
| SHORT SMALLCAP600 PR (SBB) | -6.10% | -491.00 |
| SHORT RUSSELL2000 PR (RWM) | -6.78% | -545.69 |
| PT UTLRSHRT QQQ PS (QID) | -12.13% | -975.89 |
| PT ULTRSHRT DOW30 PS (DXD) | -8.06% | -648.86 |
| PT ULTRSHRT SP500 PS (SDS) | -11.37% | -914.79 |
| PT ULTRSHR MC400 PS (MZZ) | -14.02% | -1127.83 |
| ULTRASHORT SMALLCAP6 (SDD) | -12.99% | -1044.95 |
| ULTRASHORT RUSSELL20 (TWM) | -13.98% | -1124.65 |
| PST ULSHT RSL1K VALU (SJF) | -15.09% | -1214.53 |
| PST ULSHT RSL1K GR (SFK) | -10.35% | -832.74 |
| PST ULSHT RSL MC VAL (SJL) | -14.96% | -1203.86 |
| PST ULSHT RSL MC GR (SDK) | -14.98% | -1205.45 |
| PST ULTSHT RSL2K VAL (SJH) | -15.30% | -1230.88 |
| PST ULSHT RSL2K GR (SKK) | -12.12% | -975.12 |
| ULTRASHORT BASIC MAT (SMN) | -14.06% | -1131.10 |
| ULTRASHORT CONSUMER (SZK) | -7.91% | -636.58 |
| ULTRASHORT CONSUMER (SCC) | -12.90% | -1038.16 |
| ULTRASHORT FINANCIAL (SKF) | -28.73% | -2311.55 |
| ULTRASHORT HEALTH CA (RXD) | -5.85% | -470.51 |
| ULTRASHORT INDUSTRIA (SIJ) | -14.27% | -1148.01 |
| ULTRASHORT OIL & GAS (DUG) | -12.60% | -1013.64 |
| ULTRASHORT REAL ESTA (SRS) | -33.91% | -2728.44 |
| ULTRASHORT SEMICONDU (SSG) | -12.45% | -1001.64 |
| ULTRASHORT TECHNOLOG (REW) | -12.80% | -1030.25 |
| ULTRASHORT UTILITIES (SDP) | -5.83% | -468.75 |
| PROSHARES SHR MSCI E (EUM) | -6.11% | -491.47 |
| PROSHARES SHORT MSCI (EFZ) | -6.76% | -543.94 |
| PROSHARES ULTRASHORT (EFU) | -13.21% | -1063.15 |
| PROSHARES UTLRASHORT (EEV) | -18.05% | -1452.48 |
| PROSHARES US MSCI JP (EWV) | -13.06% | -1050.71 |
| PROSHARES ULTRASHORT (FXP) | -3.89% | -313.12 |
| ULTRA QQQ PROSHARES (QLD) | +11.91% | +958.34 |
| ULTRA DOW30 PROSHRS (DDM) | +6.28% | +505.64 |
| ULTRA S& P500 PROSHRS (SSO) | +11.50% | +925.66 |
| ULTRA MC400 PROSHRS (MVV) | +13.80% | +1110.48 |
| PROSH ULTRA SMALLCAP (SAA) | +12.42% | +999.49 |
| ULTRA RUSSELL2000 PR (UWM) | +13.09% | +1053.49 |
| PST ULT RUS1000 VAL (UVG) | +15.24% | +1226.45 |
| PST ULT RSL1000 GR (UKF) | +10.30% | +828.44 |
| PST ULT RSL MC VALU (UVU) | +19.39% | +1560.02 |
| PST ULT RSL MC GR PS (UKW) | +14.86% | +1196.09 |
| PST ULT RSL2000 VALU (UVT) | +15.04% | +1210.23 |
| PST ULT RSL2000 GR (UKK) | +13.87% | +1116.06 |
| ULTRA BASIC MATERIAL (UYM) | +14.43% | +1161.50 |
| ULTRA CONSUMER GOODS (UGE) | +5.58% | +449.13 |
| ULTRA CONSUMER SERVI (UCC) | +14.30% | +1150.30 |
| ULTRA FINANCIALS PRO (UYG) | +27.14% | +2183.45 |
| ULTRA HEALTH CARE PR (RXL) | +7.29% | +586.48 |
| ULTRA INDUSTRIALS PR (UXI) | +10.11% | +813.10 |
| ULTRA OIL & GAS PROS (DIG) | +12.02% | +966.79 |
| ULTRA REAL ESTATE PR (URE) | +25.42% | +2045.37 |
| ULTRA SEMICONDUCTORS (USD) | +11.08% | +891.59 |
| ULTRA TECHNOLOGY PRO (ROM) | +11.27% | +906.58 |
| ULTRA UTILITIES PROS (UPW) | +3.09% | +248.94 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | -7.73% | -621.70 |
| POWERSHARES DB BASE (BDD) | +13.08% | +1052.43 |
| POWERSHARES DB BASE (BOS) | -4.59% | -369.64 |
| POWERSHARES DB CRUDE (DTO) | -7.25% | -583.38 |
| POWERSHARES DB CRUDE (SZO) | -4.77% | -383.44 |
| POWERSHARES DB CRUDE (DXO) | +17.67% | +1421.45 |
| POWERSHARES DB CRUDE (OLO) | +2.31% | +186.04 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +16.87% | +1357.66 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -17.24% | -1386.83 |
| Direxion Small Cap Bull 3x Shares (TNA) | +20.85% | +1677.70 |
| Direxion Small Cap Bear 3x Shares (TZA) | -21.27% | -1711.29 |
| Direxion Energy Bull 3x Shares (ERX) | +16.73% | +1345.88 |
| Direxion Energy Bear 3x Shares (ERY) | -20.53% | -1652.22 |
| Direxion Financial Bull 3x Shares (FAS) | +31.19% | +2509.48 |
| Direxion Financial Bear 3x Shares (FAZ) | -42.86% | -3448.47 |
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
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Sunday, November 23, 2008
Obama Nominates Fed Head to Treasury---Market Celebrates Action
President-elect Obama finally showed he's taking the leadership role away from the titular, lame-duck President and working to help dig the country out of the hole the Republicans have blown in the worldwide economy. Friday's announcement that he was nominating the New York Fed head to be Secretary of the Treasury was greeted with a vote of great confidence by the stock market, which rallied over 500 Dow points within minutes of the closing bell.
While the problems are many and will take a substantial amount of time to fix (decades, in fact), we have at least a forward-looking and fresher perspective on the financial meltdown now. The current Secretary of the Treasury, Paulson, seems to have given up the job after waffling from one pole to another and creating the impression of a rudderless ship of state. Nothing Paulson has done has helped (and may have delayed the recovery by promising help, then reneging on it). For example, the bailout money was supposed to have taken toxic mortgage paper off the market, allowing banks to bolster their balance sheets and start lending again to get the economy moving. Instead, what we have seen is Paulson giving the banks money which doesn't help their leverage position in the least---and the banks are still in the position of not lending. The bailout money is being used for acquisitions, not lending, which is leaving a huge black hole in the machinery of the economy. This is certainly not what the Congress or the American people were promised would be done with the funds by Paulson.
What's amazing is that Congress is standing idly by and letting Paulson get away with this fraud. It's also letting the banks squirrel away taxpayer money without any assurance the banks will be increasing their lending. Congress should immediately demand that Paulson resign and that the new Obama-nominated Treasury Secretary be appointed interim Secretary to take control of the mess and, hopefully, get a couple of months' headstart on fixing the problem.
As we said, though, the market loved the fact that an experienced Fed chief, who has been intimately working to fix the crisis at the helm of the New York Federal Reserve Bank, will be the next Treasury Secretary, even if it will take two more months to come to fruition:
Change From 20 Nov 2008 To 21 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +6.54% | +494.13 |
| DIAMONDS TRUST SER 1 (DIA) | +5.89% | +444.84 |
| ULTRA DOW30 PROSHRS (DDM) | +12.23% | +923.64 |
| PT ULTRSHRT DOW30 PS (DXD) | -13.00% | -982.00 |
| S&P 500 (index) | +5.85% | +441.53 |
| S& P DEP RECEIPTS (SPY) | +5.34% | +403.18 |
| ULTRA S& P500 PROSHRS (SSO) | +11.57% | +874.02 |
| PT ULTRSHRT SP500 PS (SDS) | -11.74% | -887.01 |
| NYSE Composite (index) | +6.63% | +501.05 |
| ISHARES NYSE CMP IDX (NYC) | +6.71% | +506.55 |
| S&P SmallCap 600 (index) | +5.71% | +431.28 |
| PROSH ULTRA SMALLCAP (SAA) | +13.05% | +985.55 |
| SHORT SMALLCAP600 PR (SBB) | -5.18% | -391.41 |
| ULTRASHORT SMALLCAP6 (SDD) | -11.90% | -899.08 |
| Russell 2000 (index) | +5.51% | +416.12 |
| ISHARE RUS 2000 INDX (IWM) | +5.48% | +413.58 |
| ULTRA RUSSELL2000 PR (UWM) | +12.05% | +910.35 |
| ULTRASHORT RUSSELL20 (TWM) | -10.68% | -806.96 |
| NASDAQ-100 (index) | +4.48% | +338.59 |
| POWERSHARES QQQ TR 1 (QQQQ) | +4.34% | +327.98 |
| ULTRA QQQ PROSHARES (QLD) | +7.85% | +593.05 |
| PT UTLRSHRT QQQ PS (QID) | -8.60% | -649.53 |
| S&P MidCap 400 (index) | +5.85% | +441.60 |
| ISHARE SP MC 400 INX (IJH) | +5.60% | +423.29 |
| ULTRA MC400 PROSHRS (MVV) | +12.25% | +925.46 |
| PT ULTRSHR MC400 PS (MZZ) | -11.04% | -834.08 |
| GREENHAVEN CONT IDX (GCC) | +2.95% | +222.45 |
| Amex Gold (index) | +27.29% | +2060.65 |
| MKT VECT GOLD MNRS (GDX) | +27.24% | +2057.06 |
| STREETTRACKS GOLD TR (GLD) | +7.35% | +555.24 |
| DB GOLD DBL SH ETN (DZZ) | -15.34% | -1158.29 |
| DB GOLD DBL LG ETN (DGP) | +13.99% | +1056.54 |
| Semiconductor Sector (index) | +5.19% | +392.34 |
| ULTRA SEMICONDUCTORS (USD) | +4.00% | +302.09 |
| ULTRASHORT SEMICONDU (SSG) | -9.95% | -751.49 |
| ISHARE DJ FIN SC INX (IYF) | +3.61% | +272.41 |
| ISHARES LEHMAN 20 YR (TLT) | -1.45% | -109.20 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.92% | -69.28 |
| ISHARES LEH AGG FD (AGG) | -0.80% | -60.48 |
| ISHARES GS $ INVESTO (LQD) | +1.16% | +87.46 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.17% | -12.47 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +1.72% | +130.10 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +3.68% | +277.64 |
| SHORT QQQ PROSHARES (PSQ) | -4.17% | -314.65 |
| SHRT DOW30 PROSHARES (DOG) | -5.95% | -449.32 |
| SHRT S& P500 PROSHRS (SH) | -6.32% | -477.35 |
| SHRT MC400 PROSHARES (MYY) | -6.15% | -464.60 |
| SHORT SMALLCAP600 PR (SBB) | -5.18% | -391.41 |
| SHORT RUSSELL2000 PR (RWM) | -5.53% | -417.33 |
| PT UTLRSHRT QQQ PS (QID) | -8.60% | -649.53 |
| PT ULTRSHRT DOW30 PS (DXD) | -13.00% | -982.00 |
| PT ULTRSHRT SP500 PS (SDS) | -11.74% | -887.01 |
| PT ULTRSHR MC400 PS (MZZ) | -11.04% | -834.08 |
| ULTRASHORT SMALLCAP6 (SDD) | -11.90% | -899.08 |
| ULTRASHORT RUSSELL20 (TWM) | -10.68% | -806.96 |
| PST ULSHT RSL1K VALU (SJF) | -12.81% | -967.78 |
| PST ULSHT RSL1K GR (SFK) | -12.18% | -919.76 |
| PST ULSHT RSL MC VAL (SJL) | -8.89% | -671.42 |
| PST ULSHT RSL MC GR (SDK) | -12.47% | -941.39 |
| PST ULTSHT RSL2K VAL (SJH) | -11.93% | -901.11 |
| PST ULSHT RSL2K GR (SKK) | -10.82% | -817.37 |
| ULTRASHORT BASIC MAT (SMN) | -20.55% | -1552.06 |
| ULTRASHORT CONSUMER (SZK) | -10.14% | -765.61 |
| ULTRASHORT CONSUMER (SCC) | -9.01% | -680.56 |
| ULTRASHORT FINANCIAL (SKF) | -6.98% | -527.47 |
| ULTRASHORT HEALTH CA (RXD) | -8.01% | -605.22 |
| ULTRASHORT INDUSTRIA (SIJ) | -13.32% | -1006.03 |
| ULTRASHORT OIL & GAS (DUG) | -22.33% | -1686.58 |
| ULTRASHORT REAL ESTA (SRS) | -16.46% | -1243.09 |
| ULTRASHORT SEMICONDU (SSG) | -9.95% | -751.49 |
| ULTRASHORT TECHNOLOG (REW) | -9.36% | -707.16 |
| ULTRASHORT UTILITIES (SDP) | -16.42% | -1240.00 |
| PROSHARES SHR MSCI E (EUM) | -14.40% | -1087.25 |
| PROSHARES SHORT MSCI (EFZ) | -7.04% | -531.56 |
| PROSHARES ULTRASHORT (EFU) | -13.92% | -1051.36 |
| PROSHARES UTLRASHORT (EEV) | -22.66% | -1711.50 |
| PROSHARES US MSCI JP (EWV) | -8.23% | -621.85 |
| PROSHARES ULTRASHORT (FXP) | -30.65% | -2314.41 |
| ULTRA QQQ PROSHARES (QLD) | +7.85% | +593.05 |
| ULTRA DOW30 PROSHRS (DDM) | +12.23% | +923.64 |
| ULTRA S& P500 PROSHRS (SSO) | +11.57% | +874.02 |
| ULTRA MC400 PROSHRS (MVV) | +12.25% | +925.46 |
| PROSH ULTRA SMALLCAP (SAA) | +13.05% | +985.55 |
| ULTRA RUSSELL2000 PR (UWM) | +12.05% | +910.35 |
| PST ULT RUS1000 VAL (UVG) | +10.90% | +823.24 |
| PST ULT RSL1000 GR (UKF) | +12.02% | +908.13 |
| PST ULT RSL MC VALU (UVU) | +7.37% | +556.64 |
| PST ULT RSL MC GR PS (UKW) | +13.09% | +988.22 |
| PST ULT RSL2000 VALU (UVT) | +10.51% | +793.91 |
| PST ULT RSL2000 GR (UKK) | +10.83% | +817.64 |
| ULTRA BASIC MATERIAL (UYM) | +17.00% | +1283.89 |
| ULTRA CONSUMER GOODS (UGE) | +13.89% | +1049.23 |
| ULTRA CONSUMER SERVI (UCC) | +7.74% | +584.47 |
| ULTRA FINANCIALS PRO (UYG) | +6.42% | +484.64 |
| ULTRA HEALTH CARE PR (RXL) | +7.13% | +538.43 |
| ULTRA INDUSTRIALS PR (UXI) | +11.75% | +887.35 |
| ULTRA OIL & GAS PROS (DIG) | +22.78% | +1720.60 |
| ULTRA REAL ESTATE PR (URE) | +16.16% | +1220.15 |
| ULTRA SEMICONDUCTORS (USD) | +4.00% | +302.09 |
| ULTRA TECHNOLOGY PRO (ROM) | +9.38% | +708.46 |
| ULTRA UTILITIES PROS (UPW) | +16.96% | +1280.80 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -2.46% | -185.55 |
| POWERSHARES DB BASE (BOM) | +2.16% | +162.80 |
| POWERSHARES DB BASE (BDD) | -2.89% | -218.55 |
| POWERSHARES DB BASE (BOS) | +0.78% | +58.89 |
| POWERSHARES DB BASE (BDG) | +1.47% | +110.74 |
| POWERSHARES DB CRUDE (DTO) | -2.98% | -225.05 |
| POWERSHARES DB CRUDE (SZO) | -1.91% | -144.48 |
| POWERSHARES DB CRUDE (DXO) | +7.09% | +535.80 |
| POWERSHARES DB CRUDE (OLO) | +1.37% | +103.25 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +11.31% | +854.20 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -15.69% | -1184.64 |
| Direxion Small Cap Bull 3x Shares (TNA) | +15.52% | +1171.91 |
| Direxion Small Cap Bear 3x Shares (TZA) | -16.59% | -1253.16 |
| Direxion Energy Bull 3x Shares (ERX) | +33.69% | +2544.37 |
| Direxion Energy Bear 3x Shares (ERY) | -32.94% | -2487.78 |
| Direxion Financial Bull 3x Shares (FAS) | +9.22% | +695.95 |
| Direxion Financial Bear 3x Shares (FAZ) | -12.23% | -923.27 |
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 . . . .
Thursday, November 20, 2008
Dead Men Driving The Bus
The "Once Big 3" automakers seemed to snag a loan Thursday (later denied). We've strongly suggested this is like giving zombies electric wheelchairs. These are dead companies with no future, needing substantial reorganization as a first step, and the US taxpayer is again being called upon to gift them money (it will very likely never be repaid). It appears that you don't actually have to be a bank to get your hands on Treasury funds---you just have to have enough Congressmen on the payroll.
But, just in case your bank is Citibank, it's about to go under. This was somewhat surprising considering that the government and their Saudi Arabian sponsors have already pushed billions into the bank. It appears that the King's men can't put Humpty back together again. Or, maybe the King's men have resigned themselves after losing the Presidential Election.
Indeed, there's a power vacuum in Washington that's being felt both on Wall Street and on Main Street. We have 61 days until President Obama takes over and all we have now is an absentee President and a zombie Treasury Secretary. Maybe Charles Gasparino's summary of Paulson was correct---he's only good at stabbing people in the back. In this case, it's the economy he's stabbed in the back by promising one thing and doing another. It was doubtful that buying troubled assets would actually work, but it's clear that buying banks isn't working at all.
While the economy burns, President-Elect Obama has been strangely silent about the crisis. Since its close on Election Day, the S&P 500 Index is down 25.07%, or 2,413.52 Dow points, yet the new President seems to be as out-of-touch about the situation as the Bush currently in the White House. Shades of things to come? We hope not. He may just be caught off-guard and unready to name his Treasury Secretary this early. Apparently, he will nominate Hillary Clinton for Secretary of State immediately following Thanksgiving next week.
The stock market reflected the lack of direction from Washington as it jerked nervously from one news headline to another before diving over the cliff and landing at its lowest low in 11½ years (since 15 April 1997):
Change From 19 Nov 2008 To 20 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -5.56% | -444.99 |
| DIAMONDS TRUST SER 1 (DIA) | -5.35% | -427.93 |
| ULTRA DOW30 PROSHRS (DDM) | -10.60% | -848.11 |
| PT ULTRSHRT DOW30 PS (DXD) | +10.49% | +839.01 |
| S&P 500 (index) | -6.57% | -525.70 |
| S& P DEP RECEIPTS (SPY) | -7.53% | -602.44 |
| ULTRA S& P500 PROSHRS (SSO) | -14.29% | -1142.98 |
| PT ULTRSHRT SP500 PS (SDS) | +13.31% | +1064.27 |
| NYSE Composite (index) | -7.20% | -575.66 |
| ISHARES NYSE CMP IDX (NYC) | -7.68% | -614.25 |
| S&P SmallCap 600 (index) | -4.92% | -393.52 |
| PROSH ULTRA SMALLCAP (SAA) | -13.87% | -1108.97 |
| SHORT SMALLCAP600 PR (SBB) | +6.16% | +492.66 |
| ULTRASHORT SMALLCAP6 (SDD) | +12.49% | +998.66 |
| Russell 2000 (index) | -6.56% | -524.97 |
| ISHARE RUS 2000 INDX (IWM) | -6.84% | -547.20 |
| ULTRA RUSSELL2000 PR (UWM) | -13.98% | -1118.31 |
| ULTRASHORT RUSSELL20 (TWM) | +13.23% | +1058.18 |
| NASDAQ-100 (index) | -4.35% | -347.95 |
| POWERSHARES QQQ TR 1 (QQQQ) | -4.84% | -387.06 |
| ULTRA QQQ PROSHARES (QLD) | -9.12% | -729.27 |
| PT UTLRSHRT QQQ PS (QID) | +9.25% | +739.91 |
| S&P MidCap 400 (index) | -7.80% | -623.50 |
| ISHARE SP MC 400 INX (IJH) | -7.92% | -633.22 |
| ULTRA MC400 PROSHRS (MVV) | -15.69% | -1254.39 |
| PT ULTRSHR MC400 PS (MZZ) | +15.18% | +1213.78 |
| GREENHAVEN CONT IDX (GCC) | -4.81% | -384.92 |
| Amex Gold (index) | -2.20% | -175.80 |
| MKT VECT GOLD MNRS (GDX) | -3.16% | -252.46 |
| STREETTRACKS GOLD TR (GLD) | +1.65% | +131.70 |
| DB GOLD DBL SH ETN (DZZ) | -3.18% | -254.61 |
| DB GOLD DBL LG ETN (DGP) | +3.05% | +244.01 |
| Semiconductor Sector (index) | -3.26% | -261.01 |
| ULTRA SEMICONDUCTORS (USD) | -2.14% | -171.42 |
| ULTRASHORT SEMICONDU (SSG) | +7.19% | +575.40 |
| ISHARE DJ FIN SC INX (IYF) | -9.45% | -755.98 |
| ISHARES LEHMAN 20 YR (TLT) | +5.17% | +413.15 |
| ISHARESLEHMAN 7-10YR (IEF) | +2.01% | +160.99 |
| ISHARES LEH AGG FD (AGG) | +0.02% | +1.64 |
| ISHARES GS $ INVESTO (LQD) | -1.09% | -87.20 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.19% | +15.12 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -3.09% | -247.38 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -10.85% | -867.90 |
| SHORT QQQ PROSHARES (PSQ) | +4.59% | +367.40 |
| SHRT DOW30 PROSHARES (DOG) | +4.51% | +360.55 |
| SHRT S& P500 PROSHRS (SH) | +6.76% | +540.46 |
| SHRT MC400 PROSHARES (MYY) | +7.96% | +636.91 |
| SHORT SMALLCAP600 PR (SBB) | +6.16% | +492.66 |
| SHORT RUSSELL2000 PR (RWM) | +6.59% | +527.21 |
| PT UTLRSHRT QQQ PS (QID) | +9.25% | +739.91 |
| PT ULTRSHRT DOW30 PS (DXD) | +10.49% | +839.01 |
| PT ULTRSHRT SP500 PS (SDS) | +13.31% | +1064.27 |
| PT ULTRSHR MC400 PS (MZZ) | +15.18% | +1213.78 |
| ULTRASHORT SMALLCAP6 (SDD) | +12.49% | +998.66 |
| ULTRASHORT RUSSELL20 (TWM) | +13.23% | +1058.18 |
| PST ULSHT RSL1K VALU (SJF) | +15.62% | +1249.23 |
| PST ULSHT RSL1K GR (SFK) | +12.18% | +974.08 |
| PST ULSHT RSL MC VAL (SJL) | +17.39% | +1390.35 |
| PST ULSHT RSL MC GR (SDK) | +14.23% | +1137.89 |
| PST ULTSHT RSL2K VAL (SJH) | +13.46% | +1076.39 |
| PST ULSHT RSL2K GR (SKK) | +13.66% | +1092.38 |
| ULTRASHORT BASIC MAT (SMN) | +21.55% | +1723.32 |
| ULTRASHORT CONSUMER (SZK) | +7.55% | +603.69 |
| ULTRASHORT CONSUMER (SCC) | +9.44% | +755.15 |
| ULTRASHORT FINANCIAL (SKF) | +17.78% | +1421.95 |
| ULTRASHORT HEALTH CA (RXD) | +14.86% | +1188.71 |
| ULTRASHORT INDUSTRIA (SIJ) | +13.15% | +1051.83 |
| ULTRASHORT OIL & GAS (DUG) | +21.35% | +1707.13 |
| ULTRASHORT REAL ESTA (SRS) | +14.99% | +1198.79 |
| ULTRASHORT SEMICONDU (SSG) | +7.19% | +575.40 |
| ULTRASHORT TECHNOLOG (REW) | +8.87% | +708.98 |
| ULTRASHORT UTILITIES (SDP) | +11.70% | +935.35 |
| PROSHARES SHR MSCI E (EUM) | +7.16% | +572.67 |
| PROSHARES SHORT MSCI (EFZ) | +5.33% | +426.04 |
| PROSHARES ULTRASHORT (EFU) | +11.25% | +899.93 |
| PROSHARES UTLRASHORT (EEV) | +13.34% | +1066.97 |
| PROSHARES US MSCI JP (EWV) | +4.48% | +358.57 |
| PROSHARES ULTRASHORT (FXP) | +7.85% | +627.87 |
| ULTRA QQQ PROSHARES (QLD) | -9.12% | -729.27 |
| ULTRA DOW30 PROSHRS (DDM) | -10.60% | -848.11 |
| ULTRA S& P500 PROSHRS (SSO) | -14.29% | -1142.98 |
| ULTRA MC400 PROSHRS (MVV) | -15.69% | -1254.39 |
| PROSH ULTRA SMALLCAP (SAA) | -13.87% | -1108.97 |
| ULTRA RUSSELL2000 PR (UWM) | -13.98% | -1118.31 |
| PST ULT RUS1000 VAL (UVG) | -15.66% | -1252.07 |
| PST ULT RSL1000 GR (UKF) | -13.02% | -1041.27 |
| PST ULT RSL MC VALU (UVU) | -15.42% | -1232.94 |
| PST ULT RSL MC GR PS (UKW) | -15.70% | -1255.61 |
| PST ULT RSL2000 VALU (UVT) | -13.99% | -1118.63 |
| PST ULT RSL2000 GR (UKK) | -14.49% | -1158.62 |
| ULTRA BASIC MATERIAL (UYM) | -20.56% | -1644.63 |
| ULTRA CONSUMER GOODS (UGE) | -11.34% | -906.59 |
| ULTRA CONSUMER SERVI (UCC) | -11.60% | -927.92 |
| ULTRA FINANCIALS PRO (UYG) | -19.22% | -1537.27 |
| ULTRA HEALTH CARE PR (RXL) | -13.22% | -1057.58 |
| ULTRA INDUSTRIALS PR (UXI) | -10.88% | -869.98 |
| ULTRA OIL & GAS PROS (DIG) | -23.23% | -1857.43 |
| ULTRA REAL ESTATE PR (URE) | -17.09% | -1366.74 |
| ULTRA SEMICONDUCTORS (USD) | -2.14% | -171.42 |
| ULTRA TECHNOLOGY PRO (ROM) | -9.19% | -734.72 |
| ULTRA UTILITIES PROS (UPW) | -9.73% | -778.36 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +2.42% | +193.83 |
| POWERSHARES DB BASE (BDD) | -10.25% | -819.35 |
| POWERSHARES DB BASE (BOS) | +2.14% | +171.17 |
| POWERSHARES DB BASE (BDG) | -2.36% | -188.91 |
| POWERSHARES DB CRUDE (DTO) | +9.63% | +769.84 |
| POWERSHARES DB CRUDE (SZO) | +5.97% | +477.18 |
| POWERSHARES DB CRUDE (DXO) | -15.91% | -1272.29 |
| POWERSHARES DB CRUDE (OLO) | -6.48% | -518.55 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -17.27% | -1380.75 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +18.02% | +1440.75 |
| Direxion Small Cap Bull 3x Shares (TNA) | -21.01% | -1679.99 |
| Direxion Small Cap Bear 3x Shares (TZA) | +20.01% | +1600.00 |
| Direxion Energy Bull 3x Shares (ERX) | -33.90% | -2711.27 |
| Direxion Energy Bear 3x Shares (ERY) | +34.45% | +2755.46 |
| Direxion Financial Bull 3x Shares (FAS) | -30.14% | -2410.24 |
| Direxion Financial Bear 3x Shares (FAZ) | +27.98% | +2237.75 |
The US is defaulting by stealth by Vineer Bhansali (managing director, portfolio manager, firm-wide head of analytics for portfolio management, and a senior member of PIMCO's portfolio management group).
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, November 19, 2008
Fed Buys 10-Year Treasurys To Lower Mortgage Rates
Stocks were the ugly stepsister Wednesday as the Fed went into the bond market and bought longer term bonds to push interest rates lower. The idea here is to reduce mortgage rates which are benchmarked to Treasury note rates and thereby bring the housing market back to health. Since interest rates and stocks have tended to move in the same direction since 2000, this attracted sellers in the stock market who moved their money into the bond market. Consequently, the stock market suffered as the selling pressure never relented after the opening pop fly rally:
Change From 18 Nov 2008 To 19 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -5.07% | -427.47 |
| DIAMONDS TRUST SER 1 (DIA) | -4.72% | -397.56 |
| ULTRA DOW30 PROSHRS (DDM) | -10.03% | -845.24 |
| PT ULTRSHRT DOW30 PS (DXD) | +9.51% | +801.48 |
| S&P 500 (index) | -5.81% | -489.72 |
| S& P DEP RECEIPTS (SPY) | -6.21% | -523.58 |
| ULTRA S& P500 PROSHRS (SSO) | -9.95% | -838.03 |
| PT ULTRSHRT SP500 PS (SDS) | +11.22% | +944.93 |
| NYSE Composite (index) | -6.59% | -555.31 |
| ISHARES NYSE CMP IDX (NYC) | -4.55% | -383.42 |
| S&P SmallCap 600 (index) | -7.56% | -636.82 |
| PROSH ULTRA SMALLCAP (SAA) | -13.84% | -1166.16 |
| SHORT SMALLCAP600 PR (SBB) | +7.48% | +630.53 |
| ULTRASHORT SMALLCAP6 (SDD) | +15.73% | +1325.24 |
| Russell 2000 (index) | -7.85% | -661.35 |
| ISHARE RUS 2000 INDX (IWM) | -8.15% | -686.63 |
| ULTRA RUSSELL2000 PR (UWM) | -16.23% | -1367.22 |
| ULTRASHORT RUSSELL20 (TWM) | +16.24% | +1368.46 |
| NASDAQ-100 (index) | -5.76% | -485.33 |
| POWERSHARES QQQ TR 1 (QQQQ) | -5.22% | -439.97 |
| ULTRA QQQ PROSHARES (QLD) | -10.35% | -871.76 |
| PT UTLRSHRT QQQ PS (QID) | +10.72% | +903.35 |
| S&P MidCap 400 (index) | -7.39% | -622.60 |
| ISHARE SP MC 400 INX (IJH) | -7.13% | -600.54 |
| ULTRA MC400 PROSHRS (MVV) | -14.47% | -1218.97 |
| PT ULTRSHR MC400 PS (MZZ) | +15.06% | +1268.52 |
| GREENHAVEN CONT IDX (GCC) | -1.06% | -89.58 |
| Amex Gold (index) | -5.28% | -444.70 |
| MKT VECT GOLD MNRS (GDX) | -4.35% | -366.48 |
| STREETTRACKS GOLD TR (GLD) | -0.34% | -29.05 |
| DB GOLD DBL SH ETN (DZZ) | +0.63% | +53.10 |
| DB GOLD DBL LG ETN (DGP) | 0.00% | 0.00 |
| Semiconductor Sector (index) | -7.71% | -649.34 |
| ULTRA SEMICONDUCTORS (USD) | -12.41% | -1045.36 |
| ULTRASHORT SEMICONDU (SSG) | +12.65% | +1065.62 |
| ISHARE DJ FIN SC INX (IYF) | -10.55% | -888.50 |
| ISHARES LEHMAN 20 YR (TLT) | +2.56% | +215.80 |
| ISHARESLEHMAN 7-10YR (IEF) | +1.08% | +90.81 |
| ISHARES LEH AGG FD (AGG) | +0.29% | +24.29 |
| ISHARES GS $ INVESTO (LQD) | +0.15% | +13.01 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.14% | +11.97 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -2.66% | -224.14 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -5.02% | -422.74 |
| SHORT QQQ PROSHARES (PSQ) | +5.36% | +451.77 |
| SHRT DOW30 PROSHARES (DOG) | +5.29% | +445.71 |
| SHRT S& P500 PROSHRS (SH) | +5.78% | +486.56 |
| SHRT MC400 PROSHARES (MYY) | +7.10% | +598.38 |
| SHORT SMALLCAP600 PR (SBB) | +7.48% | +630.53 |
| SHORT RUSSELL2000 PR (RWM) | +7.98% | +672.38 |
| PT UTLRSHRT QQQ PS (QID) | +10.72% | +903.35 |
| PT ULTRSHRT DOW30 PS (DXD) | +9.51% | +801.48 |
| PT ULTRSHRT SP500 PS (SDS) | +11.22% | +944.93 |
| PT ULTRSHR MC400 PS (MZZ) | +15.06% | +1268.52 |
| ULTRASHORT SMALLCAP6 (SDD) | +15.73% | +1325.24 |
| ULTRASHORT RUSSELL20 (TWM) | +16.24% | +1368.46 |
| PST ULSHT RSL1K VALU (SJF) | +13.39% | +1127.82 |
| PST ULSHT RSL1K GR (SFK) | +9.72% | +818.76 |
| PST ULSHT RSL MC VAL (SJL) | +13.22% | +1114.16 |
| PST ULSHT RSL MC GR (SDK) | +12.71% | +1071.05 |
| PST ULTSHT RSL2K VAL (SJH) | +16.23% | +1367.37 |
| PST ULSHT RSL2K GR (SKK) | +15.77% | +1328.79 |
| ULTRASHORT BASIC MAT (SMN) | +16.99% | +1431.32 |
| ULTRASHORT CONSUMER (SZK) | +6.89% | +580.14 |
| ULTRASHORT CONSUMER (SCC) | +10.31% | +868.96 |
| ULTRASHORT FINANCIAL (SKF) | +21.37% | +1800.68 |
| ULTRASHORT HEALTH CA (RXD) | +7.28% | +613.45 |
| ULTRASHORT INDUSTRIA (SIJ) | +12.68% | +1068.10 |
| ULTRASHORT OIL & GAS (DUG) | +11.28% | +950.11 |
| ULTRASHORT REAL ESTA (SRS) | +27.55% | +2321.18 |
| ULTRASHORT SEMICONDU (SSG) | +12.65% | +1065.62 |
| ULTRASHORT TECHNOLOG (REW) | +10.05% | +846.56 |
| ULTRASHORT UTILITIES (SDP) | +6.62% | +557.87 |
| PROSHARES SHR MSCI E (EUM) | +8.29% | +698.37 |
| PROSHARES SHORT MSCI (EFZ) | +7.01% | +590.20 |
| PROSHARES ULTRASHORT (EFU) | +12.57% | +1059.18 |
| PROSHARES UTLRASHORT (EEV) | +15.94% | +1342.66 |
| PROSHARES US MSCI JP (EWV) | +12.43% | +1047.15 |
| PROSHARES ULTRASHORT (FXP) | +15.57% | +1312.10 |
| ULTRA QQQ PROSHARES (QLD) | -10.35% | -871.76 |
| ULTRA DOW30 PROSHRS (DDM) | -10.03% | -845.24 |
| ULTRA S& P500 PROSHRS (SSO) | -9.95% | -838.03 |
| ULTRA MC400 PROSHRS (MVV) | -14.47% | -1218.97 |
| PROSH ULTRA SMALLCAP (SAA) | -13.84% | -1166.16 |
| ULTRA RUSSELL2000 PR (UWM) | -16.23% | -1367.22 |
| PST ULT RUS1000 VAL (UVG) | -10.23% | -861.62 |
| PST ULT RSL1000 GR (UKF) | -9.56% | -805.07 |
| PST ULT RSL MC VALU (UVU) | -14.30% | -1204.40 |
| PST ULT RSL MC GR PS (UKW) | -12.60% | -1061.25 |
| PST ULT RSL2000 VALU (UVT) | -16.25% | -1368.68 |
| PST ULT RSL2000 GR (UKK) | -14.35% | -1208.64 |
| ULTRA BASIC MATERIAL (UYM) | -16.07% | -1354.20 |
| ULTRA CONSUMER GOODS (UGE) | -6.51% | -548.68 |
| ULTRA CONSUMER SERVI (UCC) | -6.52% | -549.33 |
| ULTRA FINANCIALS PRO (UYG) | -21.92% | -1846.91 |
| ULTRA HEALTH CARE PR (RXL) | -8.67% | -730.40 |
| ULTRA INDUSTRIALS PR (UXI) | -13.70% | -1154.60 |
| ULTRA OIL & GAS PROS (DIG) | -11.12% | -936.68 |
| ULTRA REAL ESTATE PR (URE) | -23.09% | -1945.32 |
| ULTRA SEMICONDUCTORS (USD) | -12.41% | -1045.36 |
| ULTRA TECHNOLOGY PRO (ROM) | -9.16% | -771.31 |
| ULTRA UTILITIES PROS (UPW) | -7.62% | -641.94 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +4.22% | +355.65 |
| POWERSHARES DB BASE (BOS) | +1.64% | +138.53 |
| POWERSHARES DB CRUDE (DTO) | +2.88% | +242.31 |
| POWERSHARES DB CRUDE (SZO) | +0.65% | +55.14 |
| POWERSHARES DB CRUDE (DXO) | -5.63% | -474.32 |
| POWERSHARES DB CRUDE (OLO) | -1.17% | -98.85 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -16.11% | -1356.94 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +16.98% | +1430.33 |
| Direxion Small Cap Bull 3x Shares (TNA) | -23.52% | -1981.20 |
| Direxion Small Cap Bear 3x Shares (TZA) | +24.33% | +2050.06 |
| Direxion Energy Bull 3x Shares (ERX) | -16.14% | -1359.61 |
| Direxion Energy Bear 3x Shares (ERY) | +17.83% | +1502.37 |
| Direxion Financial Bull 3x Shares (FAS) | -29.63% | -2496.33 |
| Direxion Financial Bear 3x Shares (FAZ) | +29.94% | +2522.09 |
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
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Tuesday, November 18, 2008
This Bud's For You
More Bailouts For Big 3 Corporate Criminals
With the completion of the acquistion of Anheuser-Busch by InBev Tuesday, BUD was removed from the S&P 500 Index at the close of trading. Although the market had been in an intraday downtrend since the opening rally ran out of steam at noon, index fund managers were forced to buy shares in the other components of the index in order to maintain their funds in sync. This caused a last hour rally in the market which was more of a mechanical rally than anything that should inspire confidence that a true trend change had taken place. In other words, it was an insignificant event in the larger scheme of things. In any case, it was only a few hundred points on the Dow, which is something we see every day, several times a day in fact, these days.
The bigger issue the markets are dealing with is the aftermath of American society's broken infatuation with capitalism. Now that we're cleaning up the fallout from the failure of capitalism in this country, we have to decide how to effectively nationalize private industry. Today, the subject was how to nationalize the former "Big 3" Detroit automakers (General Motors, Chrysler and Ford). They need a "bridge loan" of $25 Billion. The "bridge" is to get them past the current Administration to the Obama Administration which will come into power in late January. At that time, they will likely be given far more money by the government in exchange for preferred shares to be held by the US Treasury. Common stock holders in the Big 3 will likely receive nothing but a tax deduction after their shares become worthless. All three companies are technically bankrupt and no amount of normal Chapter 11 reorganization is likely to save them. Only a government nationalization and consolidation is likely to rescue the domestic auto industry. Nationalization is needed in order to break the union contracts and transfer retirees' health benefits to Medicare and consolidation into one company is needed to avoid duplication of resources.
Appearing on national teevee, the corporate CEOs testified before Congress. They are making it clear that they are simply corporate criminals out to raid the Treasury just like their comrades in the financial industry. The American public should be outraged at the audacity of criminals to stand before Congress and lie time after time, receive government money and then simply pocket the funds and walk away from their agreements. It's no wonder that these industries are failing---they're simply being run by felons.
One Congressman reminded the automakers of the billion dollars they received under the Clinton Administration to develop hybrid cars in the Nineties, then promptly pocketed the cash under Bush, and pushed SUV's out the door to consumers; this let the Japanese jump on hybrid technology to take market share---and these are the people who compain loudly about unfair competition from foreign firms and their pain at meeting modest mileage standards? It sounds like the only thing that's unfair is that these criminals aren't in prison right now for stealing public money.
While it's unlikely the current Congress will provide the kind of corporate welfare the Big 3 are demanding, the next Congress is very likely to give the automakers everything they're begging for. The worst aspect of this is that it crowds out the competition, such as Tesla Motors, which is in the unfortunate position of having to cancel development of their all-electric sedan due to a lack of funding! We have the ludicrous spectacle of taxpayer money being shoveled to the failures in Detroit while letting a truly innovative car company die on the vine, failing to produce autos the country needs to cure its addiction to foreign oil. There are plenty of Europeans who are hoping Tesla Motors will produce a car for them at the very least. When was the last time the Europeans even considered importing cars from Detroit?
At the same time, innovative technology which would allow cars to be built which require no fuel tank whatsoever (and thus run forever) cannot be developed for the same reasons---a failure of intelligence at the top of the food pyramid in Washington. It's time for a real revolution and the members of Congress who are giving away taxpayer money to these criminals are simply modern-day Benedict Arnolds (although, in reading history, we have to admit that Arnold seemed to have valid gripes with the way he was treated at the time---perhaps the people running America today are throwbacks to that era in history?).
Clearly, the markets are dealing warily with this transition to socialism and not liking it for the most part. The US Dollar has been the beneficiary of the transition so far, but that has as much to do with the unwinding of foreign investments as it does confidence that the new American economy is an actual improvement over the old one. Until investors see a more detailed view of the post-capitalist economy, they are going to be very reticent to buy into it.
A twisty market ended on a high note on Tuesday:
Change From 17 Nov 2008 To 18 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +1.83% | +151.17 |
| DIAMONDS TRUST SER 1 (DIA) | +1.68% | +138.64 |
| ULTRA DOW30 PROSHRS (DDM) | +3.53% | +292.08 |
| PT ULTRSHRT DOW30 PS (DXD) | -2.99% | -247.66 |
| S&P 500 (index) | +1.39% | +114.76 |
| S& P DEP RECEIPTS (SPY) | +1.81% | +149.99 |
| ULTRA S& P500 PROSHRS (SSO) | +0.74% | +60.91 |
| PT ULTRSHRT SP500 PS (SDS) | -1.68% | -139.37 |
| NYSE Composite (index) | +0.79% | +65.74 |
| ISHARES NYSE CMP IDX (NYC) | -1.46% | -120.88 |
| S&P SmallCap 600 (index) | -0.53% | -44.14 |
| PROSH ULTRA SMALLCAP (SAA) | -2.81% | -232.76 |
| SHORT SMALLCAP600 PR (SBB) | +2.73% | +225.77 |
| ULTRASHORT SMALLCAP6 (SDD) | +0.67% | +55.51 |
| Russell 2000 (index) | -0.84% | -69.48 |
| ISHARE RUS 2000 INDX (IWM) | -0.49% | -40.23 |
| ULTRA RUSSELL2000 PR (UWM) | -1.24% | -102.72 |
| ULTRASHORT RUSSELL20 (TWM) | +1.26% | +104.43 |
| NASDAQ-100 (index) | +1.08% | +89.06 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.11% | -8.75 |
| ULTRA QQQ PROSHARES (QLD) | -0.90% | -74.48 |
| PT UTLRSHRT QQQ PS (QID) | +0.15% | +12.20 |
| S&P MidCap 400 (index) | -0.27% | -22.30 |
| ISHARE SP MC 400 INX (IJH) | -0.43% | -35.44 |
| ULTRA MC400 PROSHRS (MVV) | -1.22% | -101.03 |
| PT ULTRSHR MC400 PS (MZZ) | +0.18% | +15.28 |
| GREENHAVEN CONT IDX (GCC) | -0.28% | -22.89 |
| Amex Gold (index) | -0.73% | -60.65 |
| MKT VECT GOLD MNRS (GDX) | -1.26% | -104.52 |
| STREETTRACKS GOLD TR (GLD) | -0.19% | -15.94 |
| DB GOLD DBL SH ETN (DZZ) | +0.16% | +13.06 |
| DB GOLD DBL LG ETN (DGP) | -0.61% | -50.18 |
| Semiconductor Sector (index) | -1.96% | -161.90 |
| ULTRA SEMICONDUCTORS (USD) | -3.16% | -261.61 |
| ULTRASHORT SEMICONDU (SSG) | +3.21% | +265.21 |
| ISHARE DJ FIN SC INX (IYF) | -1.13% | -93.27 |
| ISHARES LEHMAN 20 YR (TLT) | +1.29% | +106.46 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.78% | +64.19 |
| ISHARES LEH AGG FD (AGG) | -0.14% | -11.91 |
| ISHARES GS $ INVESTO (LQD) | +0.12% | +10.05 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.11% | +8.82 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.92% | -159.01 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -2.16% | -178.99 |
| SHORT QQQ PROSHARES (PSQ) | +0.08% | +6.88 |
| SHRT DOW30 PROSHARES (DOG) | -1.81% | -150.13 |
| SHRT S& P500 PROSHRS (SH) | -0.90% | -74.16 |
| SHRT MC400 PROSHARES (MYY) | +0.41% | +34.13 |
| SHORT SMALLCAP600 PR (SBB) | +2.73% | +225.77 |
| SHORT RUSSELL2000 PR (RWM) | +0.61% | +50.50 |
| PT UTLRSHRT QQQ PS (QID) | +0.15% | +12.20 |
| PT ULTRSHRT DOW30 PS (DXD) | -2.99% | -247.66 |
| PT ULTRSHRT SP500 PS (SDS) | -1.68% | -139.37 |
| PT ULTRSHR MC400 PS (MZZ) | +0.18% | +15.28 |
| ULTRASHORT SMALLCAP6 (SDD) | +0.67% | +55.51 |
| ULTRASHORT RUSSELL20 (TWM) | +1.26% | +104.43 |
| PST ULSHT RSL1K VALU (SJF) | -1.57% | -129.88 |
| PST ULSHT RSL1K GR (SFK) | -0.26% | -21.87 |
| PST ULSHT RSL MC VAL (SJL) | +1.60% | +132.65 |
| PST ULSHT RSL MC GR (SDK) | +1.91% | +157.74 |
| PST ULTSHT RSL2K VAL (SJH) | +1.83% | +151.74 |
| PST ULSHT RSL2K GR (SKK) | +2.56% | +211.84 |
| ULTRASHORT BASIC MAT (SMN) | +3.01% | +249.44 |
| ULTRASHORT CONSUMER (SZK) | +0.40% | +33.00 |
| ULTRASHORT CONSUMER (SCC) | -0.28% | -22.81 |
| ULTRASHORT FINANCIAL (SKF) | +1.69% | +139.77 |
| ULTRASHORT HEALTH CA (RXD) | +1.96% | +162.07 |
| ULTRASHORT INDUSTRIA (SIJ) | +0.07% | +5.56 |
| ULTRASHORT OIL & GAS (DUG) | -6.71% | -555.08 |
| ULTRASHORT REAL ESTA (SRS) | +0.43% | +35.24 |
| ULTRASHORT SEMICONDU (SSG) | +3.21% | +265.21 |
| ULTRASHORT TECHNOLOG (REW) | -1.93% | -159.82 |
| ULTRASHORT UTILITIES (SDP) | +0.15% | +12.40 |
| PROSHARES SHR MSCI E (EUM) | +0.89% | +73.43 |
| PROSHARES SHORT MSCI (EFZ) | -0.35% | -29.02 |
| PROSHARES ULTRASHORT (EFU) | +0.03% | +2.10 |
| PROSHARES UTLRASHORT (EEV) | +2.12% | +175.25 |
| PROSHARES US MSCI JP (EWV) | +1.50% | +123.78 |
| PROSHARES ULTRASHORT (FXP) | +6.65% | +549.92 |
| ULTRA QQQ PROSHARES (QLD) | -0.90% | -74.48 |
| ULTRA DOW30 PROSHRS (DDM) | +3.53% | +292.08 |
| ULTRA S& P500 PROSHRS (SSO) | +0.74% | +60.91 |
| ULTRA MC400 PROSHRS (MVV) | -1.22% | -101.03 |
| PROSH ULTRA SMALLCAP (SAA) | -2.81% | -232.76 |
| ULTRA RUSSELL2000 PR (UWM) | -1.24% | -102.72 |
| PST ULT RUS1000 VAL (UVG) | -3.52% | -291.22 |
| PST ULT RSL1000 GR (UKF) | +0.34% | +28.05 |
| PST ULT RSL MC VALU (UVU) | -1.49% | -123.57 |
| PST ULT RSL MC GR PS (UKW) | -3.33% | -275.79 |
| PST ULT RSL2000 VALU (UVT) | -2.22% | -183.28 |
| PST ULT RSL2000 GR (UKK) | -3.22% | -266.58 |
| ULTRA BASIC MATERIAL (UYM) | -4.59% | -380.06 |
| ULTRA CONSUMER GOODS (UGE) | +2.36% | +195.56 |
| ULTRA CONSUMER SERVI (UCC) | -7.16% | -592.35 |
| ULTRA FINANCIALS PRO (UYG) | -1.98% | -164.10 |
| ULTRA HEALTH CARE PR (RXL) | +1.12% | +92.54 |
| ULTRA INDUSTRIALS PR (UXI) | +0.10% | +8.32 |
| ULTRA OIL & GAS PROS (DIG) | +6.59% | +545.02 |
| ULTRA REAL ESTATE PR (URE) | -2.60% | -214.71 |
| ULTRA SEMICONDUCTORS (USD) | -3.16% | -261.61 |
| ULTRA TECHNOLOGY PRO (ROM) | +1.18% | +97.39 |
| ULTRA UTILITIES PROS (UPW) | -0.58% | -47.64 |
| Other ETFs | ||
| PWRSHRS NDQ INTERNET (PNQI) | -5.83% | -482.02 |
| POWERSHARES DB BASE (BOM) | -2.84% | -235.04 |
| POWERSHARES DB BASE (BOS) | -1.37% | -113.54 |
| POWERSHARES DB CRUDE (DTO) | +1.14% | +94.33 |
| POWERSHARES DB CRUDE (SZO) | +1.31% | +108.10 |
| POWERSHARES DB CRUDE (DXO) | -3.62% | -299.30 |
| POWERSHARES DB CRUDE (OLO) | -3.65% | -302.17 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +0.91% | +74.97 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -2.28% | -188.60 |
| Direxion Small Cap Bull 3x Shares (TNA) | -1.80% | -148.75 |
| Direxion Small Cap Bear 3x Shares (TZA) | +1.73% | +142.97 |
| Direxion Energy Bull 3x Shares (ERX) | +9.57% | +791.76 |
| Direxion Energy Bear 3x Shares (ERY) | -10.52% | -869.99 |
| Direxion Financial Bull 3x Shares (FAS) | -2.52% | -208.40 |
| Direxion Financial Bear 3x Shares (FAZ) | +2.30% | +190.53 |
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, November 17, 2008
Buyers Still on Strike
Friday's late selloff continued into Monday. Despite a morning bounce, the market closed near the lows of the day, with a "par for the course" 2% decline in the blue chips.
There was no real news catalyst to move either buyers or sellers into or out of the market. Until buyers find a compelling reason to come back in, they are going to sit on their hands and wait for the sellers to take a vacation. Given that this is prime tax selling and hedge fund redemption season, that may take a while.
Change From 14 Nov 2008 To 17 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -2.63% | -223.73 |
| DIAMONDS TRUST SER 1 (DIA) | -1.51% | -128.14 |
| ULTRA DOW30 PROSHRS (DDM) | -4.88% | -414.30 |
| PT ULTRSHRT DOW30 PS (DXD) | +4.68% | +397.82 |
| S&P 500 (index) | -1.78% | -151.24 |
| S& P DEP RECEIPTS (SPY) | -1.18% | -100.18 |
| ULTRA S& P500 PROSHRS (SSO) | -3.85% | -327.46 |
| PT ULTRSHRT SP500 PS (SDS) | +4.86% | +413.22 |
| NYSE Composite (index) | -2.37% | -201.45 |
| ISHARES NYSE CMP IDX (NYC) | -2.51% | -213.48 |
| S&P SmallCap 600 (index) | -1.45% | -123.29 |
| PROSH ULTRA SMALLCAP (SAA) | -1.86% | -157.83 |
| SHORT SMALLCAP600 PR (SBB) | +0.93% | +79.44 |
| ULTRASHORT SMALLCAP6 (SDD) | +2.22% | +188.36 |
| Russell 2000 (index) | -1.13% | -95.86 |
| ISHARE RUS 2000 INDX (IWM) | -0.85% | -72.61 |
| ULTRA RUSSELL2000 PR (UWM) | -1.88% | -159.97 |
| ULTRASHORT RUSSELL20 (TWM) | +1.56% | +132.21 |
| NASDAQ-100 (index) | -0.63% | -53.26 |
| POWERSHARES QQQ TR 1 (QQQQ) | -2.10% | -178.86 |
| ULTRA QQQ PROSHARES (QLD) | -3.88% | -329.28 |
| PT UTLRSHRT QQQ PS (QID) | +3.81% | +324.07 |
| S&P MidCap 400 (index) | -1.55% | -131.68 |
| ISHARE SP MC 400 INX (IJH) | -1.23% | -104.42 |
| ULTRA MC400 PROSHRS (MVV) | -2.60% | -220.86 |
| PT ULTRSHR MC400 PS (MZZ) | +2.34% | +198.88 |
| GREENHAVEN CONT IDX (GCC) | -0.64% | -54.49 |
| Amex Gold (index) | -3.82% | -324.63 |
| MKT VECT GOLD MNRS (GDX) | -3.70% | -314.26 |
| STREETTRACKS GOLD TR (GLD) | -0.89% | -75.35 |
| DB GOLD DBL SH ETN (DZZ) | +2.18% | +184.97 |
| DB GOLD DBL LG ETN (DGP) | -1.93% | -164.26 |
| Semiconductor Sector (index) | -2.82% | -239.24 |
| ULTRA SEMICONDUCTORS (USD) | -5.53% | -469.61 |
| ULTRASHORT SEMICONDU (SSG) | +4.71% | +400.39 |
| ISHARE DJ FIN SC INX (IYF) | -4.70% | -399.38 |
| ISHARES LEHMAN 20 YR (TLT) | +0.44% | +37.50 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.42% | +35.94 |
| ISHARES LEH AGG FD (AGG) | +0.27% | +22.78 |
| ISHARES GS $ INVESTO (LQD) | +0.72% | +61.44 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.18% | +15.13 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.01% | -85.43 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -1.00% | -85.39 |
| SHORT QQQ PROSHARES (PSQ) | +1.95% | +165.61 |
| SHRT DOW30 PROSHARES (DOG) | +2.58% | +219.15 |
| SHRT S& P500 PROSHRS (SH) | +2.62% | +222.23 |
| SHRT MC400 PROSHARES (MYY) | +1.20% | +101.75 |
| SHORT SMALLCAP600 PR (SBB) | +0.93% | +79.44 |
| SHORT RUSSELL2000 PR (RWM) | +0.82% | +69.44 |
| PT UTLRSHRT QQQ PS (QID) | +3.81% | +324.07 |
| PT ULTRSHRT DOW30 PS (DXD) | +4.68% | +397.82 |
| PT ULTRSHRT SP500 PS (SDS) | +4.86% | +413.22 |
| PT ULTRSHR MC400 PS (MZZ) | +2.34% | +198.88 |
| ULTRASHORT SMALLCAP6 (SDD) | +2.22% | +188.36 |
| ULTRASHORT RUSSELL20 (TWM) | +1.56% | +132.21 |
| PST ULSHT RSL1K VALU (SJF) | +7.49% | +636.07 |
| PST ULSHT RSL1K GR (SFK) | +7.75% | +658.57 |
| PST ULSHT RSL MC VAL (SJL) | +2.30% | +195.31 |
| PST ULSHT RSL MC GR (SDK) | +5.73% | +486.62 |
| PST ULTSHT RSL2K VAL (SJH) | +3.43% | +291.78 |
| PST ULSHT RSL2K GR (SKK) | +1.88% | +159.82 |
| ULTRASHORT BASIC MAT (SMN) | +6.52% | +553.78 |
| ULTRASHORT CONSUMER (SZK) | +1.63% | +138.60 |
| ULTRASHORT CONSUMER (SCC) | +5.26% | +447.14 |
| ULTRASHORT FINANCIAL (SKF) | +9.42% | +800.85 |
| ULTRASHORT HEALTH CA (RXD) | +2.88% | +244.88 |
| ULTRASHORT INDUSTRIA (SIJ) | +3.75% | +318.62 |
| ULTRASHORT OIL & GAS (DUG) | +3.91% | +332.08 |
| ULTRASHORT REAL ESTA (SRS) | +8.22% | +698.23 |
| ULTRASHORT SEMICONDU (SSG) | +4.71% | +400.39 |
| ULTRASHORT TECHNOLOG (REW) | +4.64% | +394.51 |
| ULTRASHORT UTILITIES (SDP) | +0.95% | +80.35 |
| PROSHARES SHR MSCI E (EUM) | +2.15% | +182.67 |
| PROSHARES SHORT MSCI (EFZ) | +2.09% | +177.37 |
| PROSHARES ULTRASHORT (EFU) | +3.51% | +298.04 |
| PROSHARES UTLRASHORT (EEV) | +5.57% | +473.61 |
| PROSHARES US MSCI JP (EWV) | -0.20% | -17.23 |
| PROSHARES ULTRASHORT (FXP) | +0.40% | +34.15 |
| ULTRA QQQ PROSHARES (QLD) | -3.88% | -329.28 |
| ULTRA DOW30 PROSHRS (DDM) | -4.88% | -414.30 |
| ULTRA S& P500 PROSHRS (SSO) | -3.85% | -327.46 |
| ULTRA MC400 PROSHRS (MVV) | -2.60% | -220.86 |
| PROSH ULTRA SMALLCAP (SAA) | -1.86% | -157.83 |
| ULTRA RUSSELL2000 PR (UWM) | -1.88% | -159.97 |
| PST ULT RUS1000 VAL (UVG) | -3.78% | -320.83 |
| PST ULT RSL1000 GR (UKF) | -4.62% | -392.49 |
| PST ULT RSL MC VALU (UVU) | -7.44% | -632.12 |
| PST ULT RSL MC GR PS (UKW) | -3.73% | -317.19 |
| PST ULT RSL2000 VALU (UVT) | -0.57% | -48.13 |
| PST ULT RSL2000 GR (UKK) | -2.46% | -208.79 |
| ULTRA BASIC MATERIAL (UYM) | -6.91% | -586.99 |
| ULTRA CONSUMER GOODS (UGE) | -4.35% | -369.45 |
| ULTRA CONSUMER SERVI (UCC) | -2.28% | -193.34 |
| ULTRA FINANCIALS PRO (UYG) | -9.70% | -824.37 |
| ULTRA HEALTH CARE PR (RXL) | -5.00% | -424.62 |
| ULTRA INDUSTRIALS PR (UXI) | -7.83% | -665.14 |
| ULTRA OIL & GAS PROS (DIG) | -3.19% | -270.95 |
| ULTRA REAL ESTATE PR (URE) | -9.83% | -835.15 |
| ULTRA SEMICONDUCTORS (USD) | -5.53% | -469.61 |
| ULTRA TECHNOLOGY PRO (ROM) | -5.19% | -441.15 |
| ULTRA UTILITIES PROS (UPW) | -0.36% | -30.79 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +5.89% | +500.64 |
| POWERSHARES DB BASE (BDD) | -6.76% | -574.47 |
| POWERSHARES DB BASE (BOS) | +2.48% | +210.75 |
| POWERSHARES DB CRUDE (DTO) | +3.78% | +321.36 |
| POWERSHARES DB CRUDE (SZO) | +2.44% | +207.09 |
| POWERSHARES DB CRUDE (DXO) | -6.52% | -554.17 |
| POWERSHARES DB CRUDE (OLO) | -0.95% | -80.51 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -7.06% | -600.19 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +7.46% | +633.57 |
| Direxion Small Cap Bull 3x Shares (TNA) | -2.03% | -172.89 |
| Direxion Small Cap Bear 3x Shares (TZA) | +2.79% | +236.77 |
| Direxion Energy Bull 3x Shares (ERX) | -4.56% | -387.15 |
| Direxion Energy Bear 3x Shares (ERY) | +4.44% | +377.56 |
| Direxion Financial Bull 3x Shares (FAS) | -13.89% | -1180.05 |
| Direxion Financial Bear 3x Shares (FAZ) | +14.91% | +1266.82 |
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, November 16, 2008
G20 Vows This Crisis Will Be The Last
Of course, that's exactly what politicians and their fellow travelers have said after every bank panic in history (which is what this one is no matter whether it's called a financial crisis, recession or Depression). This one will be no different. Reforms will be made and implemented. And, given enough time, another set of incompetents will preside over another financial meltdown in the future---as long as banks are left to determine our economic future. Only the elimination of private banks will prevent an endless series of financial crises in the future.
According to a Reuters report:
The administration of President George W. Bush says there should be no return to greater state control of financial markets. Much of Europe says that without more regulation, a repeat of the last year's turmoil is inevitable.
That pretty well sums up the public face of the most disasterous Administration in American history. Bush is either the most incompetent man to ever occupy the White House, or he's just executed the cleverest and most intricate plot to loot the treasury and get away with it.
History tells us, though, that the financial panic we're enduring now is nothing new. In fact, historians find that bank crises occur about every 20 years---and they occur again and again for basically the same reasons. And, every time, leaders proclaim that they will take action to prevent such disasters from occuring again. Of course, they always dismantle the mechanisms put in place by the previous generation and bring on financial disaster once again. This is the fate of the human race: to repeat the errors of their forebears endlessly in a cycle from which they can never escape.
Although the cycle is about twenty years in length, it appears that some occurences are more severe than others. As time goes on, the wisdom of the forebears in formulating laws designed to prevent such crises from occuring again are demolished by the greedy. The severity of the downturns grows substantially from cycle to cycle until a downturn is substantial enough to generate radical reforms. The 1873 Long Depression (the original Great Depression) was followed about three cycles later---1929---by the next Great Depression and a 90% decline in the value of both real estate and the stock market (given the deflation of that Depression, values actually plunged about 70% in real terms). Skipping ahead to the 1970s, we find a severe downturn occured in 1974, which was accompanied by a 50% decline in the stock market (but, considering that inflation was high during the period, the actual loss of stock value was around 70% again). Now, approximately two cycles later, we find the stock market plunging toward another deep low. If it's similar to previous financial crises, we should expect about a 70% decline in stock market values. So far, we're on track: the S&P 500 Index has been down as much as 48% so far this year from last year's peak value.
As far as time is concerned, the average length of time the stock market takes to move from its all-time high to its low tends to be about four years, so this would target 2011-2012 for a low in this downturn. Note that while the real estate bubble bursting caused this generational bear market, real estate prices do not recover nearly as quickly as the stock market does. And, while we may not see the low in stocks for years, we are usually treated to substantial bear market rallies which look like bull markets (and return similar percentage gains) to traders. Investors tend to lose money in times like these because they not only see bear market rallies followed by bear market declines which take back all of their gains, but they lose the opportunity cost of their investment and, often lose value due to the ravages of inflation.
Friday's market continued the volatility on both the upside and the downside as traders found our intraday indicators very profitable in a very difficult market:
Change From 13 Nov 2008 To 14 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -3.82% | -337.94 |
| DIAMONDS TRUST SER 1 (DIA) | -5.05% | -446.24 |
| ULTRA DOW30 PROSHRS (DDM) | -7.88% | -696.41 |
| PT ULTRSHRT DOW30 PS (DXD) | +8.51% | +751.61 |
| S&P 500 (index) | -4.81% | -424.65 |
| S& P DEP RECEIPTS (SPY) | -4.92% | -434.97 |
| ULTRA S& P500 PROSHRS (SSO) | -9.50% | -839.51 |
| PT ULTRSHRT SP500 PS (SDS) | +8.49% | +750.30 |
| NYSE Composite (index) | -4.60% | -406.78 |
| ISHARES NYSE CMP IDX (NYC) | -3.70% | -326.55 |
| S&P SmallCap 600 (index) | -6.46% | -570.60 |
| PROSH ULTRA SMALLCAP (SAA) | -13.54% | -1196.44 |
| SHORT SMALLCAP600 PR (SBB) | +4.79% | +423.47 |
| ULTRASHORT SMALLCAP6 (SDD) | +14.99% | +1324.56 |
| Russell 2000 (index) | -7.07% | -624.29 |
| ISHARE RUS 2000 INDX (IWM) | -7.44% | -657.58 |
| ULTRA RUSSELL2000 PR (UWM) | -15.33% | -1354.49 |
| ULTRASHORT RUSSELL20 (TWM) | +15.91% | +1406.08 |
| NASDAQ-100 (index) | -6.02% | -531.71 |
| POWERSHARES QQQ TR 1 (QQQQ) | -4.86% | -429.29 |
| ULTRA QQQ PROSHARES (QLD) | -9.84% | -869.14 |
| PT UTLRSHRT QQQ PS (QID) | +9.99% | +882.53 |
| S&P MidCap 400 (index) | -5.33% | -470.59 |
| ISHARE SP MC 400 INX (IJH) | -5.68% | -501.95 |
| ULTRA MC400 PROSHRS (MVV) | -10.77% | -951.60 |
| PT ULTRSHR MC400 PS (MZZ) | +11.50% | +1016.28 |
| GREENHAVEN CONT IDX (GCC) | +0.65% | +57.03 |
| Amex Gold (index) | -5.55% | -490.31 |
| MKT VECT GOLD MNRS (GDX) | -4.55% | -402.16 |
| STREETTRACKS GOLD TR (GLD) | +1.59% | +140.83 |
| DB GOLD DBL SH ETN (DZZ) | -3.38% | -298.26 |
| DB GOLD DBL LG ETN (DGP) | +3.46% | +305.84 |
| Semiconductor Sector (index) | -6.40% | -565.06 |
| ULTRA SEMICONDUCTORS (USD) | -13.78% | -1217.48 |
| ULTRASHORT SEMICONDU (SSG) | +15.85% | +1400.45 |
| ISHARE DJ FIN SC INX (IYF) | -5.52% | -487.63 |
| ISHARES LEHMAN 20 YR (TLT) | +1.98% | +175.15 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.99% | +87.40 |
| ISHARES LEH AGG FD (AGG) | +0.30% | +26.50 |
| ISHARES GS $ INVESTO (LQD) | -0.02% | -1.96 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.02% | -2.10 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.78% | -157.05 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -3.96% | -349.50 |
| SHORT QQQ PROSHARES (PSQ) | +4.99% | +441.31 |
| SHRT DOW30 PROSHARES (DOG) | +3.93% | +347.42 |
| SHRT S& P500 PROSHRS (SH) | +4.57% | +403.37 |
| SHRT MC400 PROSHARES (MYY) | +5.51% | +486.41 |
| SHORT SMALLCAP600 PR (SBB) | +4.79% | +423.47 |
| SHORT RUSSELL2000 PR (RWM) | +7.91% | +698.46 |
| PT UTLRSHRT QQQ PS (QID) | +9.99% | +882.53 |
| PT ULTRSHRT DOW30 PS (DXD) | +8.51% | +751.61 |
| PT ULTRSHRT SP500 PS (SDS) | +8.49% | +750.30 |
| PT ULTRSHR MC400 PS (MZZ) | +11.50% | +1016.28 |
| ULTRASHORT SMALLCAP6 (SDD) | +14.99% | +1324.56 |
| ULTRASHORT RUSSELL20 (TWM) | +15.91% | +1406.08 |
| PST ULSHT RSL1K VALU (SJF) | +6.93% | +612.66 |
| PST ULSHT RSL1K GR (SFK) | +3.94% | +348.46 |
| PST ULSHT RSL MC VAL (SJL) | +6.87% | +607.17 |
| PST ULSHT RSL MC GR (SDK) | +8.71% | +769.72 |
| PST ULTSHT RSL2K VAL (SJH) | +13.64% | +1204.81 |
| PST ULSHT RSL2K GR (SKK) | +14.73% | +1301.73 |
| ULTRASHORT BASIC MAT (SMN) | +10.11% | +893.63 |
| ULTRASHORT CONSUMER (SZK) | +7.83% | +691.45 |
| ULTRASHORT CONSUMER (SCC) | +8.19% | +723.76 |
| ULTRASHORT FINANCIAL (SKF) | +11.03% | +974.49 |
| ULTRASHORT HEALTH CA (RXD) | +5.96% | +526.38 |
| ULTRASHORT INDUSTRIA (SIJ) | +10.08% | +890.61 |
| ULTRASHORT OIL & GAS (DUG) | +7.80% | +689.11 |
| ULTRASHORT REAL ESTA (SRS) | +20.79% | +1837.23 |
| ULTRASHORT SEMICONDU (SSG) | +15.85% | +1400.45 |
| ULTRASHORT TECHNOLOG (REW) | +10.19% | +900.13 |
| ULTRASHORT UTILITIES (SDP) | +3.79% | +335.28 |
| PROSHARES SHR MSCI E (EUM) | +10.08% | +890.89 |
| PROSHARES SHORT MSCI (EFZ) | +5.74% | +507.53 |
| PROSHARES ULTRASHORT (EFU) | +11.68% | +1031.76 |
| PROSHARES UTLRASHORT (EEV) | +17.79% | +1571.75 |
| PROSHARES US MSCI JP (EWV) | +9.77% | +863.50 |
| PROSHARES ULTRASHORT (FXP) | +15.36% | +1357.47 |
| ULTRA QQQ PROSHARES (QLD) | -9.84% | -869.14 |
| ULTRA DOW30 PROSHRS (DDM) | -7.88% | -696.41 |
| ULTRA S& P500 PROSHRS (SSO) | -9.50% | -839.51 |
| ULTRA MC400 PROSHRS (MVV) | -10.77% | -951.60 |
| PROSH ULTRA SMALLCAP (SAA) | -13.54% | -1196.44 |
| ULTRA RUSSELL2000 PR (UWM) | -15.33% | -1354.49 |
| PST ULT RUS1000 VAL (UVG) | -8.02% | -708.44 |
| PST ULT RSL1000 GR (UKF) | -4.79% | -423.50 |
| PST ULT RSL MC VALU (UVU) | -3.98% | -351.85 |
| PST ULT RSL MC GR PS (UKW) | -10.02% | -885.09 |
| PST ULT RSL2000 VALU (UVT) | -13.88% | -1225.92 |
| PST ULT RSL2000 GR (UKK) | -14.17% | -1252.27 |
| ULTRA BASIC MATERIAL (UYM) | -9.90% | -874.62 |
| ULTRA CONSUMER GOODS (UGE) | -6.88% | -608.09 |
| ULTRA CONSUMER SERVI (UCC) | -7.57% | -668.92 |
| ULTRA FINANCIALS PRO (UYG) | -10.67% | -942.43 |
| ULTRA HEALTH CARE PR (RXL) | -6.17% | -545.21 |
| ULTRA INDUSTRIALS PR (UXI) | -4.30% | -379.88 |
| ULTRA OIL & GAS PROS (DIG) | -7.31% | -646.09 |
| ULTRA REAL ESTATE PR (URE) | -18.03% | -1593.06 |
| ULTRA SEMICONDUCTORS (USD) | -13.78% | -1217.48 |
| ULTRA TECHNOLOGY PRO (ROM) | -9.68% | -855.65 |
| ULTRA UTILITIES PROS (UPW) | -5.15% | -455.43 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | -1.28% | -113.33 |
| POWERSHARES DB BASE (BDD) | +1.00% | +87.98 |
| POWERSHARES DB BASE (BOS) | -0.71% | -62.80 |
| POWERSHARES DB BASE (BDG) | +2.31% | +204.03 |
| POWERSHARES DB CRUDE (DTO) | +6.60% | +583.25 |
| POWERSHARES DB CRUDE (SZO) | +3.88% | +342.85 |
| POWERSHARES DB CRUDE (DXO) | -9.01% | -796.14 |
| POWERSHARES DB CRUDE (OLO) | -3.17% | -280.02 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -12.81% | -1132.13 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +12.99% | +1147.50 |
| Direxion Small Cap Bull 3x Shares (TNA) | -22.70% | -2005.56 |
| Direxion Small Cap Bear 3x Shares (TZA) | +24.08% | +2127.28 |
| Direxion Energy Bull 3x Shares (ERX) | -12.67% | -1119.05 |
| Direxion Energy Bear 3x Shares (ERY) | +13.73% | +1213.08 |
| Direxion Financial Bull 3x Shares (FAS) | -18.07% | -1596.58 |
| Direxion Financial Bear 3x Shares (FAZ) | +18.04% | +1594.31 |
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Thursday, November 13, 2008
Obama Capital Gains Tax Plan To Invigorate Entrepreneurship
President-elect Obama has unveiled some welcome changes in the tax code. Under the old tax rules, Wall Street paper-pushers were able to use legal mumbo-jumbo to generate "securities" which were called "securitized mortgage paper"---now we call it the toxic waste which ate the taxpayer's savings. But, help is on the way from the new Administration.
First, the bad news for all the gamblers who make money buying and selling paper securities: your capital gains taxes will go up by one-third, from 15% to 20%. This provision will only go into effect for those who make more than a quarter of a million dollars per year.
While higher taxes are the downside of the new policy, we concede that paper-pushers have gotten off easy under the current Administration and need to help refill the Treasury to provide a reserve we can use to bailout the next group that comes begging for money to keep their mismanaged corporations afloat. This policy of bailing out old, obsolete industries keeps newer and vibrant competition from killing off the old dinosaurs and creating new jobs. It also helps corporate CEO's collect gargantuan salaries for making decisions like how much bribe money to pay their Congressmen. Now that the cost of bailing out the corporate sector is inflating, investors are going to find the tolls more expensive on this old highway. But, that's as it should be. If you don't like the system, change it. You've had your chances and if you don't like the way things are done in Washington, why aren't you doing something about it?
The upside of the new tax policy is that Obama will completely eliminate the capital gains tax for entrepreneurs. Now, this is a change that's overdue. Entrepreneurs put their blood, sweat and tears into building a business and taxing away their capital gains is as unfair as building any bridge to nowhere. With this provision in place, America will see a revitalization of its economic strength in coming years as people with good ideas will be motivated to put them to work without having to fear the government will swoop down and take those gains away in the future. Maybe this change in the tax code will be enough to convince thousands of college graduates every year to make something of their careers instead of working in a cubicle for "The Pointy-Haired Man."
The stock market decided it liked what it was hearing Thursday. After selling off initially, it woke up and rallied almost a thousand points intraday. This may be a preview of what's coming under the new Administration:
Change From 12 Nov 2008 To 13 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +6.67% | +552.59 |
| DIAMONDS TRUST SER 1 (DIA) | +6.75% | +559.22 |
| ULTRA DOW30 PROSHRS (DDM) | +12.48% | +1033.60 |
| PT ULTRSHRT DOW30 PS (DXD) | -13.40% | -1109.56 |
| S&P 500 (index) | +6.90% | +571.61 |
| S& P DEP RECEIPTS (SPY) | +6.12% | +507.10 |
| ULTRA S& P500 PROSHRS (SSO) | +13.12% | +1087.02 |
| PT ULTRSHRT SP500 PS (SDS) | -13.48% | -1116.83 |
| NYSE Composite (index) | +7.43% | +615.03 |
| ISHARES NYSE CMP IDX (NYC) | +7.19% | +595.36 |
| S&P SmallCap 600 (index) | +7.86% | +651.22 |
| PROSH ULTRA SMALLCAP (SAA) | +15.95% | +1321.39 |
| SHORT SMALLCAP600 PR (SBB) | -7.19% | -595.20 |
| ULTRASHORT SMALLCAP6 (SDD) | -15.79% | -1307.86 |
| Russell 2000 (index) | +8.49% | +702.97 |
| ISHARE RUS 2000 INDX (IWM) | +8.23% | +681.74 |
| ULTRA RUSSELL2000 PR (UWM) | +17.13% | +1419.11 |
| ULTRASHORT RUSSELL20 (TWM) | -17.32% | -1434.73 |
| NASDAQ-100 (index) | +6.61% | +547.69 |
| POWERSHARES QQQ TR 1 (QQQQ) | +6.10% | +504.86 |
| ULTRA QQQ PROSHARES (QLD) | +11.71% | +969.82 |
| PT UTLRSHRT QQQ PS (QID) | -12.43% | -1029.74 |
| S&P MidCap 400 (index) | +8.19% | +678.70 |
| ISHARE SP MC 400 INX (IJH) | +7.89% | +653.72 |
| ULTRA MC400 PROSHRS (MVV) | +15.11% | +1251.77 |
| PT ULTRSHR MC400 PS (MZZ) | -16.16% | -1338.27 |
| GREENHAVEN CONT IDX (GCC) | +0.56% | +46.08 |
| Amex Gold (index) | +12.19% | +1009.80 |
| MKT VECT GOLD MNRS (GDX) | +8.19% | +678.43 |
| STREETTRACKS GOLD TR (GLD) | +3.07% | +254.40 |
| DB GOLD DBL SH ETN (DZZ) | -6.19% | -512.50 |
| DB GOLD DBL LG ETN (DGP) | +6.12% | +507.10 |
| Semiconductor Sector (index) | +7.15% | +592.36 |
| ULTRA SEMICONDUCTORS (USD) | +13.52% | +1120.10 |
| ULTRASHORT SEMICONDU (SSG) | -14.28% | -1182.71 |
| ISHARE DJ FIN SC INX (IYF) | +7.26% | +601.15 |
| ISHARES LEHMAN 20 YR (TLT) | -2.40% | -198.38 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.73% | -60.08 |
| ISHARES LEH AGG FD (AGG) | +0.34% | +28.37 |
| ISHARES GS $ INVESTO (LQD) | -0.68% | -56.72 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.25% | -20.59 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +1.94% | +160.34 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +4.64% | +383.96 |
| SHORT QQQ PROSHARES (PSQ) | -6.29% | -520.87 |
| SHRT DOW30 PROSHARES (DOG) | -6.92% | -573.17 |
| SHRT S& P500 PROSHRS (SH) | -7.29% | -604.14 |
| SHRT MC400 PROSHARES (MYY) | -7.96% | -659.15 |
| SHORT SMALLCAP600 PR (SBB) | -7.19% | -595.20 |
| SHORT RUSSELL2000 PR (RWM) | -8.63% | -714.50 |
| PT UTLRSHRT QQQ PS (QID) | -12.43% | -1029.74 |
| PT ULTRSHRT DOW30 PS (DXD) | -13.40% | -1109.56 |
| PT ULTRSHRT SP500 PS (SDS) | -13.48% | -1116.83 |
| PT ULTRSHR MC400 PS (MZZ) | -16.16% | -1338.27 |
| ULTRASHORT SMALLCAP6 (SDD) | -15.79% | -1307.86 |
| ULTRASHORT RUSSELL20 (TWM) | -17.32% | -1434.73 |
| PST ULSHT RSL1K VALU (SJF) | -14.47% | -1198.09 |
| PST ULSHT RSL1K GR (SFK) | -11.23% | -930.49 |
| PST ULSHT RSL MC VAL (SJL) | -11.65% | -964.93 |
| PST ULSHT RSL MC GR (SDK) | -13.99% | -1158.68 |
| PST ULTSHT RSL2K VAL (SJH) | -18.23% | -1509.85 |
| PST ULSHT RSL2K GR (SKK) | -15.71% | -1301.07 |
| ULTRASHORT BASIC MAT (SMN) | -19.27% | -1596.03 |
| ULTRASHORT CONSUMER (SZK) | -10.38% | -859.78 |
| ULTRASHORT CONSUMER (SCC) | -11.49% | -951.38 |
| ULTRASHORT FINANCIAL (SKF) | -14.56% | -1206.23 |
| ULTRASHORT HEALTH CA (RXD) | -10.51% | -870.53 |
| ULTRASHORT INDUSTRIA (SIJ) | -12.66% | -1048.21 |
| ULTRASHORT OIL & GAS (DUG) | -22.38% | -1853.81 |
| ULTRASHORT REAL ESTA (SRS) | -21.93% | -1816.11 |
| ULTRASHORT SEMICONDU (SSG) | -14.28% | -1182.71 |
| ULTRASHORT TECHNOLOG (REW) | -10.89% | -902.17 |
| ULTRASHORT UTILITIES (SDP) | -13.24% | -1096.46 |
| PROSHARES SHR MSCI E (EUM) | -14.81% | -1226.28 |
| PROSHARES SHORT MSCI (EFZ) | -8.38% | -693.84 |
| PROSHARES ULTRASHORT (EFU) | -16.53% | -1369.27 |
| PROSHARES UTLRASHORT (EEV) | -28.85% | -2389.87 |
| PROSHARES US MSCI JP (EWV) | -11.81% | -977.78 |
| PROSHARES ULTRASHORT (FXP) | -26.86% | -2224.62 |
| ULTRA QQQ PROSHARES (QLD) | +11.71% | +969.82 |
| ULTRA DOW30 PROSHRS (DDM) | +12.48% | +1033.60 |
| ULTRA S& P500 PROSHRS (SSO) | +13.12% | +1087.02 |
| ULTRA MC400 PROSHRS (MVV) | +15.11% | +1251.77 |
| PROSH ULTRA SMALLCAP (SAA) | +15.95% | +1321.39 |
| ULTRA RUSSELL2000 PR (UWM) | +17.13% | +1419.11 |
| PST ULT RUS1000 VAL (UVG) | +14.77% | +1223.46 |
| PST ULT RSL1000 GR (UKF) | +8.34% | +690.55 |
| PST ULT RSL MC VALU (UVU) | +11.33% | +938.43 |
| PST ULT RSL MC GR PS (UKW) | +14.51% | +1201.60 |
| PST ULT RSL2000 VALU (UVT) | +17.14% | +1419.89 |
| PST ULT RSL2000 GR (UKK) | +15.79% | +1307.54 |
| ULTRA BASIC MATERIAL (UYM) | +19.56% | +1620.14 |
| ULTRA CONSUMER GOODS (UGE) | +9.75% | +807.17 |
| ULTRA CONSUMER SERVI (UCC) | +10.26% | +849.87 |
| ULTRA FINANCIALS PRO (UYG) | +15.03% | +1244.94 |
| ULTRA HEALTH CARE PR (RXL) | +11.17% | +925.53 |
| ULTRA INDUSTRIALS PR (UXI) | +9.41% | +779.26 |
| ULTRA OIL & GAS PROS (DIG) | +21.92% | +1815.29 |
| ULTRA REAL ESTATE PR (URE) | +17.95% | +1486.63 |
| ULTRA SEMICONDUCTORS (USD) | +13.52% | +1120.10 |
| ULTRA TECHNOLOGY PRO (ROM) | +10.56% | +874.82 |
| ULTRA UTILITIES PROS (UPW) | +13.23% | +1095.76 |
| Other ETFs | ||
| PWRSHRS NDQ INTERNET (PNQI) | -1.89% | -156.77 |
| POWERSHARES DB BASE (BOM) | -5.54% | -459.15 |
| POWERSHARES DB BASE (BDD) | +15.25% | +1262.77 |
| POWERSHARES DB BASE (BOS) | -1.82% | -150.71 |
| POWERSHARES DB CRUDE (DTO) | -7.58% | -628.03 |
| POWERSHARES DB CRUDE (SZO) | -4.95% | -410.05 |
| POWERSHARES DB CRUDE (DXO) | +13.75% | +1138.87 |
| POWERSHARES DB CRUDE (OLO) | +3.54% | +293.25 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +14.45% | +1196.71 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -20.35% | -1685.92 |
| Direxion Small Cap Bull 3x Shares (TNA) | +25.29% | +2095.03 |
| Direxion Small Cap Bear 3x Shares (TZA) | -26.53% | -2197.03 |
| Direxion Energy Bull 3x Shares (ERX) | +29.74% | +2463.12 |
| Direxion Energy Bear 3x Shares (ERY) | -35.20% | -2915.10 |
| Direxion Financial Bull 3x Shares (FAS) | +21.37% | +1770.22 |
| Direxion Financial Bear 3x Shares (FAZ) | -23.21% | -1922.78 |
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, November 12, 2008
Thieves Acquiring Republican Plunder
TARP == Thieves Acquiring Republican Plunder?
A name that truly fits the crime. The head crook, Treasury Secretary Paulson, is going to invest in small cap companies with TARP money. For example, General Motors.
If you loved Liar's Poker by Michael Lewis, you'll also love, The End of Wall Street's Boom. This is a follow-up by the same author, explaining how the day of reckoning finally came to Wall Street.
One account is particularly illustrative of the state of idiocracy on Wall Street. An analyst asked Standard & Poors what would happen to securitized mortgage bonds if home prices fell and default rates on mortgages went up. The S&P man said he couldn't say; his model for home prices didn't have the ability to accept a negative growth number. In other words, the model used by the biggest credit rating agency in the world to determine credit ratings on bonds assumed home prices would always go up.
This is real life, folks. The people at the top are out of their minds. And these people are still in charge, both in Washington and Wall Street, not locked up where they can't do any more harm to society.
Finally, the quote of the day from Joe Kernen on CNBC's Squawk Box concerning the lack of transparency from the Fed in spending our bailout money, "It's impossible to be transparent when you don't know what you're doing."
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -4.73% | -411.30 |
| DIAMONDS TRUST SER 1 (DIA) | -4.22% | -366.80 |
| ULTRA DOW30 PROSHRS (DDM) | -8.20% | -712.93 |
| PT ULTRSHRT DOW30 PS (DXD) | +8.83% | +767.54 |
| S&P 500 (index) | -5.10% | -443.52 |
| S& P DEP RECEIPTS (SPY) | -4.41% | -383.77 |
| ULTRA S& P500 PROSHRS (SSO) | -9.64% | -838.09 |
| PT ULTRSHRT SP500 PS (SDS) | +9.78% | +850.39 |
| NYSE Composite (index) | -5.57% | -484.00 |
| ISHARES NYSE CMP IDX (NYC) | -5.59% | -486.07 |
| S&P SmallCap 600 (index) | -5.74% | -498.76 |
| PROSH ULTRA SMALLCAP (SAA) | -11.96% | -1040.04 |
| SHORT SMALLCAP600 PR (SBB) | +5.85% | +508.34 |
| ULTRASHORT SMALLCAP6 (SDD) | +11.20% | +973.38 |
| Russell 2000 (index) | -6.09% | -529.44 |
| ISHARE RUS 2000 INDX (IWM) | -5.83% | -506.76 |
| ULTRA RUSSELL2000 PR (UWM) | -12.20% | -1060.55 |
| ULTRASHORT RUSSELL20 (TWM) | +11.95% | +1039.27 |
| NASDAQ-100 (index) | -4.93% | -428.88 |
| POWERSHARES QQQ TR 1 (QQQQ) | -4.62% | -401.48 |
| ULTRA QQQ PROSHARES (QLD) | -10.12% | -879.46 |
| PT UTLRSHRT QQQ PS (QID) | +9.56% | +830.78 |
| S&P MidCap 400 (index) | -5.46% | -474.51 |
| ISHARE SP MC 400 INX (IJH) | -5.00% | -435.12 |
| ULTRA MC400 PROSHRS (MVV) | -10.34% | -899.37 |
| PT ULTRSHR MC400 PS (MZZ) | +10.35% | +900.24 |
| GREENHAVEN CONT IDX (GCC) | -2.04% | -177.67 |
| Amex Gold (index) | -10.46% | -909.81 |
| MKT VECT GOLD MNRS (GDX) | -8.04% | -699.05 |
| STREETTRACKS GOLD TR (GLD) | -2.85% | -247.36 |
| DB GOLD DBL SH ETN (DZZ) | +5.91% | +513.65 |
| DB GOLD DBL LG ETN (DGP) | -5.77% | -501.57 |
| Semiconductor Sector (index) | -5.03% | -437.51 |
| ULTRA SEMICONDUCTORS (USD) | -8.92% | -775.63 |
| ULTRASHORT SEMICONDU (SSG) | +8.39% | +729.33 |
| ISHARE DJ FIN SC INX (IYF) | -6.17% | -536.55 |
| ISHARES LEHMAN 20 YR (TLT) | +0.64% | +55.82 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.62% | +53.69 |
| ISHARES LEH AGG FD (AGG) | -0.86% | -75.13 |
| ISHARES GS $ INVESTO (LQD) | -0.02% | -1.92 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.15% | +13.40 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.73% | -150.83 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -0.53% | -45.82 |
| SHORT QQQ PROSHARES (PSQ) | +4.73% | +411.00 |
| SHRT DOW30 PROSHARES (DOG) | +4.40% | +382.41 |
| SHRT S& P500 PROSHRS (SH) | +5.07% | +440.59 |
| SHRT MC400 PROSHARES (MYY) | +5.10% | +443.52 |
| SHORT SMALLCAP600 PR (SBB) | +5.85% | +508.34 |
| SHORT RUSSELL2000 PR (RWM) | +5.95% | +516.90 |
| PT UTLRSHRT QQQ PS (QID) | +9.56% | +830.78 |
| PT ULTRSHRT DOW30 PS (DXD) | +8.83% | +767.54 |
| PT ULTRSHRT SP500 PS (SDS) | +9.78% | +850.39 |
| PT ULTRSHR MC400 PS (MZZ) | +10.35% | +900.24 |
| ULTRASHORT SMALLCAP6 (SDD) | +11.20% | +973.38 |
| ULTRASHORT RUSSELL20 (TWM) | +11.95% | +1039.27 |
| PST ULSHT RSL1K VALU (SJF) | +7.99% | +695.03 |
| PST ULSHT RSL1K GR (SFK) | +9.44% | +820.95 |
| PST ULSHT RSL MC VAL (SJL) | +11.42% | +992.47 |
| PST ULSHT RSL MC GR (SDK) | +11.55% | +1004.57 |
| PST ULTSHT RSL2K VAL (SJH) | +13.78% | +1198.35 |
| PST ULSHT RSL2K GR (SKK) | +12.98% | +1128.07 |
| ULTRASHORT BASIC MAT (SMN) | +14.52% | +1262.30 |
| ULTRASHORT CONSUMER (SZK) | +7.77% | +675.49 |
| ULTRASHORT CONSUMER (SCC) | +10.30% | +895.82 |
| ULTRASHORT FINANCIAL (SKF) | +11.49% | +999.25 |
| ULTRASHORT HEALTH CA (RXD) | +4.76% | +414.25 |
| ULTRASHORT INDUSTRIA (SIJ) | +10.63% | +924.20 |
| ULTRASHORT OIL & GAS (DUG) | +14.01% | +1217.59 |
| ULTRASHORT REAL ESTA (SRS) | +13.73% | +1193.77 |
| ULTRASHORT SEMICONDU (SSG) | +8.39% | +729.33 |
| ULTRASHORT TECHNOLOG (REW) | +9.54% | +829.09 |
| ULTRASHORT UTILITIES (SDP) | +5.83% | +506.62 |
| PROSHARES SHR MSCI E (EUM) | +7.91% | +687.49 |
| PROSHARES SHORT MSCI (EFZ) | +4.54% | +394.52 |
| PROSHARES ULTRASHORT (EFU) | +10.60% | +921.30 |
| PROSHARES UTLRASHORT (EEV) | +15.05% | +1308.33 |
| PROSHARES US MSCI JP (EWV) | +5.21% | +452.98 |
| PROSHARES ULTRASHORT (FXP) | +7.72% | +671.38 |
| ULTRA QQQ PROSHARES (QLD) | -10.12% | -879.46 |
| ULTRA DOW30 PROSHRS (DDM) | -8.20% | -712.93 |
| ULTRA S& P500 PROSHRS (SSO) | -9.64% | -838.09 |
| ULTRA MC400 PROSHRS (MVV) | -10.34% | -899.37 |
| PROSH ULTRA SMALLCAP (SAA) | -11.96% | -1040.04 |
| ULTRA RUSSELL2000 PR (UWM) | -12.20% | -1060.55 |
| PST ULT RUS1000 VAL (UVG) | -10.82% | -940.75 |
| PST ULT RSL1000 GR (UKF) | -9.29% | -807.78 |
| PST ULT RSL MC VALU (UVU) | -10.12% | -879.84 |
| PST ULT RSL MC GR PS (UKW) | -11.73% | -1020.08 |
| PST ULT RSL2000 VALU (UVT) | -12.16% | -1057.05 |
| PST ULT RSL2000 GR (UKK) | -12.34% | -1073.22 |
| ULTRA BASIC MATERIAL (UYM) | -16.06% | -1396.41 |
| ULTRA CONSUMER GOODS (UGE) | -7.58% | -659.25 |
| ULTRA CONSUMER SERVI (UCC) | -9.92% | -862.59 |
| ULTRA FINANCIALS PRO (UYG) | -11.65% | -1013.12 |
| ULTRA HEALTH CARE PR (RXL) | -6.10% | -530.69 |
| ULTRA INDUSTRIALS PR (UXI) | -9.12% | -793.15 |
| ULTRA OIL & GAS PROS (DIG) | -15.48% | -1345.72 |
| ULTRA REAL ESTATE PR (URE) | -11.13% | -967.29 |
| ULTRA SEMICONDUCTORS (USD) | -8.92% | -775.63 |
| ULTRA TECHNOLOGY PRO (ROM) | -9.11% | -792.45 |
| ULTRA UTILITIES PROS (UPW) | -6.09% | -529.47 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -2.31% | -201.02 |
| POWERSHARES DB BASE (BOM) | -0.25% | -21.59 |
| POWERSHARES DB BASE (BOS) | +0.25% | +21.72 |
| POWERSHARES DB CRUDE (DTO) | +7.07% | +614.55 |
| POWERSHARES DB CRUDE (SZO) | +4.11% | +357.04 |
| POWERSHARES DB CRUDE (DXO) | -11.50% | -1000.19 |
| POWERSHARES DB CRUDE (OLO) | -3.50% | -304.29 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -11.13% | -967.62 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +15.89% | +1381.28 |
| Direxion Small Cap Bull 3x Shares (TNA) | -17.70% | -1538.44 |
| Direxion Small Cap Bear 3x Shares (TZA) | +19.28% | +1676.03 |
| Direxion Energy Bull 3x Shares (ERX) | -19.88% | -1728.66 |
| Direxion Energy Bear 3x Shares (ERY) | +24.42% | +2122.69 |
| Direxion Financial Bull 3x Shares (FAS) | -18.23% | -1585.06 |
| Direxion Financial Bear 3x Shares (FAZ) | +19.14% | +1663.60 |
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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Tuesday, November 11, 2008
Using the Dollar To Implement Fed Policy
Ben Bernanke's words in 2002 about how the dollar could be used to fight deflation seem to be near the truth today:
Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934. The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation.
Moves in the dollar seem to be driving both the stock and the commodity markets nowadays. Fortunately, the wave count being seen in the dollar makes it likely that we'll see a reversal in several related markets in the near future.
Stocks fumbled toward a trading low Tuesday, but not wholly successfully:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -1.99% | -176.58 |
| DIAMONDS TRUST SER 1 (DIA) | -2.45% | -217.45 |
| ULTRA DOW30 PROSHRS (DDM) | -5.02% | -445.08 |
| PT ULTRSHRT DOW30 PS (DXD) | +3.94% | +349.17 |
| S&P 500 (index) | -2.30% | -203.72 |
| S& P DEP RECEIPTS (SPY) | -3.01% | -266.62 |
| ULTRA S& P500 PROSHRS (SSO) | -3.07% | -272.12 |
| PT ULTRSHRT SP500 PS (SDS) | +4.97% | +441.29 |
| NYSE Composite (index) | -2.89% | -256.36 |
| ISHARES NYSE CMP IDX (NYC) | -2.22% | -197.31 |
| S&P SmallCap 600 (index) | -2.14% | -190.11 |
| PROSH ULTRA SMALLCAP (SAA) | -3.55% | -314.64 |
| SHORT SMALLCAP600 PR (SBB) | +0.88% | +77.79 |
| ULTRASHORT SMALLCAP6 (SDD) | +4.65% | +412.05 |
| Russell 2000 (index) | -2.19% | -194.46 |
| ISHARE RUS 2000 INDX (IWM) | -2.16% | -191.94 |
| ULTRA RUSSELL2000 PR (UWM) | -4.03% | -357.12 |
| ULTRASHORT RUSSELL20 (TWM) | +4.15% | +368.41 |
| NASDAQ-100 (index) | -2.14% | -190.03 |
| POWERSHARES QQQ TR 1 (QQQQ) | -2.18% | -193.15 |
| ULTRA QQQ PROSHARES (QLD) | -3.96% | -351.11 |
| PT UTLRSHRT QQQ PS (QID) | +4.31% | +382.32 |
| S&P MidCap 400 (index) | -2.35% | -208.56 |
| ISHARE SP MC 400 INX (IJH) | -2.19% | -194.31 |
| ULTRA MC400 PROSHRS (MVV) | -4.79% | -424.85 |
| PT ULTRSHR MC400 PS (MZZ) | +4.65% | +412.06 |
| GREENHAVEN CONT IDX (GCC) | -2.35% | -208.49 |
| Amex Gold (index) | -6.33% | -561.14 |
| MKT VECT GOLD MNRS (GDX) | -6.44% | -571.43 |
| STREETTRACKS GOLD TR (GLD) | -2.08% | -184.45 |
| DB GOLD DBL SH ETN (DZZ) | +4.81% | +426.98 |
| DB GOLD DBL LG ETN (DGP) | -4.34% | -385.11 |
| Semiconductor Sector (index) | -1.42% | -126.14 |
| ULTRA SEMICONDUCTORS (USD) | -4.70% | -416.51 |
| ULTRASHORT SEMICONDU (SSG) | +5.30% | +469.88 |
| ISHARE DJ FIN SC INX (IYF) | -1.98% | -175.78 |
| ISHARES LEHMAN 20 YR (TLT) | +0.30% | +26.22 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.37% | +32.99 |
| ISHARES LEH AGG FD (AGG) | +0.76% | +67.12 |
| ISHARES GS $ INVESTO (LQD) | +0.32% | +28.50 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.07% | +6.31 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.04% | -92.18 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -1.03% | -91.09 |
| SHORT QQQ PROSHARES (PSQ) | +1.93% | +171.43 |
| SHRT DOW30 PROSHARES (DOG) | +2.51% | +222.32 |
| SHRT S& P500 PROSHRS (SH) | +2.31% | +204.86 |
| SHRT MC400 PROSHARES (MYY) | +2.38% | +210.77 |
| SHORT SMALLCAP600 PR (SBB) | +0.88% | +77.79 |
| SHORT RUSSELL2000 PR (RWM) | +2.15% | +191.12 |
| PT UTLRSHRT QQQ PS (QID) | +4.31% | +382.32 |
| PT ULTRSHRT DOW30 PS (DXD) | +3.94% | +349.17 |
| PT ULTRSHRT SP500 PS (SDS) | +4.97% | +441.29 |
| PT ULTRSHR MC400 PS (MZZ) | +4.65% | +412.06 |
| ULTRASHORT SMALLCAP6 (SDD) | +4.65% | +412.05 |
| ULTRASHORT RUSSELL20 (TWM) | +4.15% | +368.41 |
| PST ULSHT RSL1K VALU (SJF) | +5.72% | +507.30 |
| PST ULSHT RSL1K GR (SFK) | +4.92% | +436.15 |
| PST ULSHT RSL MC VAL (SJL) | +2.79% | +247.15 |
| PST ULSHT RSL MC GR (SDK) | +6.04% | +535.89 |
| PST ULTSHT RSL2K VAL (SJH) | +2.74% | +243.02 |
| PST ULSHT RSL2K GR (SKK) | +4.12% | +365.79 |
| ULTRASHORT BASIC MAT (SMN) | +10.93% | +969.85 |
| ULTRASHORT CONSUMER (SZK) | +3.10% | +274.85 |
| ULTRASHORT CONSUMER (SCC) | +5.44% | +482.49 |
| ULTRASHORT FINANCIAL (SKF) | +5.11% | +453.03 |
| ULTRASHORT HEALTH CA (RXD) | +2.81% | +249.22 |
| ULTRASHORT INDUSTRIA (SIJ) | +5.01% | +444.45 |
| ULTRASHORT OIL & GAS (DUG) | +7.09% | +629.34 |
| ULTRASHORT REAL ESTA (SRS) | +2.02% | +178.96 |
| ULTRASHORT SEMICONDU (SSG) | +5.30% | +469.88 |
| ULTRASHORT TECHNOLOG (REW) | +4.64% | +411.45 |
| ULTRASHORT UTILITIES (SDP) | +0.51% | +44.99 |
| PROSHARES SHR MSCI E (EUM) | +5.21% | +462.60 |
| PROSHARES SHORT MSCI (EFZ) | +4.14% | +366.88 |
| PROSHARES ULTRASHORT (EFU) | +5.77% | +511.76 |
| PROSHARES UTLRASHORT (EEV) | +11.68% | +1035.70 |
| PROSHARES US MSCI JP (EWV) | +6.73% | +597.29 |
| PROSHARES ULTRASHORT (FXP) | +10.30% | +913.86 |
| ULTRA QQQ PROSHARES (QLD) | -3.96% | -351.11 |
| ULTRA DOW30 PROSHRS (DDM) | -5.02% | -445.08 |
| ULTRA S& P500 PROSHRS (SSO) | -3.07% | -272.12 |
| ULTRA MC400 PROSHRS (MVV) | -4.79% | -424.85 |
| PROSH ULTRA SMALLCAP (SAA) | -3.55% | -314.64 |
| ULTRA RUSSELL2000 PR (UWM) | -4.03% | -357.12 |
| PST ULT RUS1000 VAL (UVG) | -2.94% | -261.03 |
| PST ULT RSL1000 GR (UKF) | -3.78% | -335.64 |
| PST ULT RSL MC VALU (UVU) | -4.18% | -370.95 |
| PST ULT RSL MC GR PS (UKW) | -5.67% | -503.33 |
| PST ULT RSL2000 VALU (UVT) | -3.08% | -273.31 |
| PST ULT RSL2000 GR (UKK) | -4.15% | -368.19 |
| ULTRA BASIC MATERIAL (UYM) | -10.20% | -905.06 |
| ULTRA CONSUMER GOODS (UGE) | -3.69% | -327.41 |
| ULTRA CONSUMER SERVI (UCC) | -3.77% | -334.32 |
| ULTRA FINANCIALS PRO (UYG) | -4.28% | -379.67 |
| ULTRA HEALTH CARE PR (RXL) | -2.36% | -209.52 |
| ULTRA INDUSTRIALS PR (UXI) | -5.54% | -491.17 |
| ULTRA OIL & GAS PROS (DIG) | -5.96% | -529.04 |
| ULTRA REAL ESTATE PR (URE) | -7.10% | -629.66 |
| ULTRA SEMICONDUCTORS (USD) | -4.70% | -416.51 |
| ULTRA TECHNOLOGY PRO (ROM) | -4.86% | -431.08 |
| ULTRA UTILITIES PROS (UPW) | -0.55% | -48.36 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +5.01% | +444.14 |
| POWERSHARES DB BASE (BOS) | +1.52% | +135.02 |
| POWERSHARES DB CRUDE (DTO) | +9.09% | +805.90 |
| POWERSHARES DB CRUDE (SZO) | +4.73% | +419.68 |
| POWERSHARES DB CRUDE (DXO) | -9.60% | -851.57 |
| POWERSHARES DB CRUDE (OLO) | -4.99% | -442.47 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -6.61% | -586.71 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +6.18% | +548.10 |
| Direxion Small Cap Bull 3x Shares (TNA) | -5.49% | -487.06 |
| Direxion Small Cap Bear 3x Shares (TZA) | +6.01% | +533.55 |
| Direxion Energy Bull 3x Shares (ERX) | -7.69% | -682.10 |
| Direxion Energy Bear 3x Shares (ERY) | +6.10% | +541.20 |
| Direxion Financial Bull 3x Shares (FAS) | -5.44% | -482.24 |
| Direxion Financial Bear 3x Shares (FAZ) | +6.54% | +579.88 |
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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Monday, November 10, 2008
Rangebound Markets
As we move toward the Christmas shopping season, the markets are in "wait and see" mode. They liked the infusion of cash from China to stimulate their economy, but didn't like much of the rest of the news Monday. Consequently, the picture was mixed and to the downside slightly. Note that we have added the new 300% ETFs from Direxion to the table below:
Change From 7 Nov 2008 To 10 Nov 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.82% | -73.27 |
| DIAMONDS TRUST SER 1 (DIA) | -1.33% | -119.08 |
| ULTRA DOW30 PROSHRS (DDM) | -1.07% | -95.50 |
| PT ULTRSHRT DOW30 PS (DXD) | +1.99% | +177.72 |
| S&P 500 (index) | -1.38% | -123.19 |
| S& P DEP RECEIPTS (SPY) | -1.45% | -129.61 |
| ULTRA S& P500 PROSHRS (SSO) | -4.19% | -374.67 |
| PT ULTRSHRT SP500 PS (SDS) | +1.30% | +116.41 |
| NYSE Composite (index) | -1.19% | -106.51 |
| ISHARES NYSE CMP IDX (NYC) | -1.87% | -167.10 |
| S&P SmallCap 600 (index) | -2.34% | -209.39 |
| PROSH ULTRA SMALLCAP (SAA) | -4.33% | -387.59 |
| SHORT SMALLCAP600 PR (SBB) | +2.23% | +199.49 |
| ULTRASHORT SMALLCAP6 (SDD) | +4.02% | +359.42 |
| Russell 2000 (index) | -2.51% | -224.40 |
| ISHARE RUS 2000 INDX (IWM) | -2.31% | -206.72 |
| ULTRA RUSSELL2000 PR (UWM) | -4.59% | -410.66 |
| ULTRASHORT RUSSELL20 (TWM) | +4.72% | +421.88 |
| NASDAQ-100 (index) | -2.39% | -214.09 |
| POWERSHARES QQQ TR 1 (QQQQ) | -1.35% | -120.44 |
| ULTRA QQQ PROSHARES (QLD) | -1.67% | -149.59 |
| PT UTLRSHRT QQQ PS (QID) | +2.77% | +247.76 |
| S&P MidCap 400 (index) | -2.48% | -221.65 |
| ISHARE SP MC 400 INX (IJH) | -2.43% | -217.74 |
| ULTRA MC400 PROSHRS (MVV) | -4.39% | -393.03 |
| PT ULTRSHR MC400 PS (MZZ) | +5.97% | +534.23 |
| GREENHAVEN CONT IDX (GCC) | +1.12% | +100.27 |
| Amex Gold (index) | +4.69% | +419.07 |
| MKT VECT GOLD MNRS (GDX) | +5.96% | +532.61 |
| STREETTRACKS GOLD TR (GLD) | +1.49% | +133.23 |
| DB GOLD DBL SH ETN (DZZ) | -2.89% | -258.36 |
| DB GOLD DBL LG ETN (DGP) | +2.95% | +264.25 |
| Semiconductor Sector (index) | -3.90% | -349.03 |
| ULTRA SEMICONDUCTORS (USD) | -5.85% | -523.59 |
| ULTRASHORT SEMICONDU (SSG) | +3.42% | +305.63 |
| ISHARE DJ FIN SC INX (IYF) | -4.29% | -383.89 |
| ISHARES LEHMAN 20 YR (TLT) | +0.49% | +43.65 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.10% | +9.08 |
| ISHARES LEH AGG FD (AGG) | -0.64% | -57.11 |
| ISHARES GS $ INVESTO (LQD) | +0.04% | +3.96 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.31% | +27.67 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.03% | -2.69 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -1.05% | -93.77 |
| SHORT QQQ PROSHARES (PSQ) | +1.81% | +162.09 |
| SHRT DOW30 PROSHARES (DOG) | +0.76% | +68.10 |
| SHRT S& P500 PROSHRS (SH) | +1.19% | +106.60 |
| SHRT MC400 PROSHARES (MYY) | +1.54% | +137.60 |
| SHORT SMALLCAP600 PR (SBB) | +2.23% | +199.49 |
| SHORT RUSSELL2000 PR (RWM) | +2.24% | +200.77 |
| PT UTLRSHRT QQQ PS (QID) | +2.77% | +247.76 |
| PT ULTRSHRT DOW30 PS (DXD) | +1.99% | +177.72 |
| PT ULTRSHRT SP500 PS (SDS) | +1.30% | +116.41 |
| PT ULTRSHR MC400 PS (MZZ) | +5.97% | +534.23 |
| ULTRASHORT SMALLCAP6 (SDD) | +4.02% | +359.42 |
| ULTRASHORT RUSSELL20 (TWM) | +4.72% | +421.88 |
| PST ULSHT RSL1K VALU (SJF) | +3.08% | +275.32 |
| PST ULSHT RSL1K GR (SFK) | +1.05% | +94.33 |
| PST ULSHT RSL MC VAL (SJL) | +3.89% | +347.83 |
| PST ULSHT RSL MC GR (SDK) | +1.14% | +102.39 |
| PST ULTSHT RSL2K VAL (SJH) | +1.61% | +143.72 |
| PST ULSHT RSL2K GR (SKK) | +3.91% | +349.71 |
| ULTRASHORT BASIC MAT (SMN) | -1.32% | -117.68 |
| ULTRASHORT CONSUMER (SZK) | +1.58% | +141.22 |
| ULTRASHORT CONSUMER (SCC) | +3.12% | +278.68 |
| ULTRASHORT FINANCIAL (SKF) | +7.67% | +685.79 |
| ULTRASHORT HEALTH CA (RXD) | +0.59% | +52.77 |
| ULTRASHORT INDUSTRIA (SIJ) | +0.49% | +43.55 |
| ULTRASHORT OIL & GAS (DUG) | -1.59% | -142.45 |
| ULTRASHORT REAL ESTA (SRS) | +19.53% | +1747.06 |
| ULTRASHORT SEMICONDU (SSG) | +3.42% | +305.63 |
| ULTRASHORT TECHNOLOG (REW) | +3.25% | +290.47 |
| ULTRASHORT UTILITIES (SDP) | +4.16% | +372.38 |
| PROSHARES SHR MSCI E (EUM) | -1.48% | -132.42 |
| PROSHARES SHORT MSCI (EFZ) | +0.81% | +72.25 |
| PROSHARES ULTRASHORT (EFU) | +3.29% | +294.33 |
| PROSHARES UTLRASHORT (EEV) | -3.72% | -332.37 |
| PROSHARES US MSCI JP (EWV) | -1.23% | -109.76 |
| PROSHARES ULTRASHORT (FXP) | -8.94% | -799.22 |
| ULTRA QQQ PROSHARES (QLD) | -1.67% | -149.59 |
| ULTRA DOW30 PROSHRS (DDM) | -1.07% | -95.50 |
| ULTRA S& P500 PROSHRS (SSO) | -4.19% | -374.67 |
| ULTRA MC400 PROSHRS (MVV) | -4.39% | -393.03 |
| PROSH ULTRA SMALLCAP (SAA) | -4.33% | -387.59 |
| ULTRA RUSSELL2000 PR (UWM) | -4.59% | -410.66 |
| PST ULT RUS1000 VAL (UVG) | -4.09% | -365.59 |
| PST ULT RSL1000 GR (UKF) | -3.18% | -284.45 |
| PST ULT RSL MC VALU (UVU) | -4.29% | -383.90 |
| PST ULT RSL MC GR PS (UKW) | -4.15% | -370.85 |
| PST ULT RSL2000 VALU (UVT) | -5.13% | -458.66 |
| PST ULT RSL2000 GR (UKK) | -0.14% | -12.78 |
| ULTRA BASIC MATERIAL (UYM) | +1.24% | +111.25 |
| ULTRA CONSUMER GOODS (UGE) | -1.02% | -91.03 |
| ULTRA CONSUMER SERVI (UCC) | -2.78% | -249.05 |
| ULTRA FINANCIALS PRO (UYG) | -9.61% | -859.78 |
| ULTRA HEALTH CARE PR (RXL) | -2.10% | -187.58 |
| ULTRA INDUSTRIALS PR (UXI) | +0.67% | +59.98 |
| ULTRA OIL & GAS PROS (DIG) | +0.86% | +77.24 |
| ULTRA REAL ESTATE PR (URE) | -14.67% | -1311.63 |
| ULTRA SEMICONDUCTORS (USD) | -5.85% | -523.59 |
| ULTRA TECHNOLOGY PRO (ROM) | -3.44% | -307.53 |
| ULTRA UTILITIES PROS (UPW) | -3.96% | -353.80 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | -1.46% | -130.24 |
| POWERSHARES DB BASE (BDD) | -3.29% | -294.29 |
| POWERSHARES DB BASE (BOS) | -1.28% | -114.23 |
| POWERSHARES DB CRUDE (DTO) | -3.35% | -299.19 |
| POWERSHARES DB CRUDE (SZO) | -1.44% | -128.91 |
| POWERSHARES DB CRUDE (DXO) | +2.88% | +257.64 |
| POWERSHARES DB CRUDE (OLO) | +5.25% | +469.55 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -3.89% | -348.08 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +2.20% | +197.14 |
| Direxion Small Cap Bull 3x Shares (TNA) | -7.57% | -677.07 |
| Direxion Small Cap Bear 3x Shares (TZA) | +6.07% | +542.67 |
| Direxion Energy Bull 3x Shares (ERX) | +3.31% | +296.47 |
| Direxion Energy Bear 3x Shares (ERY) | +0.52% | +46.93 |
| Direxion Financial Bull 3x Shares (FAS) | -9.45% | -845.44 |
| Direxion Financial Bear 3x Shares (FAZ) | +8.61% | +769.63 |
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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Sunday, November 09, 2008
Unemployment Rate Soars to 11.8%* As Economy Free-Falls Into Depression
The message that the Baltic Dry Index is sending is ominous---and it's being confirmed by the Unemployment Rate, which surged to 11.8% in October according to the Bureau of Labor Statistics in Washingon, DC. That's a jump of 40% in the number of unemployed in the last year. The economy is in free-fall right now and more and more businesses---most especially manufacturing businesses like GM---are facing Chapter 11 bankruptcy, some in the coming week. The fallout from the credit crisis is forcing ships to sit idle at ports around the world as banks refuse to issue letters of credit for cargoes. This is a replay of the stoppages associated with the 1930 world trade collapse which accelerated the plunge into the Great Depression.
GM executives are in Washington presenting their case for a bailout. They are likely to get it, but it will only delay the inevitable. The US carmakers are a doomed species and will be out of business soon---or acquired by foreign interests. The dominoes known to some as the "Strong Economy" are falling, one by one, and there appears to be nothing that can stop the collapse now.
Alan Greenspan, former "maestro" of the Federal Reserve Bank in Washington, the so-called "central bank," used to follow a little-known indicator known as the Weekly Leading Index. It faithfully forecast the prospects for the US economy and helped Alan keep the economy growing back in the days when banks were banks, not simply repositories of bailout money which doesn't get loaned out to drive the economy. According to the index, however, the plates are falling off the poles and smashing on the floor. The growth rate of the index is extremely negative---the most negative it has been in its entire 60-year history. The index itself is at levels last seen not at the bottom of the last recession, but in 1996, which means this recession is far worse than the last one. And, since the index is accelerating to the downside, that projects several years of economic decline, so we're early in this recession with many years to a bottom and the beginning of a recovery. In fact, one can make a case that the economy never really recovered from the 2001 recession---mortgage equity withdrawals accounted for most of the "growth" in the economy during the "recovery." Taking on extra debt does not represent a meaningful recovery.
One of the biggest problems in the economy is that the bailout has not done what it was promised to do. It has helped the banks pay employees big year-end bonuses and acquire other banks, but has not caused loans to be made to conduct the real business that drives the economy. In other words, the bailout was an infusion to prop up banks, not their customers. Now, this sounds like a racket to us and those banks that aren't lending should be seized by the government and their officers should go to jail for fraud. But, since they are the Treasury Secretary's personal buddies, that won't happen. So, we have an economy that's grinding to a halt while the lame ducks in Washington fiddle. Obama says he's not President yet, there can only be one President at a time, and he can't do anything for another couple of months---it's up to the current President and Congress to take action. Therein lies the possibility that the current situation will morph into a Depression while Washington fiddles.
The stock market rallied Friday as shorts took profits after the largest two-day decline in 21 years. But ominous statements from Washington suggesting that the government seize personal 401(k) and IRA balances and replace them with government bonds paying 3% sent a chill throughout the nation and strongly suggested that the raid on the American taxpayer may be taking a sharper turn to the left which conceivably could trigger a more violent reaction. Sales of guns and ammunition soared on the news:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +2.85% | +248.02 |
| DIAMONDS TRUST SER 1 (DIA) | +3.12% | +271.62 |
| ULTRA DOW30 PROSHRS (DDM) | +5.19% | +451.42 |
| PT ULTRSHRT DOW30 PS (DXD) | -6.09% | -529.58 |
| S&P 500 (index) | +3.10% | +269.36 |
| S& P DEP RECEIPTS (SPY) | +3.35% | +291.10 |
| ULTRA S& P500 PROSHRS (SSO) | +5.34% | +464.19 |
| PT ULTRSHRT SP500 PS (SDS) | -4.98% | -432.95 |
| NYSE Composite (index) | +3.61% | +313.90 |
| ISHARES NYSE CMP IDX (NYC) | +3.86% | +335.80 |
| S&P SmallCap 600 (index) | +1.51% | +131.12 |
| PROSH ULTRA SMALLCAP (SAA) | +1.79% | +155.60 |
| SHORT SMALLCAP600 PR (SBB) | +0.14% | +12.08 |
| ULTRASHORT SMALLCAP6 (SDD) | -1.93% | -168.16 |
| Russell 2000 (index) | +2.01% | +174.50 |
| ISHARE RUS 2000 INDX (IWM) | +2.08% | +180.61 |
| ULTRA RUSSELL2000 PR (UWM) | +3.42% | +297.80 |
| ULTRASHORT RUSSELL20 (TWM) | -3.28% | -285.63 |
| NASDAQ-100 (index) | +3.16% | +275.02 |
| POWERSHARES QQQ TR 1 (QQQQ) | +2.06% | +179.27 |
| ULTRA QQQ PROSHARES (QLD) | +4.36% | +379.47 |
| PT UTLRSHRT QQQ PS (QID) | -4.83% | -420.28 |
| S&P MidCap 400 (index) | +2.50% | +217.09 |
| ISHARE SP MC 400 INX (IJH) | +2.16% | +188.21 |
| ULTRA MC400 PROSHRS (MVV) | +4.44% | +385.66 |
| PT ULTRSHR MC400 PS (MZZ) | -5.82% | -506.06 |
| GREENHAVEN CONT IDX (GCC) | +0.18% | +15.63 |
| Amex Gold (index) | +4.69% | +408.16 |
| MKT VECT GOLD MNRS (GDX) | -0.46% | -39.65 |
| STREETTRACKS GOLD TR (GLD) | +0.39% | +33.71 |
| DB GOLD DBL SH ETN (DZZ) | -1.12% | -97.10 |
| DB GOLD DBL LG ETN (DGP) | +1.23% | +106.70 |
| Semiconductor Sector (index) | +1.71% | +148.60 |
| ULTRA SEMICONDUCTORS (USD) | +6.22% | +540.73 |
| ULTRASHORT SEMICONDU (SSG) | -4.67% | -406.28 |
| ISHARE DJ FIN SC INX (IYF) | +2.69% | +233.53 |
| ISHARES LEHMAN 20 YR (TLT) | -0.65% | -56.82 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.36% | -31.28 |
| ISHARES LEH AGG FD (AGG) | +0.51% | +44.11 |
| ISHARES GS $ INVESTO (LQD) | -0.70% | -61.24 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.18% | -15.50 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.71% | +61.97 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +1.06% | +92.13 |
| SHORT QQQ PROSHARES (PSQ) | -2.46% | -214.10 |
| SHRT DOW30 PROSHARES (DOG) | -3.00% | -261.17 |
| SHRT S& P500 PROSHRS (SH) | -2.75% | -239.13 |
| SHRT MC400 PROSHARES (MYY) | -1.54% | -133.72 |
| SHORT SMALLCAP600 PR (SBB) | +0.14% | +12.08 |
| SHORT RUSSELL2000 PR (RWM) | -1.70% | -147.95 |
| PT UTLRSHRT QQQ PS (QID) | -4.83% | -420.28 |
| PT ULTRSHRT DOW30 PS (DXD) | -6.09% | -529.58 |
| PT ULTRSHRT SP500 PS (SDS) | -4.98% | -432.95 |
| PT ULTRSHR MC400 PS (MZZ) | -5.82% | -506.06 |
| ULTRASHORT SMALLCAP6 (SDD) | -1.93% | -168.16 |
| ULTRASHORT RUSSELL20 (TWM) | -3.28% | -285.63 |
| PST ULSHT RSL1K VALU (SJF) | -6.59% | -572.63 |
| PST ULSHT RSL1K GR (SFK) | -3.51% | -304.91 |
| PST ULSHT RSL MC VAL (SJL) | -2.47% | -214.66 |
| PST ULSHT RSL MC GR (SDK) | -3.08% | -267.95 |
| PST ULTSHT RSL2K VAL (SJH) | +0.78% | +67.56 |
| PST ULSHT RSL2K GR (SKK) | -3.93% | -341.60 |
| ULTRASHORT BASIC MAT (SMN) | -6.97% | -605.69 |
| ULTRASHORT CONSUMER (SZK) | -3.47% | -302.17 |
| ULTRASHORT CONSUMER (SCC) | -2.85% | -247.93 |
| ULTRASHORT FINANCIAL (SKF) | -4.49% | -390.42 |
| ULTRASHORT HEALTH CA (RXD) | -4.36% | -378.83 |
| ULTRASHORT INDUSTRIA (SIJ) | -4.85% | -421.62 |
| ULTRASHORT OIL & GAS (DUG) | -9.23% | -802.53 |
| ULTRASHORT REAL ESTA (SRS) | -13.18% | -1145.84 |
| ULTRASHORT SEMICONDU (SSG) | -4.67% | -406.28 |
| ULTRASHORT TECHNOLOG (REW) | -4.12% | -357.99 |
| ULTRASHORT UTILITIES (SDP) | -9.09% | -790.53 |
| PROSHARES SHR MSCI E (EUM) | -8.55% | -743.82 |
| PROSHARES SHORT MSCI (EFZ) | -6.11% | -531.45 |
| PROSHARES ULTRASHORT (EFU) | -11.68% | -1015.53 |
| PROSHARES UTLRASHORT (EEV) | -16.05% | -1395.58 |
| PROSHARES US MSCI JP (EWV) | -10.58% | -920.37 |
| PROSHARES ULTRASHORT (FXP) | -25.17% | -2188.66 |
| ULTRA QQQ PROSHARES (QLD) | +4.36% | +379.47 |
| ULTRA DOW30 PROSHRS (DDM) | +5.19% | +451.42 |
| ULTRA S& P500 PROSHRS (SSO) | +5.34% | +464.19 |
| ULTRA MC400 PROSHRS (MVV) | +4.44% | +385.66 |
| PROSH ULTRA SMALLCAP (SAA) | +1.79% | +155.60 |
| ULTRA RUSSELL2000 PR (UWM) | +3.42% | +297.80 |
| PST ULT RUS1000 VAL (UVG) | +5.17% | +449.47 |
| PST ULT RSL1000 GR (UKF) | +5.03% | +437.55 |
| PST ULT RSL MC VALU (UVU) | +2.07% | +180.20 |
| PST ULT RSL MC GR PS (UKW) | +5.57% | +484.47 |
| PST ULT RSL2000 VALU (UVT) | +0.05% | +4.46 |
| PST ULT RSL2000 GR (UKK) | -0.62% | -53.53 |
| ULTRA BASIC MATERIAL (UYM) | +6.88% | +598.15 |
| ULTRA CONSUMER GOODS (UGE) | +3.96% | +344.43 |
| ULTRA CONSUMER SERVI (UCC) | +1.59% | +138.10 |
| ULTRA FINANCIALS PRO (UYG) | +6.49% | +564.52 |
| ULTRA HEALTH CARE PR (RXL) | +5.03% | +437.12 |
| ULTRA INDUSTRIALS PR (UXI) | +1.92% | +167.16 |
| ULTRA OIL & GAS PROS (DIG) | +10.79% | +938.15 |
| ULTRA REAL ESTATE PR (URE) | +12.56% | +1092.17 |
| ULTRA SEMICONDUCTORS (USD) | +6.22% | +540.73 |
| ULTRA TECHNOLOGY PRO (ROM) | +4.75% | +412.68 |
| ULTRA UTILITIES PROS (UPW) | +8.83% | +768.00 |
| Other ETFs | ||
| PWRSHRS NDQ INTERNET (PNQI) | +0.35% | +30.38 |
| POWERSHARES DB BASE (BOM) | +1.69% | +146.95 |
| POWERSHARES DB BASE (BDD) | +2.64% | +229.84 |
| POWERSHARES DB BASE (BOS) | +2.20% | +191.41 |
| POWERSHARES DB CRUDE (DTO) | +0.01% | +1.07 |
| POWERSHARES DB CRUDE (SZO) | +0.04% | +3.69 |
| POWERSHARES DB CRUDE (DXO) | -0.21% | -17.86 |
| POWERSHARES DB CRUDE (OLO) | -6.10% | -530.73 |
*The real unemployment rate is much higher than the media generally reports.
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 . . . .
Thursday, November 06, 2008
How To Balance the Federal Budget
We have found a solution to a very pressing problem and it's very simple when you think about it.
The federal government is facing a trillion-dollar budget deficit which only promises to grow exponentially in future years. Where will the government get the money to pay its debts? We have the solution.
Remember when the government auctioned off portions of the electromagnetic spectrum to cell phone companies, television and radio stations and Google? While it's probably the most ridiculous idea to actually think that the government "owns" the electromagnetic spectrum, that's exactly what they did---and they got billions of dollars for it. Willingly.
Our idea is very similar to the airwaves auction, but will provide a massive, ongoing stream of revenue for the Treasury.
As you know, the Constitution of the United States says that the government has the right to print money. It never said that the citizens have the right to print money, just the government. But, the government has given---yes, given---the right to print money to private corporations who are called "banks". The Federal Reserve is one of them, the so-called "central bank". They got this right to print money for free.
You or I can print money, but it can't be called "US legal tender" and it can't just be a copy of US paper money. Oh, it's incredibly easy to do with a color laser printer (which is why they are trying to convince everyone that it's their patriotic duty to use dollar coins instead of dollar bills, but that's another story).
Yet, the banks get to do the same thing without penalty of law, or having to pay for the privilege.
Why should the government give away this privilege? Why not charge a "user fee" on every dollar a bank prints? For every dollar a private company prints, the government could demand a fee. We'll leave it to the government to determine how much of a fee, but giving away a license to the banks just isn't fair to the country when the taxpayer needs to keep as much of her income as possible. In fact, let's just call it the Fair Money Tax.
For those who aren't familiar with the process, here's how the bank prints money:
- A customer asks to borrow money from a banker.
- The banker prints the money based upon the fractional reserve system. This system allows the banker to print several times the amount of money he has on hand under the theory that depositors won't all demand their money back at once. For instance, for every dollar on deposit with the bank, the banker can print 5, 10, 20, or more dollars, dependent only on the fraction allowed under the fractional reserve system.
- The customer promises to pay back this new money plus a service fee (called "interest") for the privilege of allowing the banker to print money and loan it out.
- The banker hands this newly-created money to the borrower (nowadays, the banker simply creates the money in computer memory, crediting the customer's account, or issues him a check). This is where new money comes from. That's why it's called fiat money---it's created right out of thin air with nothing of substance to back it up except the faith of all parties.
- Due to the fact that most customers keep their money in a bank account, most of that new money is deposited in the bank, making it available for the banker to print more money the next time he loans money to a customer. This turnover is where the real magic happens and where each dollar on deposit can generate many times that number of dollars in circulation.
- The banker only pays taxes on his profits---and gets a bailout should the customer refuse to return the new money---he gets to loan that money out again and again. It's quite the racket (it may be the second oldest profession).
During this process, the government collects fees (known as "income" or "capital gains" taxes, generally). But, the banker has a license to print money and doesn't pay one cent to the government for the privilege (at least, there's no tax on the newly-printed money).
But, is this fair? The government gave away something the Constitution says only the government can do---print money. Why should the banker print money without paying for the privilege? After all, the bank has virtually no cost associated with actually printing the money. Oh, yes, they risk losing it, as the recent credit crisis emphasizes (but, even that isn't certain since the government is always standing behind the bank, willing to pay out trillions in bailouts to the banks). In normal times (and that's what the various bailouts are supposed to return the economy to, right?), those who print money get to keep the money once the borrower of that money returns it. Why not have the banker print extra money for the government as a service fee? The fee could be sent directly to the US Treasury to help cover the deficit. This would quickly mount up and make sure the banks pay their fair share at the same time.
Not only is this plan a benefit to the taxpayer, who may actually get a tax cut out of the arrangement, but it's also a way to keep the bankers in line by adjusting the tax as a governor on their debt-creation activities. When bankers go wild, just up the tax and force them to cut back on printing money. When times are tough, lower the fee and stimulate more loans.
Barack, if you're reading this blog, get your (non-banker) advisors together and tell them the budget crisis has been solved. This should ease your transition into the White House considerably when you balance the budget right off the bat.
As expected, the stock market continued crashing Thursday. The market is following the script of a pump-and-dump Election scheme, as it often does:
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -4.85% | -443.48 |
| DIAMONDS TRUST SER 1 (DIA) | -4.94% | -451.30 |
| ULTRA DOW30 PROSHRS (DDM) | -9.26% | -845.95 |
| PT ULTRSHRT DOW30 PS (DXD) | +9.38% | +857.08 |
| S&P 500 (index) | -4.88% | -445.66 |
| S& P DEP RECEIPTS (SPY) | -5.50% | -503.09 |
| ULTRA S& P500 PROSHRS (SSO) | -9.53% | -870.97 |
| PT ULTRSHRT SP500 PS (SDS) | +10.33% | +944.41 |
| NYSE Composite (index) | -5.73% | -524.09 |
| ISHARES NYSE CMP IDX (NYC) | -5.71% | -521.53 |
| S&P SmallCap 600 (index) | -3.47% | -317.46 |
| PROSH ULTRA SMALLCAP (SAA) | -6.61% | -603.84 |
| SHORT SMALLCAP600 PR (SBB) | +2.49% | +227.23 |
| ULTRASHORT SMALLCAP6 (SDD) | +5.60% | +512.16 |
| Russell 2000 (index) | -3.65% | -333.86 |
| ISHARE RUS 2000 INDX (IWM) | -3.88% | -354.30 |
| ULTRA RUSSELL2000 PR (UWM) | -7.09% | -647.54 |
| ULTRASHORT RUSSELL20 (TWM) | +6.57% | +600.75 |
| NASDAQ-100 (index) | -4.36% | -398.20 |
| POWERSHARES QQQ TR 1 (QQQQ) | -4.47% | -408.54 |
| ULTRA QQQ PROSHARES (QLD) | -9.45% | -863.92 |
| PT UTLRSHRT QQQ PS (QID) | +9.19% | +839.94 |
| S&P MidCap 400 (index) | -4.60% | -420.41 |
| ISHARE SP MC 400 INX (IJH) | -4.72% | -431.50 |
| ULTRA MC400 PROSHRS (MVV) | -9.27% | -847.41 |
| PT ULTRSHR MC400 PS (MZZ) | +9.09% | +830.67 |
| GREENHAVEN CONT IDX (GCC) | -2.58% | -235.98 |
| Amex Gold (index) | -9.25% | -845.14 |
| MKT VECT GOLD MNRS (GDX) | -4.65% | -425.17 |
| STREETTRACKS GOLD TR (GLD) | -0.80% | -72.81 |
| DB GOLD DBL SH ETN (DZZ) | +1.93% | +176.59 |
| DB GOLD DBL LG ETN (DGP) | -2.40% | -218.90 |
| Semiconductor Sector (index) | -7.12% | -650.29 |
| ULTRA SEMICONDUCTORS (USD) | -14.76% | -1349.39 |
| ULTRASHORT SEMICONDU (SSG) | +15.64% | +1429.21 |
| ISHARE DJ FIN SC INX (IYF) | -6.34% | -579.10 |
| ISHARES LEHMAN 20 YR (TLT) | -0.72% | -65.98 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.30% | -27.65 |
| ISHARES LEH AGG FD (AGG) | -0.41% | -37.69 |
| ISHARES GS $ INVESTO (LQD) | +0.69% | +62.79 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.04% | +3.26 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.30% | +27.80 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +1.40% | +128.40 |
| SHORT QQQ PROSHARES (PSQ) | +4.40% | +402.39 |
| SHRT DOW30 PROSHARES (DOG) | +4.45% | +406.56 |
| SHRT S& P500 PROSHRS (SH) | +4.76% | +435.20 |
| SHRT MC400 PROSHARES (MYY) | +4.53% | +414.42 |
| SHORT SMALLCAP600 PR (SBB) | +2.49% | +227.23 |
| SHORT RUSSELL2000 PR (RWM) | +3.52% | +321.94 |
| PT UTLRSHRT QQQ PS (QID) | +9.19% | +839.94 |
| PT ULTRSHRT DOW30 PS (DXD) | +9.38% | +857.08 |
| PT ULTRSHRT SP500 PS (SDS) | +10.33% | +944.41 |
| PT ULTRSHR MC400 PS (MZZ) | +9.09% | +830.67 |
| ULTRASHORT SMALLCAP6 (SDD) | +5.60% | +512.16 |
| ULTRASHORT RUSSELL20 (TWM) | +6.57% | +600.75 |
| PST ULSHT RSL1K VALU (SJF) | +11.76% | +1075.04 |
| PST ULSHT RSL1K GR (SFK) | +8.24% | +752.69 |
| PST ULSHT RSL MC VAL (SJL) | +13.51% | +1234.65 |
| PST ULSHT RSL MC GR (SDK) | +11.01% | +1006.36 |
| PST ULTSHT RSL2K VAL (SJH) | +6.44% | +588.76 |
| PST ULSHT RSL2K GR (SKK) | +6.25% | +571.40 |
| ULTRASHORT BASIC MAT (SMN) | +14.73% | +1346.50 |
| ULTRASHORT CONSUMER (SZK) | +6.14% | +560.79 |
| ULTRASHORT CONSUMER (SCC) | +7.03% | +642.48 |
| ULTRASHORT FINANCIAL (SKF) | +12.38% | +1131.47 |
| ULTRASHORT HEALTH CA (RXD) | +7.25% | +662.86 |
| ULTRASHORT INDUSTRIA (SIJ) | +12.85% | +1174.20 |
| ULTRASHORT OIL & GAS (DUG) | +11.26% | +1029.09 |
| ULTRASHORT REAL ESTA (SRS) | +9.71% | +887.33 |
| ULTRASHORT SEMICONDU (SSG) | +15.64% | +1429.21 |
| ULTRASHORT TECHNOLOG (REW) | +9.68% | +884.39 |
| ULTRASHORT UTILITIES (SDP) | +8.03% | +733.85 |
| PROSHARES SHR MSCI E (EUM) | +5.52% | +504.09 |
| PROSHARES SHORT MSCI (EFZ) | +4.34% | +396.56 |
| PROSHARES ULTRASHORT (EFU) | +13.58% | +1241.54 |
| PROSHARES UTLRASHORT (EEV) | +11.87% | +1084.91 |
| PROSHARES US MSCI JP (EWV) | +16.71% | +1527.30 |
| PROSHARES ULTRASHORT (FXP) | +17.23% | +1574.69 |
| ULTRA QQQ PROSHARES (QLD) | -9.45% | -863.92 |
| ULTRA DOW30 PROSHRS (DDM) | -9.26% | -845.95 |
| ULTRA S& P500 PROSHRS (SSO) | -9.53% | -870.97 |
| ULTRA MC400 PROSHRS (MVV) | -9.27% | -847.41 |
| PROSH ULTRA SMALLCAP (SAA) | -6.61% | -603.84 |
| ULTRA RUSSELL2000 PR (UWM) | -7.09% | -647.54 |
| PST ULT RUS1000 VAL (UVG) | -9.41% | -860.12 |
| PST ULT RSL1000 GR (UKF) | -9.46% | -864.24 |
| PST ULT RSL MC VALU (UVU) | -11.20% | -1023.48 |
| PST ULT RSL MC GR PS (UKW) | -11.39% | -1040.54 |
| PST ULT RSL2000 VALU (UVT) | -3.75% | -343.00 |
| PST ULT RSL2000 GR (UKK) | -7.12% | -651.08 |
| ULTRA BASIC MATERIAL (UYM) | -14.36% | -1312.07 |
| ULTRA CONSUMER GOODS (UGE) | -6.75% | -617.30 |
| ULTRA CONSUMER SERVI (UCC) | -8.37% | -764.72 |
| ULTRA FINANCIALS PRO (UYG) | -14.51% | -1326.51 |
| ULTRA HEALTH CARE PR (RXL) | -5.62% | -513.96 |
| ULTRA INDUSTRIALS PR (UXI) | -11.76% | -1074.80 |
| ULTRA OIL & GAS PROS (DIG) | -11.94% | -1091.30 |
| ULTRA REAL ESTATE PR (URE) | -16.32% | -1491.19 |
| ULTRA SEMICONDUCTORS (USD) | -14.76% | -1349.39 |
| ULTRA TECHNOLOGY PRO (ROM) | -10.81% | -987.84 |
| ULTRA UTILITIES PROS (UPW) | -7.87% | -719.63 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -2.75% | -251.02 |
| PWRSHRS NDQ INTERNET (PNQI) | -4.41% | -402.93 |
| POWERSHARES DB BASE (BOM) | +10.88% | +993.90 |
| POWERSHARES DB BASE (BDD) | -11.56% | -1056.36 |
| POWERSHARES DB BASE (BOS) | +4.72% | +431.12 |
| POWERSHARES DB CRUDE (DTO) | +11.60% | +1060.08 |
| POWERSHARES DB CRUDE (SZO) | +5.79% | +528.92 |
| POWERSHARES DB CRUDE (DXO) | -11.13% | -1017.33 |
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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Wednesday, November 05, 2008
The Shape of Things to Come
As expected, the market took a tumble Wednesday. Was it a reaction to the Obama victory? Or, was it a result of the Plunge Protection Team being fired after failing to levitate the market and thus losing the Republicans control of the government?
Of course, neither was the real explanation. The real explanation is that stocks are substantially overvalued and need to be reduced in price to move the merchandise. The economy has downshifted into a very low gear as the recession which has been ongoing for almost a year now suddenly looks more like a sinkhole than a ditch.
The problem here is the "E" in "P/E ratios." No one knows just what "E" will be in 2009. For that matter, it might simply stand for "Empty." The credit crisis threw a monkey wrench into the economy which is still rippling outward. The government estimates that if just one of the Big Three auto companies goes under, 2½ million jobs will be lost as a result. And, the sinking auto companies are just the tip of the iceberg right now. Jobs are being lost throughout the economy.
The ADP Employment Report for October, which estimates private job trends, counted 157,000 jobs lost during the month. While most jobs lost were in the goods-producing sectors, it was significant that 31,000 service-sector jobs were lost, the first time jobs were lost in that sector in six years.
Large companies have not created a net positive number of new jobs in decades. All new jobs have come from small and mid-sized companies. The report showed job losses were throughout all size businesses, with small companies shedding 25,000 jobs. ADP pointed out that this was the first time small companies lost jobs since November 2002. 91,000 jobs were lost in mid-sized businesses, while large companies' employment declined by 41,000.
Due to the accelerating plunge lower in the economy, potentially moving into a Depression by 2011, the Democrats stepped up their plans for bailing out the economy. This time, instead of pumping trillions of dollars into the pockets of private bankers to spend on luxury goods, they aim to send money to taxpayers. Unfortunately, there's much less money to be had and likely will fall far short of actually turning the economy. But, as the old saying goes, "You get what you pay for." And, the bankers had paid millions of dollars to get those trillions in bailout money. Just where were you when your Congressman passed the hat? At your desk, slaving away to earn an income? In your lab, inventing things to make life better? Obviously, you just don't get it. You should have been in the business of printing money and loaning it out to deadbeats like the bankers did. You'd be making money coming and going, sucker.
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -5.05% | -486.01 |
| DIAMONDS TRUST SER 1 (DIA) | -4.37% | -420.49 |
| ULTRA DOW30 PROSHRS (DDM) | -8.91% | -857.46 |
| PT ULTRSHRT DOW30 PS (DXD) | +9.61% | +925.42 |
| S&P 500 (index) | -5.03% | -484.25 |
| S& P DEP RECEIPTS (SPY) | -4.38% | -421.41 |
| ULTRA S& P500 PROSHRS (SSO) | -9.31% | -896.49 |
| PT ULTRSHRT SP500 PS (SDS) | +8.74% | +841.07 |
| NYSE Composite (index) | -5.25% | -505.03 |
| ISHARES NYSE CMP IDX (NYC) | -5.19% | -499.28 |
| S&P SmallCap 600 (index) | -5.28% | -508.60 |
| PROSH ULTRA SMALLCAP (SAA) | -9.78% | -941.60 |
| SHORT SMALLCAP600 PR (SBB) | +6.19% | +595.56 |
| ULTRASHORT SMALLCAP6 (SDD) | +11.10% | +1068.10 |
| Russell 2000 (index) | -5.74% | -552.34 |
| ISHARE RUS 2000 INDX (IWM) | -5.24% | -503.89 |
| ULTRA RUSSELL2000 PR (UWM) | -10.04% | -966.20 |
| ULTRASHORT RUSSELL20 (TWM) | +10.28% | +989.88 |
| NASDAQ-100 (index) | -4.86% | -468.00 |
| POWERSHARES QQQ TR 1 (QQQQ) | -5.21% | -501.94 |
| ULTRA QQQ PROSHARES (QLD) | -10.91% | -1050.36 |
| PT UTLRSHRT QQQ PS (QID) | +10.47% | +1007.48 |
| S&P MidCap 400 (index) | -5.11% | -491.83 |
| ISHARE SP MC 400 INX (IJH) | -4.62% | -445.06 |
| ULTRA MC400 PROSHRS (MVV) | -8.98% | -864.44 |
| PT ULTRSHR MC400 PS (MZZ) | +9.58% | +921.80 |
| GREENHAVEN CONT IDX (GCC) | -2.64% | -254.27 |
| Amex Gold (index) | -4.27% | -411.34 |
| MKT VECT GOLD MNRS (GDX) | -3.69% | -354.70 |
| STREETTRACKS GOLD TR (GLD) | -3.55% | -341.76 |
| DB GOLD DBL SH ETN (DZZ) | +9.29% | +893.76 |
| DB GOLD DBL LG ETN (DGP) | -6.44% | -620.12 |
| Semiconductor Sector (index) | -4.63% | -445.30 |
| ULTRA SEMICONDUCTORS (USD) | -11.11% | -1068.96 |
| ULTRASHORT SEMICONDU (SSG) | +11.40% | +1097.53 |
| ISHARE DJ FIN SC INX (IYF) | -8.08% | -778.04 |
| ISHARES LEHMAN 20 YR (TLT) | +1.19% | +114.14 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.53% | +50.97 |
| ISHARES LEH AGG FD (AGG) | +1.52% | +146.07 |
| ISHARES GS $ INVESTO (LQD) | +1.94% | +187.00 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.18% | +17.19 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.87% | -84.17 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -1.71% | -164.20 |
| SHORT QQQ PROSHARES (PSQ) | +5.93% | +571.25 |
| SHRT DOW30 PROSHARES (DOG) | +5.11% | +491.67 |
| SHRT S& P500 PROSHRS (SH) | +5.40% | +519.31 |
| SHRT MC400 PROSHARES (MYY) | +5.08% | +488.97 |
| SHORT SMALLCAP600 PR (SBB) | +6.19% | +595.56 |
| SHORT RUSSELL2000 PR (RWM) | +5.31% | +510.69 |
| PT UTLRSHRT QQQ PS (QID) | +10.47% | +1007.48 |
| PT ULTRSHRT DOW30 PS (DXD) | +9.61% | +925.42 |
| PT ULTRSHRT SP500 PS (SDS) | +8.74% | +841.07 |
| PT ULTRSHR MC400 PS (MZZ) | +9.58% | +921.80 |
| ULTRASHORT SMALLCAP6 (SDD) | +11.10% | +1068.10 |
| ULTRASHORT RUSSELL20 (TWM) | +10.28% | +989.88 |
| PST ULSHT RSL1K VALU (SJF) | +11.12% | +1070.81 |
| PST ULSHT RSL1K GR (SFK) | +9.88% | +951.15 |
| PST ULSHT RSL MC VAL (SJL) | +7.89% | +759.35 |
| PST ULSHT RSL MC GR (SDK) | +9.95% | +958.05 |
| PST ULTSHT RSL2K VAL (SJH) | +11.65% | +1121.76 |
| PST ULSHT RSL2K GR (SKK) | +11.48% | +1104.72 |
| ULTRASHORT BASIC MAT (SMN) | +13.38% | +1287.46 |
| ULTRASHORT CONSUMER (SZK) | +6.59% | +633.94 |
| ULTRASHORT CONSUMER (SCC) | +10.41% | +1001.68 |
| ULTRASHORT FINANCIAL (SKF) | +15.98% | +1538.58 |
| ULTRASHORT HEALTH CA (RXD) | +5.34% | +513.56 |
| ULTRASHORT INDUSTRIA (SIJ) | +10.26% | +988.00 |
| ULTRASHORT OIL & GAS (DUG) | +8.24% | +793.26 |
| ULTRASHORT REAL ESTA (SRS) | +18.73% | +1802.55 |
| ULTRASHORT SEMICONDU (SSG) | +11.40% | +1097.53 |
| ULTRASHORT TECHNOLOG (REW) | +10.94% | +1052.88 |
| ULTRASHORT UTILITIES (SDP) | +6.95% | +668.90 |
| PROSHARES SHR MSCI E (EUM) | +12.69% | +1221.12 |
| PROSHARES SHORT MSCI (EFZ) | +8.46% | +813.82 |
| PROSHARES ULTRASHORT (EFU) | +10.86% | +1045.76 |
| PROSHARES UTLRASHORT (EEV) | +23.51% | +2263.24 |
| PROSHARES US MSCI JP (EWV) | +2.98% | +286.65 |
| PROSHARES ULTRASHORT (FXP) | +15.69% | +1510.35 |
| ULTRA QQQ PROSHARES (QLD) | -10.91% | -1050.36 |
| ULTRA DOW30 PROSHRS (DDM) | -8.91% | -857.46 |
| ULTRA S& P500 PROSHRS (SSO) | -9.31% | -896.49 |
| ULTRA MC400 PROSHRS (MVV) | -8.98% | -864.44 |
| PROSH ULTRA SMALLCAP (SAA) | -9.78% | -941.60 |
| ULTRA RUSSELL2000 PR (UWM) | -10.04% | -966.20 |
| PST ULT RUS1000 VAL (UVG) | -11.05% | -1063.74 |
| PST ULT RSL1000 GR (UKF) | -9.37% | -901.74 |
| PST ULT RSL MC VALU (UVU) | -8.95% | -861.62 |
| PST ULT RSL MC GR PS (UKW) | -9.81% | -944.60 |
| PST ULT RSL2000 VALU (UVT) | -12.34% | -1187.53 |
| PST ULT RSL2000 GR (UKK) | -9.33% | -898.05 |
| ULTRA BASIC MATERIAL (UYM) | -14.04% | -1351.63 |
| ULTRA CONSUMER GOODS (UGE) | -6.61% | -636.68 |
| ULTRA CONSUMER SERVI (UCC) | -9.73% | -936.45 |
| ULTRA FINANCIALS PRO (UYG) | -14.35% | -1381.32 |
| ULTRA HEALTH CARE PR (RXL) | -6.94% | -668.42 |
| ULTRA INDUSTRIALS PR (UXI) | -10.58% | -1018.65 |
| ULTRA OIL & GAS PROS (DIG) | -9.68% | -931.97 |
| ULTRA REAL ESTATE PR (URE) | -13.05% | -1256.56 |
| ULTRA SEMICONDUCTORS (USD) | -11.11% | -1068.96 |
| ULTRA TECHNOLOGY PRO (ROM) | -10.94% | -1052.92 |
| ULTRA UTILITIES PROS (UPW) | -8.17% | -786.21 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -2.14% | -205.92 |
| PWRSHRS NDQ INTERNET (PNQI) | -1.77% | -170.53 |
| POWERSHARES DB BASE (BOM) | +8.99% | +865.26 |
| POWERSHARES DB BASE (BDD) | -7.00% | -674.23 |
| POWERSHARES DB BASE (BOS) | +3.70% | +355.80 |
| POWERSHARES DB CRUDE (DTO) | +14.38% | +1384.32 |
| POWERSHARES DB CRUDE (SZO) | +7.09% | +682.07 |
| POWERSHARES DB CRUDE (DXO) | -8.67% | -834.19 |
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