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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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Wednesday, December 31, 2008
Bubble, Bubble, Toil and Trouble
Well, now that 2008, the first full year of "Great Depression II," is history (finally, it seemed to last a whole decade!), we can look back on what went wrong.
It's really very simple. The Ponzi Scheme known as the "Financial System" finally hit a speed bump when the last unqualified homebuyer signed on the dotted line for their mortgage. With no more new money coming into the system to bailout the early buyers, it just had to start collapsing and dragging the system down.
The Ponzi Scheme Financial System Is Built on Bubbles
The financial system is built on a series of bubbles which have been engineered by the banks over the last three decades. As growth slowed in the 1980-2 recession, banks had a bright idea---expand credit to boost consumer spending, pushing the economy higher based upon spending at the expense of saving (we didn't say it was an original idea, it had been tried before, in the Twenties, and it led to the Great Depression). The consumer became the dominant factor in the growth of the economy, displacing manufacturing and other production from its historic role as the driver of progress. Manufacturing has been falling for the last three decades and consumption has become the biggest game in the economy and the largest factor in GDP. That process cannot continue forever despite the illusion that it can, which is why we call the financial system a Ponzi Scheme. Eventually, the savings built up over the preceding period are exhausted and cannot be used to pay investors.
As various bubble phases of the scheme collapsed periodically---the stock market bubble crashed in 1987, a recession in the early Nineties temporarily derailed the economy and the dotcom stock market bubble blew up in 2000---the banks were able to find new sources of money to keep the bubbles growing and the Ponzi Scheme going each time.
In 2000, the popping of the dotcom bubble saw the NASDAQ give back 80% of its value. Thus the 2000 stock market high represents the early warning signs that the real end of the Ponzi Scheme Financial System is in sight---NASDAQ only recovered a minor percentage of its early Naughties losses by 2007 when the second shoe fell. Banks desperately clung to their latest great bubble scheme: real estate, which was pumped to bubble heights in the middle part of the decade. Now, the problem with blowing a bubble in the real estate sector is that it's like a farmer eating his seed corn which should have been saved for the next planting. Virtually all bank loans are based upon the value of real estate as collateral. Thus, the bubble in real estate leads inevitably to a situation where the end of this bubble means a collapse in the debt structure of the economy. The popping of the real estate bubble has much more radical implications than the prior bubbles.
Keeping the Ponzi Scheme Going With An End Game Bubble
What are the banks doing now to keep the Ponzi Scheme Financial System going? Why, they're finding one last bubble, the real End Game Bubble.
But, what's left to build a bubble on? Answer---government bonds. This provides an opportunity for the banks to blow one last bubble to keep the Ponzi Scheme Financial System cycling forward, but for a limited amount of time.
Government has a very special place in the financial system---ultimately, money can only be created by government, although that right has been transferred to the banks. In absence of direct printing of money by the government, funds are borrowed from the private sector to fund public needs. Government borrows money not based upon real estate values, but based solely upon its assets, ability to tax its citizens and its reputation. Thus, with the real estate market underlying most debt now collapsing, the banks have turned to the last source of money available to support the continuing Ponzi Scheme Financial System: government debt. By forcing the government to borrow money by issuing bonds, the banks are blowing the last and most devastating bubble of all. Banks are buying bonds to drive interest rates down and keep the Ponzi Scheme alive. Like all bubbles, the bond bubble will not last. Eventually, hyperinflation will return and send interest rates soaring on government bonds. And, the consequences of this final bubble bursting are clear: the ultimate insolvency of the United States of America. When the government bond bubble blows, the credit of the USA will plunge, along with the value of the US Dollar.
So, Happy New Year. We're in the final bubble stretch of the Ponzi Scheme Financial System, the government bond bubble. Enjoy it while it lasts.
The market floated higher on the last trading day of the year in hopes of a brighter 2009:
Change From 30 Dec 2008 To 31 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +1.25% | +108.00 |
| DIAMONDS TRUST SER 1 (DIA) | +0.97% | +84.00 |
| ULTRA DOW30 PROSHRS (DDM) | +2.41% | +208.51 |
| PT ULTRSHRT DOW30 PS (DXD) | -2.28% | -197.69 |
| S&P 500 (index) | +0.85% | +74.07 |
| S& P DEP RECEIPTS (SPY) | +1.43% | +123.74 |
| ULTRA S& P500 PROSHRS (SSO) | +2.70% | +233.82 |
| PT ULTRSHRT SP500 PS (SDS) | -2.43% | -211.02 |
| NYSE Composite (index) | +1.54% | +133.08 |
| ISHARES NYSE CMP IDX (NYC) | +1.97% | +170.46 |
| S&P SmallCap 600 (index) | +2.98% | +257.89 |
| PROSH ULTRA SMALLCAP (SAA) | +5.76% | +498.93 |
| SHORT SMALLCAP600 PR (SBB) | -2.95% | -255.57 |
| ULTRASHORT SMALLCAP6 (SDD) | -6.71% | -581.23 |
| Russell 2000 (index) | +3.46% | +299.50 |
| ISHARE RUS 2000 INDX (IWM) | +2.33% | +201.76 |
| ULTRA RUSSELL2000 PR (UWM) | +5.18% | +448.76 |
| ULTRASHORT RUSSELL20 (TWM) | -5.26% | -455.96 |
| NASDAQ-100 (index) | +0.22% | +19.12 |
| POWERSHARES QQQ TR 1 (QQQQ) | +0.85% | +73.49 |
| ULTRA QQQ PROSHARES (QLD) | +1.78% | +154.21 |
| PT UTLRSHRT QQQ PS (QID) | -1.75% | -151.48 |
| S&P MidCap 400 (index) | +2.60% | +225.71 |
| ISHARE SP MC 400 INX (IJH) | +2.05% | +177.48 |
| ULTRA MC400 PROSHRS (MVV) | +3.96% | +343.27 |
| PT ULTRSHR MC400 PS (MZZ) | -4.19% | -363.26 |
| GREENHAVEN CONT IDX (GCC) | +2.81% | +243.95 |
| Amex Gold (index) | +2.49% | +215.83 |
| MKT VECT GOLD MNRS (GDX) | +2.67% | +231.16 |
| STREETTRACKS GOLD TR (GLD) | +0.72% | +62.57 |
| DB GOLD DBL SH ETN (DZZ) | -1.82% | -157.42 |
| DB GOLD DBL LG ETN (DGP) | +1.01% | +87.12 |
| Semiconductor Sector (index) | +0.43% | +37.34 |
| ULTRA SEMICONDUCTORS (USD) | +1.50% | +130.03 |
| ULTRASHORT SEMICONDU (SSG) | -1.22% | -105.54 |
| ISHARE DJ FIN SC INX (IYF) | +3.12% | +270.64 |
| ISHARES LEHMAN 20 YR (TLT) | -2.09% | -181.33 |
| ISHARESLEHMAN 7-10YR (IEF) | -1.10% | -95.71 |
| ISHARES LEH AGG FD (AGG) | +0.07% | +5.83 |
| ISHARES GS $ INVESTO (LQD) | +0.19% | +16.23 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.05% | -4.09 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +2.23% | +193.53 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +5.24% | +454.58 |
| SHORT QQQ PROSHARES (PSQ) | -1.22% | -105.53 |
| SHRT DOW30 PROSHARES (DOG) | -1.28% | -111.10 |
| SHRT S& P500 PROSHRS (SH) | -1.85% | -160.66 |
| SHRT MC400 PROSHARES (MYY) | -2.30% | -199.26 |
| SHORT SMALLCAP600 PR (SBB) | -2.95% | -255.57 |
| SHORT RUSSELL2000 PR (RWM) | -2.50% | -216.39 |
| PT UTLRSHRT QQQ PS (QID) | -1.75% | -151.48 |
| PT ULTRSHRT DOW30 PS (DXD) | -2.28% | -197.69 |
| PT ULTRSHRT SP500 PS (SDS) | -2.43% | -211.02 |
| PT ULTRSHR MC400 PS (MZZ) | -4.19% | -363.26 |
| ULTRASHORT SMALLCAP6 (SDD) | -6.71% | -581.23 |
| ULTRASHORT RUSSELL20 (TWM) | -5.26% | -455.96 |
| PST ULSHT RSL1K VALU (SJF) | -3.46% | -300.03 |
| PST ULSHT RSL1K GR (SFK) | -2.74% | -237.36 |
| PST ULSHT RSL MC VAL (SJL) | -8.62% | -746.92 |
| PST ULSHT RSL MC GR (SDK) | -3.45% | -298.91 |
| PST ULTSHT RSL2K VAL (SJH) | -6.49% | -562.67 |
| PST ULSHT RSL2K GR (SKK) | -7.23% | -626.99 |
| ULTRASHORT BASIC MAT (SMN) | -3.40% | -295.05 |
| ULTRASHORT CONSUMER (SZK) | -1.96% | -169.95 |
| ULTRASHORT CONSUMER (SCC) | -4.28% | -370.93 |
| ULTRASHORT FINANCIAL (SKF) | -7.33% | -635.55 |
| ULTRASHORT HEALTH CA (RXD) | -2.82% | -244.16 |
| ULTRASHORT INDUSTRIA (SIJ) | -5.24% | -453.99 |
| ULTRASHORT OIL & GAS (DUG) | -1.73% | -149.69 |
| ULTRASHORT REAL ESTA (SRS) | -9.70% | -841.22 |
| ULTRASHORT SEMICONDU (SSG) | -1.22% | -105.54 |
| ULTRASHORT TECHNOLOG (REW) | -1.49% | -129.27 |
| ULTRASHORT UTILITIES (SDP) | -4.03% | -349.25 |
| PROSHARES SHR MSCI E (EUM) | -1.28% | -111.05 |
| PROSHARES SHORT MSCI (EFZ) | -1.57% | -136.40 |
| PROSHARES ULTRASHORT (EFU) | -2.64% | -228.77 |
| PROSHARES UTLRASHORT (EEV) | -2.40% | -207.73 |
| PROSHARES US MSCI JP (EWV) | -2.25% | -195.18 |
| PROSHARES ULTRASHORT (FXP) | -3.81% | -330.22 |
| ULTRA QQQ PROSHARES (QLD) | +1.78% | +154.21 |
| ULTRA DOW30 PROSHRS (DDM) | +2.41% | +208.51 |
| ULTRA S& P500 PROSHRS (SSO) | +2.70% | +233.82 |
| ULTRA MC400 PROSHRS (MVV) | +3.96% | +343.27 |
| PROSH ULTRA SMALLCAP (SAA) | +5.76% | +498.93 |
| ULTRA RUSSELL2000 PR (UWM) | +5.18% | +448.76 |
| PST ULT RUS1000 VAL (UVG) | +3.83% | +332.08 |
| PST ULT RSL1000 GR (UKF) | +3.06% | +264.96 |
| PST ULT RSL MC VALU (UVU) | +5.35% | +463.76 |
| PST ULT RSL MC GR PS (UKW) | +4.31% | +373.31 |
| PST ULT RSL2000 VALU (UVT) | +7.32% | +634.65 |
| PST ULT RSL2000 GR (UKK) | +5.91% | +512.72 |
| ULTRA BASIC MATERIAL (UYM) | +4.06% | +352.27 |
| ULTRA CONSUMER GOODS (UGE) | +2.04% | +176.60 |
| ULTRA CONSUMER SERVI (UCC) | +3.83% | +332.06 |
| ULTRA FINANCIALS PRO (UYG) | +7.10% | +615.87 |
| ULTRA HEALTH CARE PR (RXL) | +1.79% | +155.01 |
| ULTRA INDUSTRIALS PR (UXI) | +4.31% | +373.53 |
| ULTRA OIL & GAS PROS (DIG) | +2.01% | +174.47 |
| ULTRA REAL ESTATE PR (URE) | +10.34% | +896.73 |
| ULTRA SEMICONDUCTORS (USD) | +1.50% | +130.03 |
| ULTRA TECHNOLOGY PRO (ROM) | +1.37% | +118.52 |
| ULTRA UTILITIES PROS (UPW) | +4.56% | +394.88 |
| Other ETFs | ||
| PWRSHRS NDQ INTERNET (PNQI) | +3.15% | +273.12 |
| POWERSHARES DB BASE (BOM) | -6.85% | -593.82 |
| POWERSHARES DB BASE (BDD) | +7.60% | +658.80 |
| POWERSHARES DB BASE (BOS) | -3.23% | -279.75 |
| POWERSHARES DB CRUDE (DTO) | -5.71% | -495.32 |
| POWERSHARES DB CRUDE (SZO) | -2.84% | -246.43 |
| POWERSHARES DB CRUDE (DXO) | +9.44% | +818.47 |
| POWERSHARES DB CRUDE (OLO) | +6.62% | +573.43 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +3.41% | +295.60 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -4.78% | -414.13 |
| Direxion Small Cap Bull 3x Shares (TNA) | +7.51% | +650.61 |
| Direxion Small Cap Bear 3x Shares (TZA) | -8.69% | -753.63 |
| Direxion Energy Bull 3x Shares (ERX) | +3.04% | +263.51 |
| Direxion Energy Bear 3x Shares (ERY) | -3.98% | -345.40 |
| Direxion Financial Bull 3x Shares (FAS) | +10.74% | +930.91 |
| Direxion Financial Bear 3x Shares (FAZ) | -8.32% | -721.25 |
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Tuesday, December 30, 2008
Lemmings Lining Up At Cliffside
One of the few economists to call this recession correctly, David Rosenberg, said that US GDP will fall 2.5% in 2009 and the recession will eventually be labled "GDII" for "Great Depression II."
Traders decided they'd be extremely bullish and bet on the upside for stocks. Apparently, the Madness of Crowds remains one of Wall Street's undying characteristics, along with Ponzi schemes and taxpayer ripoffs.
The ISEE Index, a measure of trader sentiment, closed near 200 for the second day in a row. This reading indicates that twice as many calls were being bought by traders as puts and is a loud warning siren that tells the prudent it's time to take cover because this ship is going down.
The lemmings were lined up at the cliffside Tuesday for their crack at cliff diving:
Change From 29 Dec 2008 To 30 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +2.17% | +184.46 |
| DIAMONDS TRUST SER 1 (DIA) | +2.08% | +176.85 |
| ULTRA DOW30 PROSHRS (DDM) | +4.14% | +351.37 |
| PT ULTRSHRT DOW30 PS (DXD) | -4.21% | -357.33 |
| S&P 500 (index) | +2.39% | +203.07 |
| S& P DEP RECEIPTS (SPY) | +2.37% | +201.09 |
| ULTRA S& P500 PROSHRS (SSO) | +4.03% | +341.57 |
| PT ULTRSHRT SP500 PS (SDS) | -4.49% | -381.12 |
| NYSE Composite (index) | +2.45% | +207.49 |
| ISHARES NYSE CMP IDX (NYC) | +2.65% | +224.98 |
| S&P SmallCap 600 (index) | +3.66% | +310.66 |
| PROSH ULTRA SMALLCAP (SAA) | +6.80% | +576.62 |
| SHORT SMALLCAP600 PR (SBB) | -3.38% | -286.90 |
| ULTRASHORT SMALLCAP6 (SDD) | -6.46% | -547.82 |
| Russell 2000 (index) | +3.57% | +302.48 |
| ISHARE RUS 2000 INDX (IWM) | +2.78% | +235.56 |
| ULTRA RUSSELL2000 PR (UWM) | +4.47% | +379.25 |
| ULTRASHORT RUSSELL20 (TWM) | -5.77% | -489.78 |
| NASDAQ-100 (index) | +2.61% | +221.44 |
| POWERSHARES QQQ TR 1 (QQQQ) | +2.08% | +176.20 |
| ULTRA QQQ PROSHARES (QLD) | +4.55% | +386.09 |
| PT UTLRSHRT QQQ PS (QID) | -4.33% | -367.11 |
| S&P MidCap 400 (index) | +3.39% | +287.23 |
| ISHARE SP MC 400 INX (IJH) | +3.08% | +261.04 |
| ULTRA MC400 PROSHRS (MVV) | +6.72% | +569.87 |
| PT ULTRSHR MC400 PS (MZZ) | -6.21% | -526.98 |
| GREENHAVEN CONT IDX (GCC) | +1.14% | +96.59 |
| Amex Gold (index) | -0.77% | -65.50 |
| MKT VECT GOLD MNRS (GDX) | -0.09% | -7.71 |
| STREETTRACKS GOLD TR (GLD) | -0.52% | -44.21 |
| DB GOLD DBL SH ETN (DZZ) | +1.32% | +111.99 |
| DB GOLD DBL LG ETN (DGP) | -1.38% | -116.79 |
| Semiconductor Sector (index) | +4.61% | +391.11 |
| ULTRA SEMICONDUCTORS (USD) | +8.28% | +702.07 |
| ULTRASHORT SEMICONDU (SSG) | -8.95% | -759.24 |
| ISHARE DJ FIN SC INX (IYF) | +3.98% | +337.75 |
| ISHARES LEHMAN 20 YR (TLT) | +0.95% | +80.80 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.14% | +11.94 |
| ISHARES LEH AGG FD (AGG) | +0.04% | +3.26 |
| ISHARES GS $ INVESTO (LQD) | +0.87% | +74.23 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.09% | +8.02 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.10% | +8.24 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -3.40% | -288.06 |
| SHORT QQQ PROSHARES (PSQ) | -2.43% | -206.02 |
| SHRT DOW30 PROSHARES (DOG) | -1.91% | -161.79 |
| SHRT S& P500 PROSHRS (SH) | -2.30% | -195.41 |
| SHRT MC400 PROSHARES (MYY) | -3.66% | -310.42 |
| SHORT SMALLCAP600 PR (SBB) | -3.38% | -286.90 |
| SHORT RUSSELL2000 PR (RWM) | -3.48% | -295.14 |
| PT UTLRSHRT QQQ PS (QID) | -4.33% | -367.11 |
| PT ULTRSHRT DOW30 PS (DXD) | -4.21% | -357.33 |
| PT ULTRSHRT SP500 PS (SDS) | -4.49% | -381.12 |
| PT ULTRSHR MC400 PS (MZZ) | -6.21% | -526.98 |
| ULTRASHORT SMALLCAP6 (SDD) | -6.46% | -547.82 |
| ULTRASHORT RUSSELL20 (TWM) | -5.77% | -489.78 |
| PST ULSHT RSL1K VALU (SJF) | -4.69% | -397.87 |
| PST ULSHT RSL1K GR (SFK) | -5.37% | -455.19 |
| PST ULSHT RSL MC VAL (SJL) | -3.81% | -322.84 |
| PST ULSHT RSL MC GR (SDK) | -6.91% | -586.20 |
| PST ULTSHT RSL2K VAL (SJH) | -6.78% | -575.49 |
| PST ULSHT RSL2K GR (SKK) | -6.16% | -522.63 |
| ULTRASHORT BASIC MAT (SMN) | -5.94% | -503.60 |
| ULTRASHORT CONSUMER (SZK) | -3.96% | -335.69 |
| ULTRASHORT CONSUMER (SCC) | -5.80% | -491.78 |
| ULTRASHORT FINANCIAL (SKF) | -7.12% | -603.97 |
| ULTRASHORT HEALTH CA (RXD) | -5.96% | -505.31 |
| ULTRASHORT INDUSTRIA (SIJ) | -6.26% | -530.77 |
| ULTRASHORT OIL & GAS (DUG) | -4.64% | -393.72 |
| ULTRASHORT REAL ESTA (SRS) | -8.10% | -687.21 |
| ULTRASHORT SEMICONDU (SSG) | -8.95% | -759.24 |
| ULTRASHORT TECHNOLOG (REW) | -5.11% | -433.78 |
| ULTRASHORT UTILITIES (SDP) | -3.51% | -297.40 |
| PROSHARES SHR MSCI E (EUM) | -2.53% | -214.98 |
| PROSHARES SHORT MSCI (EFZ) | -3.01% | -255.10 |
| PROSHARES ULTRASHORT (EFU) | -6.50% | -551.81 |
| PROSHARES UTLRASHORT (EEV) | -5.40% | -457.74 |
| PROSHARES US MSCI JP (EWV) | -5.47% | -463.69 |
| PROSHARES ULTRASHORT (FXP) | -3.49% | -296.31 |
| ULTRA QQQ PROSHARES (QLD) | +4.55% | +386.09 |
| ULTRA DOW30 PROSHRS (DDM) | +4.14% | +351.37 |
| ULTRA S& P500 PROSHRS (SSO) | +4.03% | +341.57 |
| ULTRA MC400 PROSHRS (MVV) | +6.72% | +569.87 |
| PROSH ULTRA SMALLCAP (SAA) | +6.80% | +576.62 |
| ULTRA RUSSELL2000 PR (UWM) | +4.47% | +379.25 |
| PST ULT RUS1000 VAL (UVG) | +6.22% | +528.02 |
| PST ULT RSL1000 GR (UKF) | +4.43% | +375.90 |
| PST ULT RSL MC VALU (UVU) | +6.25% | +529.87 |
| PST ULT RSL MC GR PS (UKW) | +6.76% | +573.63 |
| PST ULT RSL2000 VALU (UVT) | +7.69% | +652.61 |
| PST ULT RSL2000 GR (UKK) | +6.73% | +570.60 |
| ULTRA BASIC MATERIAL (UYM) | +5.51% | +467.72 |
| ULTRA CONSUMER GOODS (UGE) | +3.29% | +279.11 |
| ULTRA CONSUMER SERVI (UCC) | +6.61% | +560.73 |
| ULTRA FINANCIALS PRO (UYG) | +7.24% | +614.08 |
| ULTRA HEALTH CARE PR (RXL) | +5.11% | +433.54 |
| ULTRA INDUSTRIALS PR (UXI) | +5.17% | +438.82 |
| ULTRA OIL & GAS PROS (DIG) | +4.50% | +381.93 |
| ULTRA REAL ESTATE PR (URE) | +8.41% | +713.60 |
| ULTRA SEMICONDUCTORS (USD) | +8.28% | +702.07 |
| ULTRA TECHNOLOGY PRO (ROM) | +4.95% | +419.79 |
| ULTRA UTILITIES PROS (UPW) | +4.36% | +370.19 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | +1.83% | +155.13 |
| POWERSHARES DB BASE (BOM) | -0.30% | -25.29 |
| POWERSHARES DB BASE (BDD) | +5.04% | +427.76 |
| POWERSHARES DB BASE (BOS) | -0.30% | -25.82 |
| POWERSHARES DB CRUDE (DTO) | +1.81% | +153.93 |
| POWERSHARES DB CRUDE (SZO) | +0.40% | +33.70 |
| POWERSHARES DB CRUDE (DXO) | +1.30% | +110.66 |
| POWERSHARES DB CRUDE (OLO) | +3.30% | +280.22 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +6.64% | +563.02 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -6.61% | -560.69 |
| Direxion Small Cap Bull 3x Shares (TNA) | +9.04% | +767.29 |
| Direxion Small Cap Bear 3x Shares (TZA) | -9.57% | -811.82 |
| Direxion Energy Bull 3x Shares (ERX) | +6.26% | +531.44 |
| Direxion Energy Bear 3x Shares (ERY) | -6.33% | -537.27 |
| Direxion Financial Bull 3x Shares (FAS) | +10.79% | +915.41 |
| Direxion Financial Bear 3x Shares (FAZ) | -10.67% | -905.03 |
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Monday, December 29, 2008
Bullish Sentiment Growing Stronger
Although the stock market has lost almost half of its value in the last year or so, there is a building majority of investors who are growing more and more bullish. Sentiment surveys show that more than 80% of professional money managers are now bullish and looking forward to a big recovery in 2009. Even superbear Doug Kass is looking for a big rebound in the stock market in the first half of 2009:
The U.S. stock market rises by close to 20% in the year's first half. Housing-related stocks (title insurance, home remodeling, mortgage servicers and REITs) exhibit outsized and market-leading gains during the January-to-June interval. Heavily shorted retail and financial stocks also advance smartly. The year's first-half market rise of about 20% is surprisingly orderly throughout the six-month period, as volatility moves back down to pre-2008 levels, but rising domestic interest rates, still weak European economies and a halt to China's economic growth limit the stock market's progress in the back half of the year.
TheStreet.com's survey shows that bulls outnumber bears by 37% to 28% (neutral accounted for 35%).
Other surveys of the public show that the bulls are beginning to outnumber the bears again. The AAII Sentiment Survey, which had been solidly bearish for the past year, is now showing a tendency for bulls to dominate.
Apparently, the crowd thinks the economy is doing just fine now and the all-clear signal has been sounded. This is the kind of sentiment that points toward much more downside risk in the stock market and an economy that's going to continue careening down the hill for a long, long time to come. What's to explain the outbreak of optimism?
It's Obama, of course. The charisma of the new President is leading to great expectations. But, great expectations may be leading to great disappointment. Presidents can't really change an entrenched system that's setup to preserve the rich at the expense of the poor, no matter how persuasive the new kid on the block is. And the rich are going to fight reform tooth-and-nail. When it comes to push and shove, money talks. This is a lesson the crowd is going to learn at its expense in the New Year.
Wall Street woke up with a hangover Monday and slid lower following its obligatory (and countertrend) Santa Claus Rally:
Change From 26 Dec 2008 To 29 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.37% | -31.62 |
| DIAMONDS TRUST SER 1 (DIA) | -0.19% | -16.02 |
| ULTRA DOW30 PROSHRS (DDM) | -0.33% | -28.35 |
| PT ULTRSHRT DOW30 PS (DXD) | +0.67% | +56.93 |
| S&P 500 (index) | -0.25% | -21.37 |
| S& P DEP RECEIPTS (SPY) | -0.29% | -24.43 |
| ULTRA S& P500 PROSHRS (SSO) | -0.32% | -27.61 |
| PT ULTRSHRT SP500 PS (SDS) | +0.03% | +2.24 |
| NYSE Composite (index) | -0.06% | -5.46 |
| ISHARES NYSE CMP IDX (NYC) | -0.41% | -35.24 |
| S&P SmallCap 600 (index) | -1.87% | -159.47 |
| PROSH ULTRA SMALLCAP (SAA) | -3.66% | -311.59 |
| SHORT SMALLCAP600 PR (SBB) | +0.89% | +75.85 |
| ULTRASHORT SMALLCAP6 (SDD) | +3.25% | +276.35 |
| Russell 2000 (index) | -2.23% | -190.22 |
| ISHARE RUS 2000 INDX (IWM) | -1.54% | -130.73 |
| ULTRA RUSSELL2000 PR (UWM) | -3.15% | -268.53 |
| ULTRASHORT RUSSELL20 (TWM) | +2.93% | +249.30 |
| NASDAQ-100 (index) | -0.85% | -72.62 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.82% | -70.16 |
| ULTRA QQQ PROSHARES (QLD) | -2.55% | -216.75 |
| PT UTLRSHRT QQQ PS (QID) | +1.84% | +156.35 |
| S&P MidCap 400 (index) | -1.45% | -123.38 |
| ISHARE SP MC 400 INX (IJH) | -1.07% | -91.39 |
| ULTRA MC400 PROSHRS (MVV) | -2.39% | -203.37 |
| PT ULTRSHR MC400 PS (MZZ) | +2.09% | +178.22 |
| GREENHAVEN CONT IDX (GCC) | -1.82% | -154.68 |
| Amex Gold (index) | +3.33% | +283.69 |
| MKT VECT GOLD MNRS (GDX) | +2.42% | +205.96 |
| STREETTRACKS GOLD TR (GLD) | +0.88% | +74.61 |
| DB GOLD DBL SH ETN (DZZ) | -2.00% | -170.24 |
| DB GOLD DBL LG ETN (DGP) | +1.45% | +123.69 |
| Semiconductor Sector (index) | -0.02% | -2.11 |
| ULTRA SEMICONDUCTORS (USD) | -0.08% | -6.58 |
| ULTRASHORT SEMICONDU (SSG) | +0.58% | +49.45 |
| ISHARE DJ FIN SC INX (IYF) | -1.40% | -119.38 |
| ISHARES LEHMAN 20 YR (TLT) | -0.45% | -38.61 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.15% | -12.82 |
| ISHARES LEH AGG FD (AGG) | +0.41% | +34.50 |
| ISHARES GS $ INVESTO (LQD) | -0.11% | -9.30 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.18% | -15.07 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.81% | -68.94 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +1.95% | +166.10 |
| SHORT QQQ PROSHARES (PSQ) | +1.12% | +95.46 |
| SHRT DOW30 PROSHARES (DOG) | -0.03% | -2.40 |
| SHRT S& P500 PROSHRS (SH) | +0.44% | +37.58 |
| SHRT MC400 PROSHARES (MYY) | +1.56% | +133.24 |
| SHORT SMALLCAP600 PR (SBB) | +0.89% | +75.85 |
| SHORT RUSSELL2000 PR (RWM) | +2.38% | +202.60 |
| PT UTLRSHRT QQQ PS (QID) | +1.84% | +156.35 |
| PT ULTRSHRT DOW30 PS (DXD) | +0.67% | +56.93 |
| PT ULTRSHRT SP500 PS (SDS) | +0.03% | +2.24 |
| PT ULTRSHR MC400 PS (MZZ) | +2.09% | +178.22 |
| ULTRASHORT SMALLCAP6 (SDD) | +3.25% | +276.35 |
| ULTRASHORT RUSSELL20 (TWM) | +2.93% | +249.30 |
| PST ULSHT RSL1K VALU (SJF) | +0.37% | +31.24 |
| PST ULSHT RSL1K GR (SFK) | +1.07% | +91.37 |
| PST ULSHT RSL MC VAL (SJL) | +1.79% | +152.61 |
| PST ULSHT RSL MC GR (SDK) | +2.12% | +180.15 |
| PST ULTSHT RSL2K VAL (SJH) | +3.51% | +298.96 |
| PST ULSHT RSL2K GR (SKK) | +4.30% | +366.42 |
| ULTRASHORT BASIC MAT (SMN) | +2.39% | +203.77 |
| ULTRASHORT CONSUMER (SZK) | +1.75% | +148.82 |
| ULTRASHORT CONSUMER (SCC) | +1.64% | +139.93 |
| ULTRASHORT FINANCIAL (SKF) | +2.45% | +208.48 |
| ULTRASHORT HEALTH CA (RXD) | +2.90% | +247.23 |
| ULTRASHORT INDUSTRIA (SIJ) | +2.01% | +171.17 |
| ULTRASHORT OIL & GAS (DUG) | -3.61% | -307.20 |
| ULTRASHORT REAL ESTA (SRS) | +10.11% | +860.76 |
| ULTRASHORT SEMICONDU (SSG) | +0.58% | +49.45 |
| ULTRASHORT TECHNOLOG (REW) | +1.72% | +146.25 |
| ULTRASHORT UTILITIES (SDP) | +0.97% | +82.20 |
| PROSHARES SHR MSCI E (EUM) | +0.50% | +42.96 |
| PROSHARES SHORT MSCI (EFZ) | -0.13% | -10.66 |
| PROSHARES ULTRASHORT (EFU) | -0.26% | -21.92 |
| PROSHARES UTLRASHORT (EEV) | +0.26% | +22.51 |
| PROSHARES US MSCI JP (EWV) | -1.59% | -135.79 |
| PROSHARES ULTRASHORT (FXP) | -0.57% | -48.91 |
| ULTRA QQQ PROSHARES (QLD) | -2.55% | -216.75 |
| ULTRA DOW30 PROSHRS (DDM) | -0.33% | -28.35 |
| ULTRA S& P500 PROSHRS (SSO) | -0.32% | -27.61 |
| ULTRA MC400 PROSHRS (MVV) | -2.39% | -203.37 |
| PROSH ULTRA SMALLCAP (SAA) | -3.66% | -311.59 |
| ULTRA RUSSELL2000 PR (UWM) | -3.15% | -268.53 |
| PST ULT RUS1000 VAL (UVG) | -1.24% | -105.69 |
| PST ULT RSL1000 GR (UKF) | -0.80% | -68.41 |
| PST ULT RSL MC VALU (UVU) | -2.53% | -215.51 |
| PST ULT RSL MC GR PS (UKW) | -2.63% | -224.24 |
| PST ULT RSL2000 VALU (UVT) | -4.35% | -370.69 |
| PST ULT RSL2000 GR (UKK) | -5.20% | -442.92 |
| ULTRA BASIC MATERIAL (UYM) | -3.47% | -295.81 |
| ULTRA CONSUMER GOODS (UGE) | -1.72% | -146.35 |
| ULTRA CONSUMER SERVI (UCC) | -3.87% | -329.89 |
| ULTRA FINANCIALS PRO (UYG) | -2.60% | -221.18 |
| ULTRA HEALTH CARE PR (RXL) | -2.35% | -200.25 |
| ULTRA INDUSTRIALS PR (UXI) | -3.10% | -264.21 |
| ULTRA OIL & GAS PROS (DIG) | +3.59% | +305.99 |
| ULTRA REAL ESTATE PR (URE) | -10.68% | -909.84 |
| ULTRA SEMICONDUCTORS (USD) | -0.08% | -6.58 |
| ULTRA TECHNOLOGY PRO (ROM) | -1.56% | -132.73 |
| ULTRA UTILITIES PROS (UPW) | -1.85% | -157.85 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +0.31% | +26.57 |
| POWERSHARES DB BASE (BDD) | -4.80% | -408.75 |
| POWERSHARES DB BASE (BOS) | +0.22% | +18.55 |
| POWERSHARES DB CRUDE (DTO) | -5.10% | -434.54 |
| POWERSHARES DB CRUDE (SZO) | -3.64% | -310.25 |
| POWERSHARES DB CRUDE (DXO) | +14.43% | +1228.61 |
| POWERSHARES DB CRUDE (OLO) | +2.93% | +249.58 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -0.63% | -53.85 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +0.97% | +82.48 |
| Direxion Small Cap Bull 3x Shares (TNA) | -5.43% | -462.47 |
| Direxion Small Cap Bear 3x Shares (TZA) | +6.42% | +546.87 |
| Direxion Energy Bull 3x Shares (ERX) | +5.17% | +440.24 |
| Direxion Energy Bear 3x Shares (ERY) | -5.59% | -476.21 |
| Direxion Financial Bull 3x Shares (FAS) | -2.99% | -254.67 |
| Direxion Financial Bear 3x Shares (FAZ) | +2.98% | +253.47 |
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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Sunday, December 28, 2008
Savings Rate Soars
As the government measures it, the savings rate of US consumers has been virtually nonexistent for many years. But, in a bright note this holiday season, the savings rate is picking up. Recent turmoil in the credit markets is teaching consumers a valuable lesson in savings. When money is tight, there's nothing like having a reserve. And, consumers have been cutting back on spending, which is upping the savings rates substantially.
This is exactly what the economists have been telling consumers they must do. But, their message has been consistently drowned out by rampant consumerism, such as cheerleaders in Congress and the Administration touting consumers to "Buy! Buy! Buy!" even as the ship of the state sinks ever deeper in the water. Now, the sound of teevee commercials has been turned down, not up, as is usually the case. As the current recession transitions into Depression, this rise in the savings rate is undoubtedly going to make it impossible for the economy to show a positive growth rate in the coming year. Given the fact that the economy went into recession in December 2007, we will thus see at least the beginning of the third year of recession starting in 2009. Time measurements show that a real bottom in the bear market may not come before 2012, so it is wise for consumers to save here and build reserves. For many businesses with credit virtually cutoff for the duration, it means the end, as in, "Turn out the lights, the party's over."
The headwinds the economy are facing are hurricane strength and growing into a super-storm now. The financial crisis, which had grown inexorably into September, has seen credit markets seize up. Those markets are still frozen and only limited credit is available, a situation which is still dragging the economy lower and causing business leaders to panic and layoffs to soar around the world. Inflation, which had been out-of-control, has receded just a tiny amount, and still remains high despite sharp falls in the prices of commodities and financial markets. With the monetary authorities flooding the system with paper money backed only by public confidence (certainly a very slender thread at the moment), a return to hyerinflation is not only inevitable, but may not even have to wait for the recession to end. The economy appears to be facing a period of stagflation far worse than that last seen in the Seventies. The only growth we're still seeing is in the lies produced by the government to paper over the truth that the economy is in a state of early Depression. Nothing that government has done has been able to turn the economy and it appears that massive stimulus on the order of several trillion dollars will be needed just to keep the economy sinking at a slower rate in 2009.
The permabulls say things like, "Frequent comparisons are made between today and the Great Depression. We think those comparisons are silly." What they don't say is that today's economy is very much like the previous Great Depression, which was an inflationary Depression. So much for "silly comparisons." These permabulls missed the Crash of 2008 as they urged "investors" to keep buying into the teeth of the crisis and are now urging investors to hold on and even buy more stock "for the long term," saying that stocks have never been this undervalued in your life. Obviously, these analysts are wet behind the ears because the typical PE Ratio at the bottom of garden-variety bear markets is 10 and we're not there yet unfortunately. While we agree in part that investors should not sell right now (in our book, investors should never sell except to buy something else), traders are another animal. We haven't met any real "investors" in the last decade, in fact. Anyone still in the market must, by necessity, be a trader and use stops on every position, or risk getting killed. Remember, if you lose too much, you can't play the game, no matter how long you wait. Trading is the survivalist game. Only those with firm inside information should engage in the "investing" game.
The stock market tends to discount the end of recessions by bottoming about six months ahead of the end of them. Whether that means we might see the end of the bear market in 2009 is impossible to say, but anyone expecting a quick rebound in the stock market shouldn't be expecting a sustainable uptrend. Too much damage to the credit markets were done in the manic period from 1974 to 2007 to glue Humpty-Dumpty back together again. On the other hand, bear market rallies in the stock market tend to cover a substantial number of percentage points---even more than the initial leg up in bull markets, in fact---and traders should be attuned to the possibilities that we could have a bear market rally that recovers almost triple percentage point gains before the next leg down. The psychology of traders is still basically bullish, as evidence we present this article from the Financial Post: Look for Obama rally in first half of 2009. When the "Obama Rally" turns to the "Obama Rout," what will they say? The seeds of destruction are built on a permabull foundation. Traders buying today for a rally in 2009 are hoping for company in 2009. But, if all the buyers are buying now, there won't be any left once we get into 2009 and the sellers will have the last laugh as they hit the bull's stop loss price points and send the market waterfalling again. Remember, they haven't put the short sale uptick rule back into place. The market is a heartbeat away from crashing at any moment.
The stock market has been working through a very narrow trading range recently. That doesn't mean the bear market is over. It typically means we are building up force for a substantial move out of the range. Like a pot of water being heated to the boiling point, stresses build up in narrow ranges until we get a breakout either to the upside or the downside. The biggest question facing most traders is which direction the market is going to move. If the trading range is a sign of distribution---traders selling into the rally to latecomers thinking they are buying bargains---then we have another leg down similar to the last one. But, if the trading range is a sign of accumulation---traders buying after seeing a confirmed bear market low---then we have an explosive leg up as the remaining bears are forced to become buyers and buy back their short positions in a panic to the upside.
The Lipstick Indicator
Hemlines are one good indicator of mass social mood, but lipstick sales may be even better, according to The kiss of economic death. The "lipstick effect" can be traced back to the Great Depression of the 1930s. In the four years from 1929 to 1933 industrial production in the US halved, but sales of cosmetics rose. According to Mr Joshi, the lipstick effect shows up in stock market performance.
Santa Claus Delivers at Broad and Wall
This week's Santa Claus Rally, which some have derisively labeled a "Santa Clause Rally" (apparently in homage to a Walt Disney movie by the same misspelled name), was just about as bad as it can be and still be called an advance. But, it did see the stock market put in gains on the day before and the day after Christmas, which is essentially what that seasonal phenomenon promises us. Interestingly, the OEX traders showed excessive bullishness on a very weak rally, which is a contrary indicator and suggests the market is vulnerable here. But, does the weakness of this seasonal rally tell us something more about the state of market internally? Indeed it does, for the market may be just floating on hope as PE Ratios remain far above historical bear market lows with earnings disappointments undoubtedly directly ahead in January. Some fundamental analysts are suggesting that the SPX may have to fall 40% to reach a bottom. This market, as you can see, knows how to float:
Change From 24 Dec 2008 To 26 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.56% | +47.07 |
| DIAMONDS TRUST SER 1 (DIA) | +0.70% | +59.14 |
| ULTRA DOW30 PROSHRS (DDM) | +1.08% | +91.18 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.35% | -114.64 |
| S&P 500 (index) | +0.85% | +72.22 |
| S& P DEP RECEIPTS (SPY) | +0.58% | +48.86 |
| ULTRA S& P500 PROSHRS (SSO) | +1.11% | +93.71 |
| PT ULTRSHRT SP500 PS (SDS) | -0.94% | -79.36 |
| NYSE Composite (index) | +0.93% | +78.49 |
| ISHARES NYSE CMP IDX (NYC) | +1.20% | +101.34 |
| S&P SmallCap 600 (index) | +1.31% | +110.79 |
| PROSH ULTRA SMALLCAP (SAA) | +3.08% | +260.57 |
| SHORT SMALLCAP600 PR (SBB) | -0.80% | -67.77 |
| ULTRASHORT SMALLCAP6 (SDD) | -2.34% | -197.96 |
| Russell 2000 (index) | +1.33% | +113.04 |
| ISHARE RUS 2000 INDX (IWM) | +1.43% | +121.03 |
| ULTRA RUSSELL2000 PR (UWM) | +3.37% | +285.40 |
| ULTRASHORT RUSSELL20 (TWM) | -2.65% | -224.62 |
| NASDAQ-100 (index) | +0.10% | +8.15 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.03% | -2.91 |
| ULTRA QQQ PROSHARES (QLD) | +0.08% | +6.54 |
| PT UTLRSHRT QQQ PS (QID) | -0.27% | -22.56 |
| S&P MidCap 400 (index) | +1.32% | +111.48 |
| ISHARE SP MC 400 INX (IJH) | +1.24% | +105.40 |
| ULTRA MC400 PROSHRS (MVV) | +2.54% | +214.92 |
| PT ULTRSHR MC400 PS (MZZ) | -2.68% | -226.95 |
| GREENHAVEN CONT IDX (GCC) | +2.78% | +235.12 |
| Amex Gold (index) | +4.80% | +406.70 |
| MKT VECT GOLD MNRS (GDX) | +5.43% | +459.55 |
| STREETTRACKS GOLD TR (GLD) | +2.56% | +217.14 |
| DB GOLD DBL SH ETN (DZZ) | -5.83% | -493.92 |
| DB GOLD DBL LG ETN (DGP) | +5.23% | +443.09 |
| Semiconductor Sector (index) | -0.44% | -37.15 |
| ULTRA SEMICONDUCTORS (USD) | -0.92% | -77.81 |
| ULTRASHORT SEMICONDU (SSG) | +2.11% | +178.77 |
| ISHARE DJ FIN SC INX (IYF) | +0.42% | +35.77 |
| ISHARES LEHMAN 20 YR (TLT) | +0.33% | +28.02 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.53% | +45.29 |
| ISHARES LEH AGG FD (AGG) | -0.34% | -28.49 |
| ISHARES GS $ INVESTO (LQD) | +0.19% | +16.01 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.12% | +10.00 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.67% | -56.75 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -0.74% | -62.35 |
| SHORT QQQ PROSHARES (PSQ) | -0.17% | -14.67 |
| SHRT DOW30 PROSHARES (DOG) | -0.42% | -35.73 |
| SHRT S& P500 PROSHRS (SH) | -0.55% | -46.18 |
| SHRT MC400 PROSHARES (MYY) | -1.31% | -110.92 |
| SHORT SMALLCAP600 PR (SBB) | -0.80% | -67.77 |
| SHORT RUSSELL2000 PR (RWM) | -1.41% | -119.43 |
| PT UTLRSHRT QQQ PS (QID) | -0.27% | -22.56 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.35% | -114.64 |
| PT ULTRSHRT SP500 PS (SDS) | -0.94% | -79.36 |
| PT ULTRSHR MC400 PS (MZZ) | -2.68% | -226.95 |
| ULTRASHORT SMALLCAP6 (SDD) | -2.34% | -197.96 |
| ULTRASHORT RUSSELL20 (TWM) | -2.65% | -224.62 |
| PST ULSHT RSL1K VALU (SJF) | -2.34% | -198.34 |
| PST ULSHT RSL1K GR (SFK) | -1.25% | -106.13 |
| PST ULSHT RSL MC VAL (SJL) | -0.76% | -64.55 |
| PST ULSHT RSL MC GR (SDK) | -1.57% | -132.74 |
| PST ULTSHT RSL2K VAL (SJH) | -2.45% | -207.65 |
| PST ULSHT RSL2K GR (SKK) | -2.01% | -170.09 |
| ULTRASHORT BASIC MAT (SMN) | -4.89% | -414.37 |
| ULTRASHORT CONSUMER (SZK) | -1.55% | -131.66 |
| ULTRASHORT CONSUMER (SCC) | +0.42% | +35.86 |
| ULTRASHORT FINANCIAL (SKF) | -0.67% | -56.88 |
| ULTRASHORT HEALTH CA (RXD) | +0.93% | +78.58 |
| ULTRASHORT INDUSTRIA (SIJ) | -1.92% | -162.77 |
| ULTRASHORT OIL & GAS (DUG) | -3.68% | -311.90 |
| ULTRASHORT REAL ESTA (SRS) | -2.03% | -171.91 |
| ULTRASHORT SEMICONDU (SSG) | +2.11% | +178.77 |
| ULTRASHORT TECHNOLOG (REW) | -0.45% | -37.73 |
| ULTRASHORT UTILITIES (SDP) | -2.28% | -193.47 |
| PROSHARES SHR MSCI E (EUM) | -0.27% | -22.86 |
| PROSHARES SHORT MSCI (EFZ) | -0.91% | -77.32 |
| PROSHARES ULTRASHORT (EFU) | -0.83% | -70.05 |
| PROSHARES UTLRASHORT (EEV) | +0.41% | +34.46 |
| PROSHARES US MSCI JP (EWV) | -3.90% | -329.94 |
| PROSHARES ULTRASHORT (FXP) | -1.90% | -160.52 |
| ULTRA QQQ PROSHARES (QLD) | +0.08% | +6.54 |
| ULTRA DOW30 PROSHRS (DDM) | +1.08% | +91.18 |
| ULTRA S& P500 PROSHRS (SSO) | +1.11% | +93.71 |
| ULTRA MC400 PROSHRS (MVV) | +2.54% | +214.92 |
| PROSH ULTRA SMALLCAP (SAA) | +3.08% | +260.57 |
| ULTRA RUSSELL2000 PR (UWM) | +3.37% | +285.40 |
| PST ULT RUS1000 VAL (UVG) | +1.50% | +127.00 |
| PST ULT RSL1000 GR (UKF) | +1.68% | +142.43 |
| PST ULT RSL MC VALU (UVU) | +2.60% | +219.88 |
| PST ULT RSL MC GR PS (UKW) | +2.22% | +188.06 |
| PST ULT RSL2000 VALU (UVT) | +2.19% | +185.71 |
| PST ULT RSL2000 GR (UKK) | +3.53% | +299.12 |
| ULTRA BASIC MATERIAL (UYM) | +4.88% | +413.58 |
| ULTRA CONSUMER GOODS (UGE) | +2.72% | +230.59 |
| ULTRA CONSUMER SERVI (UCC) | +1.36% | +115.28 |
| ULTRA FINANCIALS PRO (UYG) | +0.56% | +47.40 |
| ULTRA HEALTH CARE PR (RXL) | +1.37% | +115.70 |
| ULTRA INDUSTRIALS PR (UXI) | +2.80% | +236.85 |
| ULTRA OIL & GAS PROS (DIG) | +3.89% | +329.59 |
| ULTRA REAL ESTATE PR (URE) | +2.39% | +202.66 |
| ULTRA SEMICONDUCTORS (USD) | -0.92% | -77.81 |
| ULTRA TECHNOLOGY PRO (ROM) | +0.49% | +41.45 |
| ULTRA UTILITIES PROS (UPW) | +1.96% | +165.56 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +1.00% | +84.51 |
| POWERSHARES DB BASE (BDD) | 0.00% | 0.00 |
| POWERSHARES DB BASE (BOS) | +1.24% | +104.60 |
| POWERSHARES DB CRUDE (DTO) | 0.00% | 0.00 |
| POWERSHARES DB CRUDE (SZO) | +1.38% | +116.84 |
| POWERSHARES DB CRUDE (DXO) | +1.01% | +85.11 |
| POWERSHARES DB CRUDE (OLO) | -1.27% | -107.82 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +2.09% | +177.02 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -2.02% | -170.95 |
| Direxion Small Cap Bull 3x Shares (TNA) | +3.36% | +284.65 |
| Direxion Small Cap Bear 3x Shares (TZA) | -4.82% | -408.19 |
| Direxion Energy Bull 3x Shares (ERX) | +5.16% | +436.71 |
| Direxion Energy Bear 3x Shares (ERY) | -4.85% | -410.33 |
| Direxion Financial Bull 3x Shares (FAS) | +1.18% | +100.10 |
| Direxion Financial Bear 3x Shares (FAZ) | -0.70% | -59.60 |
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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· Detailed Comments . . . .
Wednesday, December 24, 2008
Will The Sun Shine, Nellie?
Yes, indeed, that old refrain, Wait Till the Sun Shines, Nellie, echoed through the cavernous New York Stock Exchange Wednesday afternoon as it has since the early days of the Twentieth Century. The market has suffered through a historic bear market---and there's more to come. But, traders can look forward to celebrating the holidays before going back to work in what promises to be a very volatile 2009 that sees huge moves in stocks both up and down over the course of the next twelve months.
Stocks rested on Wednesday as Santa brought little for the bulls:
Change From 23 Dec 2008 To 24 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.58% | +48.99 |
| DIAMONDS TRUST SER 1 (DIA) | +0.49% | +41.06 |
| ULTRA DOW30 PROSHRS (DDM) | +0.81% | +68.54 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.03% | -86.77 |
| S&P 500 (index) | +0.58% | +48.67 |
| S& P DEP RECEIPTS (SPY) | +0.58% | +48.86 |
| ULTRA S& P500 PROSHRS (SSO) | +0.95% | +80.12 |
| PT ULTRSHRT SP500 PS (SDS) | -0.77% | -65.24 |
| NYSE Composite (index) | +0.35% | +29.33 |
| ISHARES NYSE CMP IDX (NYC) | -0.71% | -60.02 |
| S&P SmallCap 600 (index) | +0.53% | +44.49 |
| PROSH ULTRA SMALLCAP (SAA) | +0.15% | +12.55 |
| SHORT SMALLCAP600 PR (SBB) | -0.23% | -19.61 |
| ULTRASHORT SMALLCAP6 (SDD) | -1.37% | -115.51 |
| Russell 2000 (index) | +0.39% | +33.24 |
| ISHARE RUS 2000 INDX (IWM) | +0.36% | +30.64 |
| ULTRA RUSSELL2000 PR (UWM) | +1.51% | +127.50 |
| ULTRASHORT RUSSELL20 (TWM) | -1.27% | -106.72 |
| NASDAQ-100 (index) | +0.09% | +7.90 |
| POWERSHARES QQQ TR 1 (QQQQ) | +0.28% | +23.18 |
| ULTRA QQQ PROSHARES (QLD) | +0.27% | +22.81 |
| PT UTLRSHRT QQQ PS (QID) | +0.03% | +2.80 |
| S&P MidCap 400 (index) | +0.41% | +34.94 |
| ISHARE SP MC 400 INX (IJH) | -0.20% | -16.60 |
| ULTRA MC400 PROSHRS (MVV) | +1.40% | +117.83 |
| PT ULTRSHR MC400 PS (MZZ) | -0.90% | -75.39 |
| GREENHAVEN CONT IDX (GCC) | -0.67% | -56.05 |
| Amex Gold (index) | -0.17% | -14.27 |
| MKT VECT GOLD MNRS (GDX) | -0.49% | -41.08 |
| STREETTRACKS GOLD TR (GLD) | +1.00% | +84.57 |
| DB GOLD DBL SH ETN (DZZ) | -2.45% | -206.17 |
| DB GOLD DBL LG ETN (DGP) | +1.86% | +156.29 |
| Semiconductor Sector (index) | +1.01% | +84.67 |
| ULTRA SEMICONDUCTORS (USD) | +1.16% | +97.83 |
| ULTRASHORT SEMICONDU (SSG) | -2.61% | -219.77 |
| ISHARE DJ FIN SC INX (IYF) | +1.43% | +120.22 |
| ISHARES LEHMAN 20 YR (TLT) | -0.21% | -18.07 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.10% | -8.49 |
| ISHARES LEH AGG FD (AGG) | +0.47% | +39.85 |
| ISHARES GS $ INVESTO (LQD) | +0.25% | +21.00 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.02% | +1.99 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.10% | +8.07 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +0.14% | +11.50 |
| SHORT QQQ PROSHARES (PSQ) | -0.03% | -2.24 |
| SHRT DOW30 PROSHARES (DOG) | -0.64% | -54.11 |
| SHRT S& P500 PROSHRS (SH) | -0.54% | -45.66 |
| SHRT MC400 PROSHARES (MYY) | -0.45% | -38.13 |
| SHORT SMALLCAP600 PR (SBB) | -0.23% | -19.61 |
| SHORT RUSSELL2000 PR (RWM) | -0.71% | -60.15 |
| PT UTLRSHRT QQQ PS (QID) | +0.03% | +2.80 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.03% | -86.77 |
| PT ULTRSHRT SP500 PS (SDS) | -0.77% | -65.24 |
| PT ULTRSHR MC400 PS (MZZ) | -0.90% | -75.39 |
| ULTRASHORT SMALLCAP6 (SDD) | -1.37% | -115.51 |
| ULTRASHORT RUSSELL20 (TWM) | -1.27% | -106.72 |
| PST ULSHT RSL1K VALU (SJF) | -0.49% | -41.00 |
| PST ULSHT RSL1K GR (SFK) | -0.26% | -22.01 |
| PST ULSHT RSL MC VAL (SJL) | -1.42% | -119.19 |
| PST ULSHT RSL MC GR (SDK) | +0.19% | +16.41 |
| PST ULTSHT RSL2K VAL (SJH) | -0.67% | -56.14 |
| PST ULSHT RSL2K GR (SKK) | -2.05% | -172.69 |
| ULTRASHORT BASIC MAT (SMN) | +2.02% | +170.07 |
| ULTRASHORT CONSUMER (SZK) | -1.67% | -140.33 |
| ULTRASHORT CONSUMER (SCC) | -1.53% | -128.71 |
| ULTRASHORT FINANCIAL (SKF) | -2.62% | -220.30 |
| ULTRASHORT HEALTH CA (RXD) | -4.24% | -356.99 |
| ULTRASHORT INDUSTRIA (SIJ) | -1.01% | -84.89 |
| ULTRASHORT OIL & GAS (DUG) | -0.31% | -26.25 |
| ULTRASHORT REAL ESTA (SRS) | -1.13% | -95.51 |
| ULTRASHORT SEMICONDU (SSG) | -2.61% | -219.77 |
| ULTRASHORT TECHNOLOG (REW) | -0.37% | -31.31 |
| ULTRASHORT UTILITIES (SDP) | -1.02% | -85.59 |
| PROSHARES SHR MSCI E (EUM) | -0.34% | -28.83 |
| PROSHARES SHORT MSCI (EFZ) | -0.67% | -56.56 |
| PROSHARES ULTRASHORT (EFU) | -2.59% | -217.77 |
| PROSHARES UTLRASHORT (EEV) | -1.17% | -98.64 |
| PROSHARES US MSCI JP (EWV) | -0.98% | -82.29 |
| PROSHARES ULTRASHORT (FXP) | -1.34% | -112.77 |
| ULTRA QQQ PROSHARES (QLD) | +0.27% | +22.81 |
| ULTRA DOW30 PROSHRS (DDM) | +0.81% | +68.54 |
| ULTRA S& P500 PROSHRS (SSO) | +0.95% | +80.12 |
| ULTRA MC400 PROSHRS (MVV) | +1.40% | +117.83 |
| PROSH ULTRA SMALLCAP (SAA) | +0.15% | +12.55 |
| ULTRA RUSSELL2000 PR (UWM) | +1.51% | +127.50 |
| PST ULT RUS1000 VAL (UVG) | +0.42% | +35.50 |
| PST ULT RSL1000 GR (UKF) | +0.14% | +12.15 |
| PST ULT RSL MC VALU (UVU) | +1.42% | +119.85 |
| PST ULT RSL MC GR PS (UKW) | +1.02% | +85.85 |
| PST ULT RSL2000 VALU (UVT) | +1.53% | +128.54 |
| PST ULT RSL2000 GR (UKK) | +0.64% | +53.97 |
| ULTRA BASIC MATERIAL (UYM) | -0.62% | -51.89 |
| ULTRA CONSUMER GOODS (UGE) | +0.24% | +20.20 |
| ULTRA CONSUMER SERVI (UCC) | +1.43% | +120.73 |
| ULTRA FINANCIALS PRO (UYG) | +3.68% | +309.42 |
| ULTRA HEALTH CARE PR (RXL) | -0.43% | -36.55 |
| ULTRA INDUSTRIALS PR (UXI) | -0.05% | -4.13 |
| ULTRA OIL & GAS PROS (DIG) | +0.08% | +6.69 |
| ULTRA REAL ESTATE PR (URE) | +1.92% | +161.35 |
| ULTRA SEMICONDUCTORS (USD) | +1.16% | +97.83 |
| ULTRA TECHNOLOGY PRO (ROM) | +0.34% | +28.95 |
| ULTRA UTILITIES PROS (UPW) | -0.03% | -2.74 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -2.02% | -170.46 |
| PWRSHRS NDQ INTERNET (PNQI) | +0.38% | +31.77 |
| POWERSHARES DB BASE (BOM) | -0.81% | -67.99 |
| POWERSHARES DB BASE (BDD) | -1.57% | -132.59 |
| POWERSHARES DB BASE (BOS) | -0.81% | -68.15 |
| POWERSHARES DB CRUDE (DTO) | +3.03% | +254.87 |
| POWERSHARES DB CRUDE (SZO) | +1.00% | +84.33 |
| POWERSHARES DB CRUDE (DXO) | -7.44% | -626.57 |
| POWERSHARES DB CRUDE (OLO) | -2.26% | -190.49 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +1.18% | +99.51 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -1.31% | -110.16 |
| Direxion Small Cap Bull 3x Shares (TNA) | +1.57% | +132.23 |
| Direxion Small Cap Bear 3x Shares (TZA) | -1.63% | -137.41 |
| Direxion Energy Bull 3x Shares (ERX) | +0.91% | +76.54 |
| Direxion Energy Bear 3x Shares (ERY) | -0.47% | -39.88 |
| Direxion Financial Bull 3x Shares (FAS) | +3.17% | +266.96 |
| Direxion Financial Bear 3x Shares (FAZ) | -3.75% | -315.56 |
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, December 23, 2008
Madoff Conduit Hedge Fund Head Found Dead in Manhattan
The head of Access International, one of the hedge funds implicated in the Madoff Ponzi scheme in a complaint filed with the SEC in 2005, was found dead this morning in New York. Hedge funds named in the complaint were simply storefronts which funneled investor money directly to Madoff without disclosing any reference to Madoff by name. While most hedge fund managers on Wall Street had known for years that Madoff was running a Ponzi scheme, neither they nor the SEC were sufficiently motivated to actually shut the operation down. It's reasonable to assume that they were paid to look the other way while investors got taken to the poorhouse.
Whether today's death was a murder or suicide isn't known yet. Certainly, it's impossible for Madoff to have run his Ponzi scheme alone and there are several of these hedge fund "fronts" which were active. So far, no one has confessed other than Madoff himself, but there may be co-conspirators who aren't talking and may be actively suppressing others from confessing. This particular fund is the subject of a European investigation into possible criminal charges in association with the fraud.
The stock market continued to slide Tuesday (some outsized changes in the table below reflect dividend payments as those ETFs go ex-dividend):
Change From 22 Dec 2008 To 23 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -1.18% | -100.20 |
| DIAMONDS TRUST SER 1 (DIA) | -1.05% | -89.25 |
| ULTRA DOW30 PROSHRS (DDM) | -2.35% | -200.36 |
| PT ULTRSHRT DOW30 PS (DXD) | -20.38% | -1736.10 |
| S&P 500 (index) | -0.98% | -83.08 |
| S& P DEP RECEIPTS (SPY) | -1.03% | -88.07 |
| ULTRA S& P500 PROSHRS (SSO) | -1.95% | -165.90 |
| PT ULTRSHRT SP500 PS (SDS) | -11.45% | -975.32 |
| NYSE Composite (index) | -0.95% | -81.08 |
| ISHARES NYSE CMP IDX (NYC) | -1.06% | -90.14 |
| S&P SmallCap 600 (index) | -1.38% | -117.18 |
| PROSH ULTRA SMALLCAP (SAA) | -1.81% | -153.84 |
| SHORT SMALLCAP600 PR (SBB) | -34.40% | -2931.00 |
| ULTRASHORT SMALLCAP6 (SDD) | -27.42% | -2336.12 |
| Russell 2000 (index) | -1.37% | -116.93 |
| ISHARE RUS 2000 INDX (IWM) | -2.20% | -187.30 |
| ULTRA RUSSELL2000 PR (UWM) | -3.83% | -326.27 |
| ULTRASHORT RUSSELL20 (TWM) | -23.81% | -2028.20 |
| NASDAQ-100 (index) | -0.45% | -38.62 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.51% | -43.75 |
| ULTRA QQQ PROSHARES (QLD) | -1.26% | -107.43 |
| PT UTLRSHRT QQQ PS (QID) | -12.74% | -1085.70 |
| S&P MidCap 400 (index) | -0.89% | -75.58 |
| ISHARE SP MC 400 INX (IJH) | -1.38% | -117.62 |
| ULTRA MC400 PROSHRS (MVV) | -3.15% | -268.22 |
| PT ULTRSHR MC400 PS (MZZ) | -25.46% | -2168.72 |
| GREENHAVEN CONT IDX (GCC) | +0.05% | +4.05 |
| Amex Gold (index) | +2.49% | +211.79 |
| MKT VECT GOLD MNRS (GDX) | +3.05% | +259.90 |
| STREETTRACKS GOLD TR (GLD) | -0.99% | -84.73 |
| DB GOLD DBL SH ETN (DZZ) | +2.21% | +188.14 |
| DB GOLD DBL LG ETN (DGP) | -1.76% | -150.35 |
| Semiconductor Sector (index) | -2.80% | -238.70 |
| ULTRA SEMICONDUCTORS (USD) | -4.86% | -414.37 |
| ULTRASHORT SEMICONDU (SSG) | -30.79% | -2623.33 |
| ISHARE DJ FIN SC INX (IYF) | -2.91% | -248.03 |
| ISHARES LEHMAN 20 YR (TLT) | -0.13% | -11.24 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.05% | -4.29 |
| ISHARES LEH AGG FD (AGG) | +0.98% | +83.09 |
| ISHARES GS $ INVESTO (LQD) | +0.33% | +28.14 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.02% | +2.01 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.35% | +29.49 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +0.44% | +37.39 |
| SHORT QQQ PROSHARES (PSQ) | -4.67% | -398.08 |
| SHRT DOW30 PROSHARES (DOG) | -10.01% | -852.72 |
| SHRT S& P500 PROSHRS (SH) | -12.81% | -1091.61 |
| SHRT MC400 PROSHARES (MYY) | -12.93% | -1101.61 |
| SHORT SMALLCAP600 PR (SBB) | -34.40% | -2931.00 |
| SHORT RUSSELL2000 PR (RWM) | -25.32% | -2157.19 |
| PT UTLRSHRT QQQ PS (QID) | -12.74% | -1085.70 |
| PT ULTRSHRT DOW30 PS (DXD) | -20.38% | -1736.10 |
| PT ULTRSHRT SP500 PS (SDS) | -11.45% | -975.32 |
| PT ULTRSHR MC400 PS (MZZ) | -25.46% | -2168.72 |
| ULTRASHORT SMALLCAP6 (SDD) | -27.42% | -2336.12 |
| ULTRASHORT RUSSELL20 (TWM) | -23.81% | -2028.20 |
| PST ULSHT RSL1K VALU (SJF) | -5.37% | -457.15 |
| PST ULSHT RSL1K GR (SFK) | -26.66% | -2271.40 |
| PST ULSHT RSL MC VAL (SJL) | -36.35% | -3096.78 |
| PST ULSHT RSL MC GR (SDK) | -35.18% | -2997.53 |
| PST ULTSHT RSL2K VAL (SJH) | -28.71% | -2446.24 |
| PST ULSHT RSL2K GR (SKK) | -35.35% | -3011.79 |
| ULTRASHORT BASIC MAT (SMN) | -38.01% | -3238.41 |
| ULTRASHORT CONSUMER (SZK) | -17.25% | -1469.28 |
| ULTRASHORT CONSUMER (SCC) | -25.12% | -2140.15 |
| ULTRASHORT FINANCIAL (SKF) | +3.48% | +296.37 |
| ULTRASHORT HEALTH CA (RXD) | -30.10% | -2564.17 |
| ULTRASHORT INDUSTRIA (SIJ) | -43.31% | -3689.56 |
| ULTRASHORT OIL & GAS (DUG) | -16.73% | -1425.27 |
| ULTRASHORT REAL ESTA (SRS) | -6.11% | -520.70 |
| ULTRASHORT SEMICONDU (SSG) | -30.79% | -2623.33 |
| ULTRASHORT TECHNOLOG (REW) | -23.11% | -1969.23 |
| ULTRASHORT UTILITIES (SDP) | -36.39% | -3100.73 |
| PROSHARES SHR MSCI E (EUM) | -8.24% | -701.69 |
| PROSHARES SHORT MSCI (EFZ) | -15.33% | -1305.94 |
| PROSHARES ULTRASHORT (EFU) | -18.49% | -1575.16 |
| PROSHARES UTLRASHORT (EEV) | +1.15% | +97.94 |
| PROSHARES US MSCI JP (EWV) | -11.62% | -989.67 |
| PROSHARES ULTRASHORT (FXP) | +8.62% | +734.33 |
| ULTRA QQQ PROSHARES (QLD) | -1.26% | -107.43 |
| ULTRA DOW30 PROSHRS (DDM) | -2.35% | -200.36 |
| ULTRA S& P500 PROSHRS (SSO) | -1.95% | -165.90 |
| ULTRA MC400 PROSHRS (MVV) | -3.15% | -268.22 |
| PROSH ULTRA SMALLCAP (SAA) | -1.81% | -153.84 |
| ULTRA RUSSELL2000 PR (UWM) | -3.83% | -326.27 |
| PST ULT RUS1000 VAL (UVG) | -1.89% | -161.13 |
| PST ULT RSL1000 GR (UKF) | -1.09% | -93.27 |
| PST ULT RSL MC VALU (UVU) | -3.37% | -287.11 |
| PST ULT RSL MC GR PS (UKW) | -2.78% | -236.50 |
| PST ULT RSL2000 VALU (UVT) | -3.38% | -288.00 |
| PST ULT RSL2000 GR (UKK) | -1.94% | -165.53 |
| ULTRA BASIC MATERIAL (UYM) | -1.14% | -97.33 |
| ULTRA CONSUMER GOODS (UGE) | +0.97% | +82.57 |
| ULTRA CONSUMER SERVI (UCC) | -2.13% | -181.55 |
| ULTRA FINANCIALS PRO (UYG) | -4.61% | -392.97 |
| ULTRA HEALTH CARE PR (RXL) | -1.03% | -87.86 |
| ULTRA INDUSTRIALS PR (UXI) | -2.11% | -179.96 |
| ULTRA OIL & GAS PROS (DIG) | -1.26% | -107.00 |
| ULTRA REAL ESTATE PR (URE) | -2.55% | -216.97 |
| ULTRA SEMICONDUCTORS (USD) | -4.86% | -414.37 |
| ULTRA TECHNOLOGY PRO (ROM) | -1.59% | -135.89 |
| ULTRA UTILITIES PROS (UPW) | -3.28% | -279.16 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | +2.71% | +230.84 |
| PWRSHRS NDQ INTERNET (PNQI) | -0.15% | -12.84 |
| POWERSHARES DB BASE (BOM) | +3.76% | +320.06 |
| POWERSHARES DB BASE (BDD) | -3.42% | -291.55 |
| POWERSHARES DB BASE (BOS) | +1.29% | +109.49 |
| POWERSHARES DB CRUDE (DTO) | +1.69% | +143.66 |
| POWERSHARES DB CRUDE (SZO) | +1.46% | +124.22 |
| POWERSHARES DB CRUDE (DXO) | -6.52% | -555.63 |
| POWERSHARES DB CRUDE (OLO) | -2.64% | -225.19 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -3.16% | -269.45 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +2.37% | +202.29 |
| Direxion Small Cap Bull 3x Shares (TNA) | -4.90% | -417.69 |
| Direxion Small Cap Bear 3x Shares (TZA) | +5.09% | +433.75 |
| Direxion Energy Bull 3x Shares (ERX) | -2.51% | -213.51 |
| Direxion Energy Bear 3x Shares (ERY) | +1.49% | +126.58 |
| Direxion Financial Bull 3x Shares (FAS) | -5.83% | -497.01 |
| Direxion Financial Bear 3x Shares (FAZ) | +5.28% | +449.58 |
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, December 22, 2008
Government Should Insure All Loans
The government's vaunted "Hope Now" homeowner rescue plan is an abject failure, just like everything else this Adminstration has done for taxpayers, a.k.a. suckers (your $700 Billion bank bailout just disappeared down a rat hole, apparently). Loan modifications simply aren't working. Mortagees are finding that their "improved" mortgages are actually, in many cases, requiring higher payments than the ones they couldn't pay before! Of course, those who are losing their jobs (a million households fall in that category since June) certainly don't have the money to pay exhorbitant payments after buying other necessities which have been hyperinflated in price over the last eight years. And, those who are underwater on their mortgages (i.e., their loan-to-value ratios are greater than 100%) certainly have no incentive whatsoever to continue paying on them.
Clearly, everything the government has done to fix the banking/economic system has failed. It's time to admit that the system as it stands today is simply broken and will never be made to work again. It's time to fix the economic system once and for all, rather than constantly sticking fingers in the dike---the holes are popping out faster than fingers can fill them. "Stimulus programs" simply delay the inevitable, so what the Obama Administration is talking about is simply more of the same blunders that we have had to endure under the disasterous Bush Administration. The numbers they are talking about are just a drop in the bucket compared to the size of the problem. Any stimulus program in the trillion-dollar range is just insufficient to turn the economy up.
One of the biggest problems in the last Depression was that when banks failed, depositors lost their money. The solution to that problem was for the government to guarantee depositors that they wouldn't lose their money even if the bank itself failed. This virtually eliminated the systemic problem caused by depositors rushing to the bank to withdraw their deposits after rumors, usually false, circulated that the bank was insolvent. Truly insolvent banks today are simply given taxpayer money and continue to operate, or they are sold to a competitor and the depositor sees a seamless transition to a new name.
The big problem today is that creditors are unwilling to lend due to fear that they won't be paid back. That's why they're hoarding the trillions of dollars the government has given them. The solution is clear: the government must guarantee creditors that they will not lose money if the debtor fails to pay back the loan. Thus, it's time to admit that when you have an economic system that's built on debt creation (which is what those dollar bills represent---debt, not equity), the government must be the ultimate backstop for the entire system, not just for bank depositors.
Otherwise, the entire system is going to fail. That's what's happening now---the entire economic system is simply going down the drain as new credit creation is non-existent. It will be a lot simpler and cheaper in the long run for the government to simply offer a guarantee that all loans will be repaid. The FDIC's role can be expanded to insure not only bank deposits, but all loans. Once banks become confident that all of their loans will ultimately be repaid, they will start loaning money and get the economy expanding again.
If this change doesn't happen, this Depression is going to be deeper and last much longer than the last one. Since there doesn't seem to be much of a push to get this done right now (all the talk is of "stimulus this" or "stimulus that"), expect that the recession will continue deepening into Depression until the government figures it out and finally takes action.
The stock market declined Monday as it started digesting last week's gains:
Change From 19 Dec 2008 To 22 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.69% | -59.42 |
| DIAMONDS TRUST SER 1 (DIA) | -0.47% | -40.20 |
| ULTRA DOW30 PROSHRS (DDM) | -1.18% | -101.10 |
| PT ULTRSHRT DOW30 PS (DXD) | +0.86% | +73.37 |
| S&P 500 (index) | -1.52% | -130.15 |
| S& P DEP RECEIPTS (SPY) | -1.28% | -109.93 |
| ULTRA S& P500 PROSHRS (SSO) | -3.22% | -276.20 |
| PT ULTRSHRT SP500 PS (SDS) | +2.39% | +204.93 |
| NYSE Composite (index) | -1.70% | -145.59 |
| ISHARES NYSE CMP IDX (NYC) | -1.28% | -109.52 |
| S&P SmallCap 600 (index) | -2.05% | -175.52 |
| PROSH ULTRA SMALLCAP (SAA) | -4.52% | -387.78 |
| SHORT SMALLCAP600 PR (SBB) | +1.83% | +157.28 |
| ULTRASHORT SMALLCAP6 (SDD) | +3.77% | +323.53 |
| Russell 2000 (index) | -2.30% | -197.43 |
| ISHARE RUS 2000 INDX (IWM) | -1.93% | -165.59 |
| ULTRA RUSSELL2000 PR (UWM) | -3.84% | -329.28 |
| ULTRASHORT RUSSELL20 (TWM) | +3.54% | +303.57 |
| NASDAQ-100 (index) | -1.55% | -132.70 |
| POWERSHARES QQQ TR 1 (QQQQ) | -2.18% | -186.75 |
| ULTRA QQQ PROSHARES (QLD) | -3.89% | -333.96 |
| PT UTLRSHRT QQQ PS (QID) | +3.97% | +340.88 |
| S&P MidCap 400 (index) | -2.44% | -208.99 |
| ISHARE SP MC 400 INX (IJH) | -1.72% | -147.55 |
| ULTRA MC400 PROSHRS (MVV) | -3.71% | -317.88 |
| PT ULTRSHR MC400 PS (MZZ) | +3.91% | +335.86 |
| GREENHAVEN CONT IDX (GCC) | +0.48% | +41.01 |
| Amex Gold (index) | -0.97% | -83.10 |
| MKT VECT GOLD MNRS (GDX) | -2.45% | -210.41 |
| STREETTRACKS GOLD TR (GLD) | +1.00% | +86.18 |
| DB GOLD DBL SH ETN (DZZ) | -2.58% | -221.48 |
| DB GOLD DBL LG ETN (DGP) | +2.29% | +196.15 |
| Semiconductor Sector (index) | -2.45% | -209.78 |
| ULTRA SEMICONDUCTORS (USD) | -4.84% | -415.12 |
| ULTRASHORT SEMICONDU (SSG) | +4.98% | +427.66 |
| ISHARE DJ FIN SC INX (IYF) | -3.26% | -279.96 |
| ISHARES LEHMAN 20 YR (TLT) | -0.77% | -65.96 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.26% | -22.41 |
| ISHARES LEH AGG FD (AGG) | +0.54% | +46.27 |
| ISHARES GS $ INVESTO (LQD) | +1.21% | +103.40 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.19% | -16.19 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.17% | +14.87 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +1.28% | +109.62 |
| SHORT QQQ PROSHARES (PSQ) | +1.90% | +163.17 |
| SHRT DOW30 PROSHARES (DOG) | +0.38% | +32.48 |
| SHRT S& P500 PROSHRS (SH) | +1.32% | +113.28 |
| SHRT MC400 PROSHARES (MYY) | +2.34% | +200.39 |
| SHORT SMALLCAP600 PR (SBB) | +1.83% | +157.28 |
| SHORT RUSSELL2000 PR (RWM) | +2.10% | +180.39 |
| PT UTLRSHRT QQQ PS (QID) | +3.97% | +340.88 |
| PT ULTRSHRT DOW30 PS (DXD) | +0.86% | +73.37 |
| PT ULTRSHRT SP500 PS (SDS) | +2.39% | +204.93 |
| PT ULTRSHR MC400 PS (MZZ) | +3.91% | +335.86 |
| ULTRASHORT SMALLCAP6 (SDD) | +3.77% | +323.53 |
| ULTRASHORT RUSSELL20 (TWM) | +3.54% | +303.57 |
| PST ULSHT RSL1K VALU (SJF) | +3.62% | +310.94 |
| PST ULSHT RSL1K GR (SFK) | +3.66% | +314.26 |
| PST ULSHT RSL MC VAL (SJL) | +7.56% | +648.57 |
| PST ULSHT RSL MC GR (SDK) | +5.15% | +441.72 |
| PST ULTSHT RSL2K VAL (SJH) | +6.80% | +583.02 |
| PST ULSHT RSL2K GR (SKK) | +4.81% | +412.86 |
| ULTRASHORT BASIC MAT (SMN) | +8.89% | +762.32 |
| ULTRASHORT CONSUMER (SZK) | +0.70% | +60.02 |
| ULTRASHORT CONSUMER (SCC) | +4.51% | +386.86 |
| ULTRASHORT FINANCIAL (SKF) | +5.72% | +490.35 |
| ULTRASHORT HEALTH CA (RXD) | +1.83% | +157.07 |
| ULTRASHORT INDUSTRIA (SIJ) | +4.07% | +349.03 |
| ULTRASHORT OIL & GAS (DUG) | +6.09% | +522.41 |
| ULTRASHORT REAL ESTA (SRS) | +3.86% | +331.43 |
| ULTRASHORT SEMICONDU (SSG) | +4.98% | +427.66 |
| ULTRASHORT TECHNOLOG (REW) | +4.09% | +350.87 |
| ULTRASHORT UTILITIES (SDP) | +1.61% | +138.04 |
| PROSHARES SHR MSCI E (EUM) | +3.94% | +338.20 |
| PROSHARES SHORT MSCI (EFZ) | +0.76% | +65.56 |
| PROSHARES ULTRASHORT (EFU) | +1.36% | +116.34 |
| PROSHARES UTLRASHORT (EEV) | +7.98% | +684.89 |
| PROSHARES US MSCI JP (EWV) | +1.83% | +156.89 |
| PROSHARES ULTRASHORT (FXP) | +9.83% | +843.17 |
| ULTRA QQQ PROSHARES (QLD) | -3.89% | -333.96 |
| ULTRA DOW30 PROSHRS (DDM) | -1.18% | -101.10 |
| ULTRA S& P500 PROSHRS (SSO) | -3.22% | -276.20 |
| ULTRA MC400 PROSHRS (MVV) | -3.71% | -317.88 |
| PROSH ULTRA SMALLCAP (SAA) | -4.52% | -387.78 |
| ULTRA RUSSELL2000 PR (UWM) | -3.84% | -329.28 |
| PST ULT RUS1000 VAL (UVG) | -3.97% | -340.83 |
| PST ULT RSL1000 GR (UKF) | -4.15% | -356.16 |
| PST ULT RSL MC VALU (UVU) | -4.53% | -388.68 |
| PST ULT RSL MC GR PS (UKW) | -4.84% | -415.47 |
| PST ULT RSL2000 VALU (UVT) | -2.98% | -255.79 |
| PST ULT RSL2000 GR (UKK) | -6.02% | -516.04 |
| ULTRA BASIC MATERIAL (UYM) | -8.18% | -701.93 |
| ULTRA CONSUMER GOODS (UGE) | -5.41% | -464.47 |
| ULTRA CONSUMER SERVI (UCC) | -5.50% | -471.94 |
| ULTRA FINANCIALS PRO (UYG) | -6.55% | -562.08 |
| ULTRA HEALTH CARE PR (RXL) | -1.58% | -135.45 |
| ULTRA INDUSTRIALS PR (UXI) | -2.89% | -247.97 |
| ULTRA OIL & GAS PROS (DIG) | -5.38% | -461.93 |
| ULTRA REAL ESTATE PR (URE) | -4.54% | -389.33 |
| ULTRA SEMICONDUCTORS (USD) | -4.84% | -415.12 |
| ULTRA TECHNOLOGY PRO (ROM) | -4.96% | -425.61 |
| ULTRA UTILITIES PROS (UPW) | -0.69% | -59.06 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -0.81% | -69.71 |
| PWRSHRS NDQ INTERNET (PNQI) | -4.74% | -406.48 |
| POWERSHARES DB BASE (BOM) | -2.70% | -231.26 |
| POWERSHARES DB BASE (BDD) | +7.35% | +630.30 |
| POWERSHARES DB BASE (BOS) | +3.49% | +299.02 |
| POWERSHARES DB CRUDE (DTO) | +7.60% | +652.18 |
| POWERSHARES DB CRUDE (SZO) | +5.27% | +452.23 |
| POWERSHARES DB CRUDE (DXO) | -9.09% | -779.92 |
| POWERSHARES DB CRUDE (OLO) | -4.92% | -422.22 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -4.57% | -392.09 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +5.12% | +439.25 |
| Direxion Small Cap Bull 3x Shares (TNA) | -6.67% | -571.94 |
| Direxion Small Cap Bear 3x Shares (TZA) | +6.97% | +598.12 |
| Direxion Energy Bull 3x Shares (ERX) | -7.02% | -602.17 |
| Direxion Energy Bear 3x Shares (ERY) | +7.29% | +625.43 |
| Direxion Financial Bull 3x Shares (FAS) | -7.75% | -665.24 |
| Direxion Financial Bear 3x Shares (FAZ) | +9.61% | +824.83 |
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).
Sunday, December 21, 2008
Market Quiet As Quarterly Expiration Brings No Surprises
As 2008 winds to a close, we can look back, thankfully, on the last year of this disasterous Bush Administration, a final year of total lies from our public servants. While the economy was in recession and crumbling into Depression all year long, government told us that the unemployment rate was only half of its real rate. Government told us that inflation was under control when it was, in reality, well out of control as it pushed up to 17% by midyear. In fact, you can fool most of the people most of the time it seems and the Bush Administration proves how blatant government can lie and the people will simply roll over and accept it rather than doing something about it, such as demonstrating in the streets and demanding the politicians' heads. It has truly become a nation of mindless sheep.
We had a year where the bankers and their fellow travelers in government stole $8 Trillion from the taxpayers of this country and no one was arrested for theft. There is no criminal prosecutor anywhere in this once-great land filing criminal charges against any federal government officials in this crime. We have come full circle in America and this country resembles nothing less than Hitler's Germany right before World War II. It's a country not of patriots, but of "Good Germans." Every citizen of this country should be totally ashamed of what we have become under Bush.
When the history of America is written, the Bush Administration will undoubtedly go down as the worst (and, possibly, next to last) one of all time. The country may have suffered a mortal wound from Bush.
Friday's Quad Witching options and futures expiration turned out to be a day of lower volatility and a virtually-unchanged close for the week:
Change From 18 Dec 2008 To 19 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.30% | -25.88 |
| DIAMONDS TRUST SER 1 (DIA) | -1.16% | -99.64 |
| ULTRA DOW30 PROSHRS (DDM) | -1.39% | -119.44 |
| PT ULTRSHRT DOW30 PS (DXD) | +1.63% | +139.92 |
| S&P 500 (index) | +0.07% | +6.32 |
| S& P DEP RECEIPTS (SPY) | -1.23% | -106.01 |
| ULTRA S& P500 PROSHRS (SSO) | -0.70% | -60.39 |
| PT ULTRSHRT SP500 PS (SDS) | +0.89% | +76.24 |
| NYSE Composite (index) | -0.03% | -2.51 |
| ISHARES NYSE CMP IDX (NYC) | -0.48% | -41.41 |
| S&P SmallCap 600 (index) | +1.61% | +138.61 |
| PROSH ULTRA SMALLCAP (SAA) | +3.37% | +290.15 |
| SHORT SMALLCAP600 PR (SBB) | -0.61% | -52.27 |
| ULTRASHORT SMALLCAP6 (SDD) | -2.86% | -245.78 |
| Russell 2000 (index) | +1.48% | +127.32 |
| ISHARE RUS 2000 INDX (IWM) | +0.50% | +42.62 |
| ULTRA RUSSELL2000 PR (UWM) | +1.37% | +117.63 |
| ULTRASHORT RUSSELL20 (TWM) | -1.42% | -122.12 |
| NASDAQ-100 (index) | +0.78% | +67.43 |
| POWERSHARES QQQ TR 1 (QQQQ) | +0.67% | +58.02 |
| ULTRA QQQ PROSHARES (QLD) | +1.11% | +95.86 |
| PT UTLRSHRT QQQ PS (QID) | -1.39% | -119.23 |
| S&P MidCap 400 (index) | +0.68% | +58.76 |
| ISHARE SP MC 400 INX (IJH) | -0.17% | -14.77 |
| ULTRA MC400 PROSHRS (MVV) | +0.55% | +47.36 |
| PT ULTRSHR MC400 PS (MZZ) | -0.16% | -14.14 |
| GREENHAVEN CONT IDX (GCC) | -1.74% | -149.55 |
| Amex Gold (index) | +1.40% | +120.10 |
| MKT VECT GOLD MNRS (GDX) | +2.48% | +213.39 |
| STREETTRACKS GOLD TR (GLD) | -1.48% | -127.22 |
| DB GOLD DBL SH ETN (DZZ) | +4.22% | +363.36 |
| DB GOLD DBL LG ETN (DGP) | -3.54% | -304.64 |
| Semiconductor Sector (index) | +1.38% | +119.02 |
| ULTRA SEMICONDUCTORS (USD) | +3.41% | +293.28 |
| ULTRASHORT SEMICONDU (SSG) | -2.56% | -220.24 |
| ISHARE DJ FIN SC INX (IYF) | +0.36% | +30.88 |
| ISHARES LEHMAN 20 YR (TLT) | +0.11% | +9.16 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.33% | -28.44 |
| ISHARES LEH AGG FD (AGG) | -0.32% | -27.75 |
| ISHARES GS $ INVESTO (LQD) | -1.49% | -127.93 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.09% | -8.11 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +1.19% | +102.32 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -0.17% | -14.32 |
| SHORT QQQ PROSHARES (PSQ) | -0.82% | -70.67 |
| SHRT DOW30 PROSHARES (DOG) | +0.75% | +64.56 |
| SHRT S& P500 PROSHRS (SH) | +0.13% | +11.07 |
| SHRT MC400 PROSHARES (MYY) | +0.02% | +2.10 |
| SHORT SMALLCAP600 PR (SBB) | -0.61% | -52.27 |
| SHORT RUSSELL2000 PR (RWM) | -0.76% | -65.13 |
| PT UTLRSHRT QQQ PS (QID) | -1.39% | -119.23 |
| PT ULTRSHRT DOW30 PS (DXD) | +1.63% | +139.92 |
| PT ULTRSHRT SP500 PS (SDS) | +0.89% | +76.24 |
| PT ULTRSHR MC400 PS (MZZ) | -0.16% | -14.14 |
| ULTRASHORT SMALLCAP6 (SDD) | -2.86% | -245.78 |
| ULTRASHORT RUSSELL20 (TWM) | -1.42% | -122.12 |
| PST ULSHT RSL1K VALU (SJF) | -1.80% | -154.93 |
| PST ULSHT RSL1K GR (SFK) | -1.07% | -91.93 |
| PST ULSHT RSL MC VAL (SJL) | -0.92% | -78.82 |
| PST ULSHT RSL MC GR (SDK) | -0.65% | -56.11 |
| PST ULTSHT RSL2K VAL (SJH) | -4.71% | -405.19 |
| PST ULSHT RSL2K GR (SKK) | -1.36% | -117.16 |
| ULTRASHORT BASIC MAT (SMN) | +0.82% | +70.70 |
| ULTRASHORT CONSUMER (SZK) | +0.79% | +67.93 |
| ULTRASHORT CONSUMER (SCC) | +0.51% | +44.14 |
| ULTRASHORT FINANCIAL (SKF) | -0.58% | -49.60 |
| ULTRASHORT HEALTH CA (RXD) | -1.83% | -157.48 |
| ULTRASHORT INDUSTRIA (SIJ) | -2.37% | -203.94 |
| ULTRASHORT OIL & GAS (DUG) | -0.76% | -65.33 |
| ULTRASHORT REAL ESTA (SRS) | -10.63% | -914.81 |
| ULTRASHORT SEMICONDU (SSG) | -2.56% | -220.24 |
| ULTRASHORT TECHNOLOG (REW) | -2.11% | -181.16 |
| ULTRASHORT UTILITIES (SDP) | -0.44% | -37.91 |
| PROSHARES SHR MSCI E (EUM) | -0.13% | -11.03 |
| PROSHARES SHORT MSCI (EFZ) | +1.14% | +98.10 |
| PROSHARES ULTRASHORT (EFU) | +2.27% | +195.29 |
| PROSHARES UTLRASHORT (EEV) | -0.13% | -11.49 |
| PROSHARES US MSCI JP (EWV) | -0.18% | -15.91 |
| PROSHARES ULTRASHORT (FXP) | -1.28% | -110.12 |
| ULTRA QQQ PROSHARES (QLD) | +1.11% | +95.86 |
| ULTRA DOW30 PROSHRS (DDM) | -1.39% | -119.44 |
| ULTRA S& P500 PROSHRS (SSO) | -0.70% | -60.39 |
| ULTRA MC400 PROSHRS (MVV) | +0.55% | +47.36 |
| PROSH ULTRA SMALLCAP (SAA) | +3.37% | +290.15 |
| ULTRA RUSSELL2000 PR (UWM) | +1.37% | +117.63 |
| PST ULT RUS1000 VAL (UVG) | +0.40% | +34.32 |
| PST ULT RSL1000 GR (UKF) | +0.41% | +35.48 |
| PST ULT RSL MC VALU (UVU) | +1.06% | +91.36 |
| PST ULT RSL MC GR PS (UKW) | +0.70% | +59.95 |
| PST ULT RSL2000 VALU (UVT) | +1.57% | +135.51 |
| PST ULT RSL2000 GR (UKK) | +3.10% | +266.82 |
| ULTRA BASIC MATERIAL (UYM) | -1.31% | -112.83 |
| ULTRA CONSUMER GOODS (UGE) | +0.63% | +54.57 |
| ULTRA CONSUMER SERVI (UCC) | +0.30% | +25.43 |
| ULTRA FINANCIALS PRO (UYG) | +0.87% | +74.83 |
| ULTRA HEALTH CARE PR (RXL) | +1.75% | +150.58 |
| ULTRA INDUSTRIALS PR (UXI) | +1.51% | +130.32 |
| ULTRA OIL & GAS PROS (DIG) | -0.77% | -66.58 |
| ULTRA REAL ESTATE PR (URE) | +10.18% | +875.87 |
| ULTRA SEMICONDUCTORS (USD) | +3.41% | +293.28 |
| ULTRA TECHNOLOGY PRO (ROM) | +2.69% | +231.36 |
| ULTRA UTILITIES PROS (UPW) | +0.16% | +13.48 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | +0.13% | +10.77 |
| POWERSHARES DB BASE (BOM) | -5.25% | -451.37 |
| POWERSHARES DB BASE (BDD) | +6.06% | +521.51 |
| POWERSHARES DB BASE (BOS) | -6.38% | -548.67 |
| POWERSHARES DB CRUDE (DTO) | -1.29% | -111.10 |
| POWERSHARES DB CRUDE (SZO) | -1.56% | -133.96 |
| POWERSHARES DB CRUDE (DXO) | -5.60% | -481.62 |
| POWERSHARES DB CRUDE (OLO) | -0.42% | -35.89 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -0.20% | -17.28 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -0.27% | -23.34 |
| Direxion Small Cap Bull 3x Shares (TNA) | +2.26% | +194.66 |
| Direxion Small Cap Bear 3x Shares (TZA) | -3.90% | -335.38 |
| Direxion Energy Bull 3x Shares (ERX) | -0.03% | -2.45 |
| Direxion Energy Bear 3x Shares (ERY) | +1.33% | +114.46 |
| Direxion Financial Bull 3x Shares (FAS) | -0.72% | -61.54 |
| Direxion Financial Bear 3x Shares (FAZ) | -1.99% | -171.40 |
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, December 18, 2008
Keeping All Eggs in One Basket
The Madoff Ponzi scheme is the latest tragedy for those investors who placed most of their life savings into his care. It's strange to think that anyone would concentrate all of their eggs in one basket. If there's one lesson every investor should learn, it's that putting all of your eggs in one basket is an invitation for disaster.
The larger lesson is that if you have all of your savings in dollar-denominated assets, you essentially are at risk as well. When the monetary authorities are flooding the market with paper money, it's important to diversify some percentage of your holdings out of dollars, which could be Gold, Silver and/or stronger foreign currencies. When hyperinflation takes hold in US paper money, you'll be currency-diversified, especially if a percentage is in Gold or Silver.
You can't depend upon government to protect you. In recent years, we've learned that government is owned by lobbyists and banks. Maybe that will change under the new Administration. But, you can never be 100% sure and it's up to you to protect yourself and not depend upon the government.
The stock market pulled back as the continuing absence of an uptick rules continues to favor sellers over buyers:
Change From 17 Dec 2008 To 18 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -2.49% | -219.35 |
| DIAMONDS TRUST SER 1 (DIA) | -2.25% | -198.76 |
| ULTRA DOW30 PROSHRS (DDM) | -4.68% | -412.71 |
| PT ULTRSHRT DOW30 PS (DXD) | +4.39% | +387.37 |
| S&P 500 (index) | -1.48% | -130.64 |
| S& P DEP RECEIPTS (SPY) | -1.87% | -164.87 |
| ULTRA S& P500 PROSHRS (SSO) | -3.72% | -327.93 |
| PT ULTRSHRT SP500 PS (SDS) | +3.67% | +324.23 |
| NYSE Composite (index) | -2.64% | -232.53 |
| ISHARES NYSE CMP IDX (NYC) | -2.44% | -215.43 |
| S&P SmallCap 600 (index) | -1.77% | -156.53 |
| PROSH ULTRA SMALLCAP (SAA) | -4.11% | -362.76 |
| SHORT SMALLCAP600 PR (SBB) | +0.93% | +81.63 |
| ULTRASHORT SMALLCAP6 (SDD) | +3.40% | +300.28 |
| Russell 2000 (index) | -1.51% | -133.66 |
| ISHARE RUS 2000 INDX (IWM) | -0.64% | -56.09 |
| ULTRA RUSSELL2000 PR (UWM) | -2.06% | -181.76 |
| ULTRASHORT RUSSELL20 (TWM) | +1.74% | +153.67 |
| NASDAQ-100 (index) | -0.78% | -69.03 |
| POWERSHARES QQQ TR 1 (QQQQ) | -1.76% | -154.92 |
| ULTRA QQQ PROSHARES (QLD) | -3.23% | -285.37 |
| PT UTLRSHRT QQQ PS (QID) | +3.10% | +273.81 |
| S&P MidCap 400 (index) | -1.84% | -162.62 |
| ISHARE SP MC 400 INX (IJH) | -1.41% | -124.47 |
| ULTRA MC400 PROSHRS (MVV) | -3.63% | -320.43 |
| PT ULTRSHR MC400 PS (MZZ) | +3.26% | +287.69 |
| GREENHAVEN CONT IDX (GCC) | -0.79% | -69.90 |
| Amex Gold (index) | -6.72% | -593.20 |
| MKT VECT GOLD MNRS (GDX) | -7.07% | -623.83 |
| STREETTRACKS GOLD TR (GLD) | -1.83% | -161.14 |
| DB GOLD DBL SH ETN (DZZ) | +3.80% | +335.45 |
| DB GOLD DBL LG ETN (DGP) | -3.09% | -272.97 |
| Semiconductor Sector (index) | -5.52% | -487.18 |
| ULTRA SEMICONDUCTORS (USD) | -12.83% | -1132.33 |
| ULTRASHORT SEMICONDU (SSG) | +11.62% | +1025.32 |
| ISHARE DJ FIN SC INX (IYF) | -2.62% | -231.31 |
| ISHARES LEHMAN 20 YR (TLT) | +2.10% | +185.16 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.68% | +59.61 |
| ISHARES LEH AGG FD (AGG) | +0.63% | +55.55 |
| ISHARES GS $ INVESTO (LQD) | +2.42% | +213.73 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.05% | +4.16 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.52% | -133.83 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -2.88% | -254.30 |
| SHORT QQQ PROSHARES (PSQ) | +1.71% | +150.87 |
| SHRT DOW30 PROSHARES (DOG) | +2.30% | +203.19 |
| SHRT S& P500 PROSHRS (SH) | +2.09% | +184.46 |
| SHRT MC400 PROSHARES (MYY) | +1.40% | +123.68 |
| SHORT SMALLCAP600 PR (SBB) | +0.93% | +81.63 |
| SHORT RUSSELL2000 PR (RWM) | +1.09% | +96.45 |
| PT UTLRSHRT QQQ PS (QID) | +3.10% | +273.81 |
| PT ULTRSHRT DOW30 PS (DXD) | +4.39% | +387.37 |
| PT ULTRSHRT SP500 PS (SDS) | +3.67% | +324.23 |
| PT ULTRSHR MC400 PS (MZZ) | +3.26% | +287.69 |
| ULTRASHORT SMALLCAP6 (SDD) | +3.40% | +300.28 |
| ULTRASHORT RUSSELL20 (TWM) | +1.74% | +153.67 |
| PST ULSHT RSL1K VALU (SJF) | +9.13% | +805.66 |
| PST ULSHT RSL1K GR (SFK) | +4.55% | +401.36 |
| PST ULSHT RSL MC VAL (SJL) | +2.99% | +263.84 |
| PST ULSHT RSL MC GR (SDK) | +6.09% | +537.76 |
| PST ULTSHT RSL2K VAL (SJH) | +3.16% | +278.57 |
| PST ULSHT RSL2K GR (SKK) | +2.31% | +203.75 |
| ULTRASHORT BASIC MAT (SMN) | +9.76% | +861.62 |
| ULTRASHORT CONSUMER (SZK) | +1.10% | +96.71 |
| ULTRASHORT CONSUMER (SCC) | +1.90% | +167.87 |
| ULTRASHORT FINANCIAL (SKF) | +5.28% | +466.02 |
| ULTRASHORT HEALTH CA (RXD) | -0.78% | -68.67 |
| ULTRASHORT INDUSTRIA (SIJ) | +5.54% | +488.54 |
| ULTRASHORT OIL & GAS (DUG) | +12.12% | +1069.62 |
| ULTRASHORT REAL ESTA (SRS) | +14.97% | +1320.80 |
| ULTRASHORT SEMICONDU (SSG) | +11.62% | +1025.32 |
| ULTRASHORT TECHNOLOG (REW) | +5.77% | +508.76 |
| ULTRASHORT UTILITIES (SDP) | -0.56% | -49.20 |
| PROSHARES SHR MSCI E (EUM) | +2.29% | +201.87 |
| PROSHARES SHORT MSCI (EFZ) | +4.19% | +369.49 |
| PROSHARES ULTRASHORT (EFU) | +6.73% | +593.73 |
| PROSHARES UTLRASHORT (EEV) | +3.31% | +292.12 |
| PROSHARES US MSCI JP (EWV) | +7.16% | +631.40 |
| PROSHARES ULTRASHORT (FXP) | +1.91% | +168.62 |
| ULTRA QQQ PROSHARES (QLD) | -3.23% | -285.37 |
| ULTRA DOW30 PROSHRS (DDM) | -4.68% | -412.71 |
| ULTRA S& P500 PROSHRS (SSO) | -3.72% | -327.93 |
| ULTRA MC400 PROSHRS (MVV) | -3.63% | -320.43 |
| PROSH ULTRA SMALLCAP (SAA) | -4.11% | -362.76 |
| ULTRA RUSSELL2000 PR (UWM) | -2.06% | -181.76 |
| PST ULT RUS1000 VAL (UVG) | -5.39% | -475.71 |
| PST ULT RSL1000 GR (UKF) | -4.30% | -379.13 |
| PST ULT RSL MC VALU (UVU) | -3.95% | -348.70 |
| PST ULT RSL MC GR PS (UKW) | -5.90% | -520.63 |
| PST ULT RSL2000 VALU (UVT) | -2.94% | -259.39 |
| PST ULT RSL2000 GR (UKK) | -3.37% | -297.45 |
| ULTRA BASIC MATERIAL (UYM) | -10.22% | -902.12 |
| ULTRA CONSUMER GOODS (UGE) | -1.28% | -113.00 |
| ULTRA CONSUMER SERVI (UCC) | -2.40% | -212.12 |
| ULTRA FINANCIALS PRO (UYG) | -5.58% | -492.66 |
| ULTRA HEALTH CARE PR (RXL) | +1.19% | +105.02 |
| ULTRA INDUSTRIALS PR (UXI) | -7.41% | -653.51 |
| ULTRA OIL & GAS PROS (DIG) | -11.34% | -1000.34 |
| ULTRA REAL ESTATE PR (URE) | -16.42% | -1448.77 |
| ULTRA SEMICONDUCTORS (USD) | -12.83% | -1132.33 |
| ULTRA TECHNOLOGY PRO (ROM) | -5.36% | -472.73 |
| ULTRA UTILITIES PROS (UPW) | +0.57% | +50.06 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -0.81% | -71.21 |
| POWERSHARES DB BASE (BOM) | +5.09% | +449.48 |
| POWERSHARES DB BASE (BDD) | -3.95% | -348.57 |
| POWERSHARES DB BASE (BOS) | +1.39% | +122.93 |
| POWERSHARES DB CRUDE (DTO) | +6.92% | +610.38 |
| POWERSHARES DB CRUDE (SZO) | +3.18% | +280.71 |
| POWERSHARES DB CRUDE (DXO) | -7.27% | -641.22 |
| POWERSHARES DB CRUDE (OLO) | -2.94% | -259.01 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -5.53% | -487.85 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +5.42% | +477.95 |
| Direxion Small Cap Bull 3x Shares (TNA) | -2.48% | -218.68 |
| Direxion Small Cap Bear 3x Shares (TZA) | +3.78% | +333.12 |
| Direxion Energy Bull 3x Shares (ERX) | -18.01% | -1588.92 |
| Direxion Energy Bear 3x Shares (ERY) | +16.94% | +1495.23 |
| Direxion Financial Bull 3x Shares (FAS) | -7.51% | -662.68 |
| Direxion Financial Bear 3x Shares (FAZ) | +8.72% | +769.25 |
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, December 17, 2008
SEC Under Fire
The Madoff Ponzi scheme has exposed the tender underbelly of the Securities and Exchange Commission. The SEC is said to have had complaints about the Ponzi scheme on file for the past decade, but failed to uncover the scheme all these years. In addition, there were conflicts of interest between SEC staff members and the Madoff firm which suggest that official malfeasance may have taken place. Given the many instances we've documented here in which the SEC was clearly manipulating the market, we wouldn't be surprised if the Chair of the SEC ends up in prison once the investigations are finished.
This is just one more example of how the Bush Administration has insidiously turned government regulators into co-conspirators in schemes to defraud the taxpayer. Some are calling for prosecution of these politician-crooks, but we are cynical and suspect most of these crimes will simply be swept under the rug.
Chrysler Shutting Down
It appears that Chrysler Corp is toast. It's shutting down for a month and, given its bleak prospects, may not re-open. We can't say we sympathize with the company, considering the very poor quality of its products, but it's a shame that it was ever taken over by the German automaker Daimler, which stripped it of its valuables and left it to die by the roadside as only a shell of its former self.
At least the American taxpayer isn't likely to be bailing out this company again. Chances are its remaining assets will be sold to the highest bidder.
The market rallied to a higher high, but couldn't hold the gain into the closing bell:
Change From 16 Dec 2008 To 17 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -1.12% | -99.80 |
| DIAMONDS TRUST SER 1 (DIA) | -1.36% | -121.55 |
| ULTRA DOW30 PROSHRS (DDM) | -2.61% | -232.66 |
| PT ULTRSHRT DOW30 PS (DXD) | +2.57% | +229.03 |
| S&P 500 (index) | -1.00% | -89.52 |
| S& P DEP RECEIPTS (SPY) | -0.97% | -86.44 |
| ULTRA S& P500 PROSHRS (SSO) | -1.81% | -161.18 |
| PT ULTRSHRT SP500 PS (SDS) | +1.76% | +156.82 |
| NYSE Composite (index) | -0.61% | -54.07 |
| ISHARES NYSE CMP IDX (NYC) | -0.43% | -38.38 |
| S&P SmallCap 600 (index) | +1.11% | +98.85 |
| PROSH ULTRA SMALLCAP (SAA) | +3.49% | +311.41 |
| SHORT SMALLCAP600 PR (SBB) | -2.27% | -202.20 |
| ULTRASHORT SMALLCAP6 (SDD) | -3.06% | -273.09 |
| Russell 2000 (index) | +0.77% | +69.12 |
| ISHARE RUS 2000 INDX (IWM) | +0.91% | +81.25 |
| ULTRA RUSSELL2000 PR (UWM) | +2.05% | +182.89 |
| ULTRASHORT RUSSELL20 (TWM) | -2.34% | -208.45 |
| NASDAQ-100 (index) | -1.41% | -125.66 |
| POWERSHARES QQQ TR 1 (QQQQ) | -1.21% | -108.05 |
| ULTRA QQQ PROSHARES (QLD) | -2.35% | -209.80 |
| PT UTLRSHRT QQQ PS (QID) | +2.31% | +206.17 |
| S&P MidCap 400 (index) | +0.95% | +84.37 |
| ISHARE SP MC 400 INX (IJH) | +0.97% | +86.43 |
| ULTRA MC400 PROSHRS (MVV) | +2.21% | +197.24 |
| PT ULTRSHR MC400 PS (MZZ) | -1.77% | -158.30 |
| GREENHAVEN CONT IDX (GCC) | +0.28% | +25.02 |
| Amex Gold (index) | -1.41% | -125.76 |
| MKT VECT GOLD MNRS (GDX) | -0.71% | -63.47 |
| STREETTRACKS GOLD TR (GLD) | +1.15% | +102.49 |
| DB GOLD DBL SH ETN (DZZ) | -2.05% | -183.09 |
| DB GOLD DBL LG ETN (DGP) | +1.72% | +153.16 |
| Semiconductor Sector (index) | -0.16% | -14.10 |
| ULTRA SEMICONDUCTORS (USD) | +0.32% | +28.29 |
| ULTRASHORT SEMICONDU (SSG) | -1.05% | -93.50 |
| ISHARE DJ FIN SC INX (IYF) | -0.61% | -54.25 |
| ISHARES LEHMAN 20 YR (TLT) | +2.71% | +242.15 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.68% | +60.70 |
| ISHARES LEH AGG FD (AGG) | +0.53% | +47.65 |
| ISHARES GS $ INVESTO (LQD) | +1.48% | +132.35 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.21% | -18.90 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.89% | -79.80 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -6.36% | -567.18 |
| SHORT QQQ PROSHARES (PSQ) | +1.16% | +103.69 |
| SHRT DOW30 PROSHARES (DOG) | +1.32% | +117.62 |
| SHRT S& P500 PROSHRS (SH) | +0.89% | +79.58 |
| SHRT MC400 PROSHARES (MYY) | -1.19% | -106.10 |
| SHORT SMALLCAP600 PR (SBB) | -2.27% | -202.20 |
| SHORT RUSSELL2000 PR (RWM) | -1.06% | -94.58 |
| PT UTLRSHRT QQQ PS (QID) | +2.31% | +206.17 |
| PT ULTRSHRT DOW30 PS (DXD) | +2.57% | +229.03 |
| PT ULTRSHRT SP500 PS (SDS) | +1.76% | +156.82 |
| PT ULTRSHR MC400 PS (MZZ) | -1.77% | -158.30 |
| ULTRASHORT SMALLCAP6 (SDD) | -3.06% | -273.09 |
| ULTRASHORT RUSSELL20 (TWM) | -2.34% | -208.45 |
| PST ULSHT RSL1K VALU (SJF) | -1.90% | -169.62 |
| PST ULSHT RSL1K GR (SFK) | -0.50% | -44.43 |
| PST ULSHT RSL MC VAL (SJL) | -2.38% | -212.75 |
| PST ULSHT RSL MC GR (SDK) | -3.13% | -279.08 |
| PST ULTSHT RSL2K VAL (SJH) | -1.66% | -148.35 |
| PST ULSHT RSL2K GR (SKK) | -1.96% | -174.48 |
| ULTRASHORT BASIC MAT (SMN) | -1.55% | -138.65 |
| ULTRASHORT CONSUMER (SZK) | +0.41% | +36.23 |
| ULTRASHORT CONSUMER (SCC) | -1.46% | -130.36 |
| ULTRASHORT FINANCIAL (SKF) | +0.74% | +65.63 |
| ULTRASHORT HEALTH CA (RXD) | -0.10% | -8.67 |
| ULTRASHORT INDUSTRIA (SIJ) | -0.48% | -43.02 |
| ULTRASHORT OIL & GAS (DUG) | +3.05% | +272.42 |
| ULTRASHORT REAL ESTA (SRS) | -7.37% | -657.68 |
| ULTRASHORT SEMICONDU (SSG) | -1.05% | -93.50 |
| ULTRASHORT TECHNOLOG (REW) | +2.36% | +210.66 |
| ULTRASHORT UTILITIES (SDP) | +5.82% | +518.98 |
| PROSHARES SHR MSCI E (EUM) | +1.52% | +136.02 |
| PROSHARES SHORT MSCI (EFZ) | +0.22% | +19.81 |
| PROSHARES ULTRASHORT (EFU) | +1.07% | +95.48 |
| PROSHARES UTLRASHORT (EEV) | +3.57% | +318.72 |
| PROSHARES US MSCI JP (EWV) | +0.37% | +33.27 |
| PROSHARES ULTRASHORT (FXP) | +1.79% | +159.80 |
| ULTRA QQQ PROSHARES (QLD) | -2.35% | -209.80 |
| ULTRA DOW30 PROSHRS (DDM) | -2.61% | -232.66 |
| ULTRA S& P500 PROSHRS (SSO) | -1.81% | -161.18 |
| ULTRA MC400 PROSHRS (MVV) | +2.21% | +197.24 |
| PROSH ULTRA SMALLCAP (SAA) | +3.49% | +311.41 |
| ULTRA RUSSELL2000 PR (UWM) | +2.05% | +182.89 |
| PST ULT RUS1000 VAL (UVG) | +0.22% | +19.28 |
| PST ULT RSL1000 GR (UKF) | +2.01% | +179.60 |
| PST ULT RSL MC VALU (UVU) | +1.49% | +132.77 |
| PST ULT RSL MC GR PS (UKW) | +4.09% | +365.38 |
| PST ULT RSL2000 VALU (UVT) | +1.37% | +122.32 |
| PST ULT RSL2000 GR (UKK) | +2.41% | +215.16 |
| ULTRA BASIC MATERIAL (UYM) | +1.83% | +163.28 |
| ULTRA CONSUMER GOODS (UGE) | +0.40% | +35.70 |
| ULTRA CONSUMER SERVI (UCC) | +2.46% | +219.81 |
| ULTRA FINANCIALS PRO (UYG) | -0.98% | -87.06 |
| ULTRA HEALTH CARE PR (RXL) | -0.40% | -36.12 |
| ULTRA INDUSTRIALS PR (UXI) | +1.29% | +114.87 |
| ULTRA OIL & GAS PROS (DIG) | -2.64% | -235.59 |
| ULTRA REAL ESTATE PR (URE) | +6.01% | +536.58 |
| ULTRA SEMICONDUCTORS (USD) | +0.32% | +28.29 |
| ULTRA TECHNOLOGY PRO (ROM) | -2.44% | -217.66 |
| ULTRA UTILITIES PROS (UPW) | -5.11% | -456.35 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | +1.00% | +89.52 |
| POWERSHARES DB BASE (BOM) | -1.06% | -94.80 |
| POWERSHARES DB BASE (BDD) | -0.62% | -55.32 |
| POWERSHARES DB BASE (BOS) | +0.42% | +37.06 |
| POWERSHARES DB BASE (BDG) | -0.99% | -88.36 |
| POWERSHARES DB CRUDE (DTO) | +5.36% | +477.99 |
| POWERSHARES DB CRUDE (SZO) | +4.65% | +414.73 |
| POWERSHARES DB CRUDE (DXO) | -5.86% | -523.24 |
| POWERSHARES DB CRUDE (OLO) | -2.76% | -245.94 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -2.56% | -228.58 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +2.45% | +218.37 |
| Direxion Small Cap Bull 3x Shares (TNA) | +3.93% | +350.35 |
| Direxion Small Cap Bear 3x Shares (TZA) | -2.70% | -240.83 |
| Direxion Energy Bull 3x Shares (ERX) | -3.05% | -272.08 |
| Direxion Energy Bear 3x Shares (ERY) | +3.78% | +337.00 |
| Direxion Financial Bull 3x Shares (FAS) | -1.49% | -133.40 |
| Direxion Financial Bear 3x Shares (FAZ) | -2.38% | -212.83 |
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, December 16, 2008
Translating Fedspeak
The Fed says they are not flooding the market with liquidity to drive mortgage rates down, but that's exactly what they are doing. Stocks reacted positively to the news as if the Fed had said they were buying stocks to boost the economy.
Following this month's meeting of the Open Market Committee, the Fed released a Statement. Since the Fed speaks in a coded language, we are providing a translation of that Statement:
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
Translation: We lost control, market rates went to zero anyway, so we are throwing up our hands and surrendering to the market.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
Translation: The real unemployment rate has zoomed to 12½% and is accelerating higher. We have given our owners, the banks, trillions of dollars in taxpayer money and all they have done is to squirrel the money away and refuse to lend it to Main Street. However, we have succeeded in eliminating our competition, the investment banks, and for that, we are highly pleased. As for the economy, we have no idea how to fix it. Sorry, guys, we screwed up and put you in a Depression once again!
Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.
Translation: That's another point in our favor. Inflation was pushing the mid-teens and now it's almost down to single digits. We're doing a great job, don't you think?
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
Translation: We have no idea what we're doing, but we'll throw the kitchen sink at the economy if we thought it might bring it back to life.
The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.
Translation: We're revving up the printing presses and warming up the helicopters. Early next year, look for the whirlybirds to appear over your neighborhood and drop bags of paper money on you. Stand clear, those bags can smart if they land on your head!
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Monday, December 15, 2008
Madoff Ponzi Scheme Ripples Continue to Spread
The Ponzi scheme perpetrated by Bernard Madoff which was revealed last week was not only the largest crime in history, but has apparently caused major losses at investment banks, charities and individual investors around the world, a fact which is only now coming to light. Fear of forced selling of remaining assets by those investors sent the stock market lower on Monday as the effects of the crime spread. Banks in Britain, France, Spain and Japan said they had fallen victim to the scam.
The most amazing thing about the scam is that, apparently, Madoff's advisory firm had been fully investigated by the Securities and Exchange Commission in 2006 and given a complete bill of health. This strongly suggests one of two things: either the government investigators were incredibly stupid to have overlooked a fraud of this scale, or that bribes were made to them to keep the operation secret. If the latter, it wouldn't be the first time a set of government employees were paid to keep the lid on a major crime. There's virtually no chance of the former alternative being the real one, of course.
Once again, an apparently "safe investment" has turned out to be a huge loser for investors. It's bad enough that those with money in the fund lost at all, but some of them had foolishly put all of their eggs into the Madoff basket. Even those who were smart enough to have already withdrawn their money from the scam may be punished and be forced to return their money to pay off the victims. New York judges may decide based upon case law that those investors may have had suspicions of fraud---apparently, under New York law, those investors who simply withdrew money for a specific purpose and had no suspicions will be allowed to keep their money. As usual, the clever are punished while the clueless are protected by the state.
The stock market drifted lower on relatively light volume Monday, then staged a last hour rally as bargain hunters re-entered the market. It appeared that some investors were selling stocks to buy bonds yielding 0-1% in a renewed "flight-to-no-yield" move that is designed to prevent them from sleeping like babies---i.e., waking up every two hours crying.
Change From 12 Dec 2008 To 15 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -0.75% | -65.15 |
| DIAMONDS TRUST SER 1 (DIA) | -0.43% | -36.97 |
| ULTRA DOW30 PROSHRS (DDM) | -1.00% | -85.99 |
| PT ULTRSHRT DOW30 PS (DXD) | +0.90% | +78.09 |
| S&P 500 (index) | -1.34% | -115.68 |
| S& P DEP RECEIPTS (SPY) | -1.39% | -120.25 |
| ULTRA S& P500 PROSHRS (SSO) | -2.30% | -198.15 |
| PT ULTRSHRT SP500 PS (SDS) | +1.99% | +171.38 |
| NYSE Composite (index) | -0.83% | -71.70 |
| ISHARES NYSE CMP IDX (NYC) | -0.14% | -11.90 |
| S&P SmallCap 600 (index) | -3.17% | -273.96 |
| PROSH ULTRA SMALLCAP (SAA) | -5.70% | -492.25 |
| SHORT SMALLCAP600 PR (SBB) | +2.24% | +193.66 |
| ULTRASHORT SMALLCAP6 (SDD) | +6.13% | +528.71 |
| Russell 2000 (index) | -3.39% | -292.18 |
| ISHARE RUS 2000 INDX (IWM) | -3.22% | -277.90 |
| ULTRA RUSSELL2000 PR (UWM) | -6.48% | -559.38 |
| ULTRASHORT RUSSELL20 (TWM) | +6.15% | +531.07 |
| NASDAQ-100 (index) | -1.85% | -159.82 |
| POWERSHARES QQQ TR 1 (QQQQ) | -1.75% | -151.19 |
| ULTRA QQQ PROSHARES (QLD) | -3.48% | -300.55 |
| PT UTLRSHRT QQQ PS (QID) | +3.20% | +276.13 |
| S&P MidCap 400 (index) | -2.60% | -224.28 |
| ISHARE SP MC 400 INX (IJH) | -2.15% | -185.27 |
| ULTRA MC400 PROSHRS (MVV) | -5.31% | -457.81 |
| PT ULTRSHR MC400 PS (MZZ) | +4.61% | +398.22 |
| GREENHAVEN CONT IDX (GCC) | +1.24% | +107.25 |
| Amex Gold (index) | +4.35% | +375.45 |
| MKT VECT GOLD MNRS (GDX) | +5.82% | +502.67 |
| STREETTRACKS GOLD TR (GLD) | +2.22% | +191.15 |
| DB GOLD DBL SH ETN (DZZ) | -4.55% | -392.80 |
| DB GOLD DBL LG ETN (DGP) | +4.82% | +415.82 |
| Semiconductor Sector (index) | -1.75% | -150.76 |
| ULTRA SEMICONDUCTORS (USD) | -2.28% | -196.67 |
| ULTRASHORT SEMICONDU (SSG) | +2.11% | +181.73 |
| ISHARE DJ FIN SC INX (IYF) | -3.66% | -316.16 |
| ISHARES LEHMAN 20 YR (TLT) | +1.14% | +98.30 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.22% | +18.73 |
| ISHARES LEH AGG FD (AGG) | +0.24% | +20.61 |
| ISHARES GS $ INVESTO (LQD) | -0.03% | -2.74 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.07% | +6.10 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.69% | -59.47 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -3.01% | -259.42 |
| SHORT QQQ PROSHARES (PSQ) | +1.47% | +126.76 |
| SHRT DOW30 PROSHARES (DOG) | +0.62% | +53.77 |
| SHRT S& P500 PROSHRS (SH) | +1.17% | +100.98 |
| SHRT MC400 PROSHARES (MYY) | +2.41% | +208.02 |
| SHORT SMALLCAP600 PR (SBB) | +2.24% | +193.66 |
| SHORT RUSSELL2000 PR (RWM) | +3.27% | +282.22 |
| PT UTLRSHRT QQQ PS (QID) | +3.20% | +276.13 |
| PT ULTRSHRT DOW30 PS (DXD) | +0.90% | +78.09 |
| PT ULTRSHRT SP500 PS (SDS) | +1.99% | +171.38 |
| PT ULTRSHR MC400 PS (MZZ) | +4.61% | +398.22 |
| ULTRASHORT SMALLCAP6 (SDD) | +6.13% | +528.71 |
| ULTRASHORT RUSSELL20 (TWM) | +6.15% | +531.07 |
| PST ULSHT RSL1K VALU (SJF) | +1.73% | +148.96 |
| PST ULSHT RSL1K GR (SFK) | +1.58% | +135.96 |
| PST ULSHT RSL MC VAL (SJL) | +2.89% | +249.63 |
| PST ULSHT RSL MC GR (SDK) | +2.87% | +247.94 |
| PST ULTSHT RSL2K VAL (SJH) | +4.57% | +394.02 |
| PST ULSHT RSL2K GR (SKK) | +6.67% | +575.82 |
| ULTRASHORT BASIC MAT (SMN) | +0.67% | +57.51 |
| ULTRASHORT CONSUMER (SZK) | +0.29% | +24.89 |
| ULTRASHORT CONSUMER (SCC) | +2.42% | +208.60 |
| ULTRASHORT FINANCIAL (SKF) | +6.95% | +599.48 |
| ULTRASHORT HEALTH CA (RXD) | -0.74% | -64.20 |
| ULTRASHORT INDUSTRIA (SIJ) | +0.33% | +28.28 |
| ULTRASHORT OIL & GAS (DUG) | +0.79% | +67.88 |
| ULTRASHORT REAL ESTA (SRS) | +5.77% | +498.23 |
| ULTRASHORT SEMICONDU (SSG) | +2.11% | +181.73 |
| ULTRASHORT TECHNOLOG (REW) | +2.60% | +224.34 |
| ULTRASHORT UTILITIES (SDP) | +2.48% | +214.27 |
| PROSHARES SHR MSCI E (EUM) | +1.71% | +147.51 |
| PROSHARES SHORT MSCI (EFZ) | -0.38% | -32.58 |
| PROSHARES ULTRASHORT (EFU) | -0.61% | -52.76 |
| PROSHARES UTLRASHORT (EEV) | +1.72% | +148.47 |
| PROSHARES US MSCI JP (EWV) | +0.80% | +69.04 |
| PROSHARES ULTRASHORT (FXP) | +6.58% | +567.94 |
| ULTRA QQQ PROSHARES (QLD) | -3.48% | -300.55 |
| ULTRA DOW30 PROSHRS (DDM) | -1.00% | -85.99 |
| ULTRA S& P500 PROSHRS (SSO) | -2.30% | -198.15 |
| ULTRA MC400 PROSHRS (MVV) | -5.31% | -457.81 |
| PROSH ULTRA SMALLCAP (SAA) | -5.70% | -492.25 |
| ULTRA RUSSELL2000 PR (UWM) | -6.48% | -559.38 |
| PST ULT RUS1000 VAL (UVG) | -3.27% | -281.89 |
| PST ULT RSL1000 GR (UKF) | -0.57% | -49.31 |
| PST ULT RSL MC VALU (UVU) | -3.48% | -300.27 |
| PST ULT RSL MC GR PS (UKW) | -2.39% | -206.42 |
| PST ULT RSL2000 VALU (UVT) | -5.15% | -444.26 |
| PST ULT RSL2000 GR (UKK) | -6.62% | -571.67 |
| ULTRA BASIC MATERIAL (UYM) | -0.35% | -29.84 |
| ULTRA CONSUMER GOODS (UGE) | -0.24% | -20.93 |
| ULTRA CONSUMER SERVI (UCC) | -2.04% | -176.12 |
| ULTRA FINANCIALS PRO (UYG) | -7.21% | -621.96 |
| ULTRA HEALTH CARE PR (RXL) | +0.65% | +56.44 |
| ULTRA INDUSTRIALS PR (UXI) | -1.52% | -130.82 |
| ULTRA OIL & GAS PROS (DIG) | -0.10% | -8.75 |
| ULTRA REAL ESTATE PR (URE) | +3.60% | +310.67 |
| ULTRA SEMICONDUCTORS (USD) | -2.28% | -196.67 |
| ULTRA TECHNOLOGY PRO (ROM) | -2.50% | -215.64 |
| ULTRA UTILITIES PROS (UPW) | -3.05% | -263.20 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | -0.03% | -2.25 |
| POWERSHARES DB BASE (BDD) | -1.21% | -104.60 |
| POWERSHARES DB BASE (BOS) | +0.39% | +33.95 |
| POWERSHARES DB CRUDE (DTO) | +5.27% | +454.91 |
| POWERSHARES DB CRUDE (SZO) | +3.92% | +338.33 |
| POWERSHARES DB CRUDE (DXO) | -5.49% | -473.58 |
| POWERSHARES DB CRUDE (OLO) | -1.81% | -156.30 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -4.28% | -369.52 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +3.96% | +342.03 |
| Direxion Small Cap Bull 3x Shares (TNA) | -9.17% | -791.13 |
| Direxion Small Cap Bear 3x Shares (TZA) | +10.09% | +871.04 |
| Direxion Energy Bull 3x Shares (ERX) | +0.10% | +8.48 |
| Direxion Energy Bear 3x Shares (ERY) | +0.87% | +74.80 |
| Direxion Financial Bull 3x Shares (FAS) | -10.50% | -906.38 |
| Direxion Financial Bear 3x Shares (FAZ) | +10.84% | +935.75 |
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, December 14, 2008
Bush-style Neoliberalism Proves Itself Bankrupt
There aren't many so-called "free market" advocates around anymore. The concept of free-market liberalism, or neoliberalism which grew like a rising tide under Reagan, expanded into a tidal wave sweeping the planet under Clinton and which crashed to shore under Bush has proven it was a grandiose philosophy which leads ultimately to bankruptcy. Ultimately, the human race must decide to pursue a different path from here. The current financial debacle can be seen in perspective as just the opportunity we've needed to rethink and rebuild society in a way which will not only not continue the cycle of boom and bust and income inequality, but will create a lasting trend toward an increasingly affluent world for every member of human society.
The danger is that such financial crises as we're witnessing now have, in the past, led to wars to lead nations out of distressed circumstances. The Depression of the Thirties did not end in the Thirties, but finally ended in 1949, following a devastating World War. The New Deal was a holding action, not a real turn to the upside in the economy. Those who are thinking that rebuilding infrastructure is going to make a big difference in the economy are simply wrong. We need not only to take lessons from history, but update those lessons with what we know now.
Space-Solar Power Systems Getting Obama Attention
The Space Frontier Foundation has submitted a paper for the Obama transition team to consider. The paper is Space Solar Power (SSP) - A Solution for Energy Independence & Climate Change. The SSP white paper was among the first ten released by the Obama transition team. It is the first and only space-related white paper released by the transition team to date. With 145 comments thus far, it is already among the top five most-discussed of the 20-some white papers on Change.gov.
Foundation Chairman Berin Szoka called upon all Americans to join the discussion about Space Solar Power at Change.gov: "For over twenty years, the Space Frontier Foundation has championed Space Solar Power as a world-changing technology that could do more to improve life here on Earth than any space program or commercial space venture ever. We applaud the Obama transition team's interest in developing Space Solar Power as a clean energy source that could significantly reduce U.S. dependence on strategically vulnerable energy sources."
This one proposal could cause America to become a net energy exporter in the near future. In fact, when you read about the new Administration's Economic Agenda, you have to be very impressed.
An Oversupply of Oil
When we forecast that oil would retrace its entire rally and return to the $10 price level within three years, we didn't really expect it to make this much progress toward the target this fast. But, with oil off 75% from its July highs, it has gotten to within about thirty bucks of our target already. John Mauldin points out in his letter this weekend that,
This is not a world economic environment that is friendly to oil producers. Could oil fall below $30? It could if producing countries do not start to cut back on production. But many of the larger producers need as much money as they can to keep the lid on civil unrest.
Deutsche Bank and a private consulting firm called PFC, based in Washington, have determined that Venezuela needs the price of oil to average $97 a barrel to balance its accounts, while in 2000 that South American country only required the price to be $34. Look at this chart, courtesy of Dennis Gartman. It shows the price of oil that various countries need to balance their budgets.
Year 2000 2007 2008 2009 Venezuela 34 91 94 97 Nigeria 32 63 68 71 Iran 18 49 55 58 Saudia Arabia 23 49 55 62 Kuwait 11 45 45 48 UAE 5 34 42 51 Algeria 22 26 31 35
Russia will need $70 oil. These countries are going to need to produce and sell what they can, which is in conflict with the need to control production and move prices higher.
So far, the OPEC nations are not cutting back any significant amount of production compared with the destruction in demand. Oil is backing up in the system. Energy economist Philip Verleger suggests that OPEC should execute an "astounding 7.7 million barrels per day" just to restore market balance today. Global demand is down by over 5 million barrels a day to 81.6 million barrels a day. Non-OPEC countries produce almost 50 million barrels of oil. OPEC produces roughly 31 million, plus there are some other OPEC sources of about 5 million barrels equivalent in natural gas liquids. Thus, Verleger says OPEC oil production needs to drop by almost 25%, to somewhere under 24 million barrels a day. Think Iran or Venezuela will cut that much, given their need for cash to fund their regimes? Will Russia join OPEC and cut production? It will be interesting to watch Iran and Venezuela in the coming year scramble to maintain power.
It is quite possible that oil could go a lot lower in the next few months. Demand could fall further. If we are truly producing an extra 5 million barrels a day, the excess supply could be at all-time highs within a few months. Longer term, I still think oil is going higher; but it could be wild ride, and the longer term is now a lot further off. I would not want to be long oil for the next few quarters, until there is some serious growth in demand and some cuts in production.
And so it goes---just when everyone had decided Oil would kill the world economy, the world economy killed the price of Oil. Oil may not be coming back, especially if just one of the alternatives obsolete its use as a fuel. Will Solar Power Satellites do it? Maybe. Will thermopower do it? Almost certainly. The long term does not look bullish at all for Oil.
Friday Stock Bounce
The stock market shrugged off the failure of the automaker bailout Friday, showing that traders were confident that even the inept Bush Administration wouldn't let 3,000,000 jobs go down the drain:
Change From 11 Dec 2008 To 12 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.75% | +64.59 |
| DIAMONDS TRUST SER 1 (DIA) | +0.58% | +49.88 |
| ULTRA DOW30 PROSHRS (DDM) | +1.04% | +89.02 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.10% | -94.34 |
| S&P 500 (index) | +0.94% | +80.20 |
| S& P DEP RECEIPTS (SPY) | +1.19% | +102.27 |
| ULTRA S& P500 PROSHRS (SSO) | +1.04% | +89.08 |
| PT ULTRSHRT SP500 PS (SDS) | -0.91% | -77.94 |
| NYSE Composite (index) | +0.71% | +61.04 |
| ISHARES NYSE CMP IDX (NYC) | +0.12% | +10.13 |
| S&P SmallCap 600 (index) | +3.62% | +310.07 |
| PROSH ULTRA SMALLCAP (SAA) | +6.51% | +557.19 |
| SHORT SMALLCAP600 PR (SBB) | +0.43% | +36.42 |
| ULTRASHORT SMALLCAP6 (SDD) | -6.92% | -592.61 |
| Russell 2000 (index) | +3.82% | +326.88 |
| ISHARE RUS 2000 INDX (IWM) | +3.44% | +294.76 |
| ULTRA RUSSELL2000 PR (UWM) | +7.44% | +637.28 |
| ULTRASHORT RUSSELL20 (TWM) | -7.05% | -604.25 |
| NASDAQ-100 (index) | +2.33% | +199.24 |
| POWERSHARES QQQ TR 1 (QQQQ) | +2.03% | +173.72 |
| ULTRA QQQ PROSHARES (QLD) | +3.89% | +332.98 |
| PT UTLRSHRT QQQ PS (QID) | -3.95% | -338.11 |
| S&P MidCap 400 (index) | +2.94% | +251.73 |
| ISHARE SP MC 400 INX (IJH) | +2.50% | +214.43 |
| ULTRA MC400 PROSHRS (MVV) | +5.90% | +505.24 |
| PT ULTRSHR MC400 PS (MZZ) | -5.35% | -458.31 |
| GREENHAVEN CONT IDX (GCC) | -0.29% | -24.49 |
| Amex Gold (index) | +3.66% | +313.89 |
| MKT VECT GOLD MNRS (GDX) | +2.32% | +198.69 |
| STREETTRACKS GOLD TR (GLD) | +0.20% | +16.99 |
| DB GOLD DBL SH ETN (DZZ) | -0.68% | -58.67 |
| DB GOLD DBL LG ETN (DGP) | +0.19% | +16.11 |
| Semiconductor Sector (index) | +4.71% | +403.05 |
| ULTRA SEMICONDUCTORS (USD) | +9.12% | +780.99 |
| ULTRASHORT SEMICONDU (SSG) | -8.74% | -748.66 |
| ISHARE DJ FIN SC INX (IYF) | +2.33% | +199.94 |
| ISHARES LEHMAN 20 YR (TLT) | 0.00% | 0.00 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.28% | +23.97 |
| ISHARES LEH AGG FD (AGG) | +0.03% | +2.56 |
| ISHARES GS $ INVESTO (LQD) | +0.54% | +46.47 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.05% | +4.04 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -0.59% | -50.96 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -0.86% | -73.79 |
| SHORT QQQ PROSHARES (PSQ) | -1.97% | -168.38 |
| SHRT DOW30 PROSHARES (DOG) | -0.71% | -60.56 |
| SHRT S& P500 PROSHRS (SH) | -0.60% | -51.29 |
| SHRT MC400 PROSHARES (MYY) | -2.67% | -228.53 |
| SHORT SMALLCAP600 PR (SBB) | +0.43% | +36.42 |
| SHORT RUSSELL2000 PR (RWM) | -3.62% | -309.65 |
| PT UTLRSHRT QQQ PS (QID) | -3.95% | -338.11 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.10% | -94.34 |
| PT ULTRSHRT SP500 PS (SDS) | -0.91% | -77.94 |
| PT ULTRSHR MC400 PS (MZZ) | -5.35% | -458.31 |
| ULTRASHORT SMALLCAP6 (SDD) | -6.92% | -592.61 |
| ULTRASHORT RUSSELL20 (TWM) | -7.05% | -604.25 |
| PST ULSHT RSL1K VALU (SJF) | +1.07% | +92.07 |
| PST ULSHT RSL1K GR (SFK) | -1.35% | -115.60 |
| PST ULSHT RSL MC VAL (SJL) | +4.32% | +369.76 |
| PST ULSHT RSL MC GR (SDK) | -0.88% | -74.96 |
| PST ULTSHT RSL2K VAL (SJH) | -6.02% | -515.55 |
| PST ULSHT RSL2K GR (SKK) | -5.33% | -456.91 |
| ULTRASHORT BASIC MAT (SMN) | -2.78% | -238.34 |
| ULTRASHORT CONSUMER (SZK) | +0.77% | +66.09 |
| ULTRASHORT CONSUMER (SCC) | -1.65% | -141.67 |
| ULTRASHORT FINANCIAL (SKF) | -5.06% | -433.31 |
| ULTRASHORT HEALTH CA (RXD) | -0.16% | -13.75 |
| ULTRASHORT INDUSTRIA (SIJ) | -0.01% | -0.76 |
| ULTRASHORT OIL & GAS (DUG) | +1.19% | +102.27 |
| ULTRASHORT REAL ESTA (SRS) | -19.21% | -1645.48 |
| ULTRASHORT SEMICONDU (SSG) | -8.74% | -748.66 |
| ULTRASHORT TECHNOLOG (REW) | -4.28% | -366.38 |
| ULTRASHORT UTILITIES (SDP) | -0.95% | -81.54 |
| PROSHARES SHR MSCI E (EUM) | -1.51% | -128.92 |
| PROSHARES SHORT MSCI (EFZ) | -1.12% | -95.92 |
| PROSHARES ULTRASHORT (EFU) | -1.33% | -114.08 |
| PROSHARES UTLRASHORT (EEV) | -1.93% | -165.17 |
| PROSHARES US MSCI JP (EWV) | -4.01% | -343.68 |
| PROSHARES ULTRASHORT (FXP) | +0.11% | +9.77 |
| ULTRA QQQ PROSHARES (QLD) | +3.89% | +332.98 |
| ULTRA DOW30 PROSHRS (DDM) | +1.04% | +89.02 |
| ULTRA S& P500 PROSHRS (SSO) | +1.04% | +89.08 |
| ULTRA MC400 PROSHRS (MVV) | +5.90% | +505.24 |
| PROSH ULTRA SMALLCAP (SAA) | +6.51% | +557.19 |
| ULTRA RUSSELL2000 PR (UWM) | +7.44% | +637.28 |
| PST ULT RUS1000 VAL (UVG) | +1.45% | +124.49 |
| PST ULT RSL1000 GR (UKF) | +0.38% | +32.75 |
| PST ULT RSL MC VALU (UVU) | +3.98% | +340.87 |
| PST ULT RSL MC GR PS (UKW) | +1.48% | +127.06 |
| PST ULT RSL2000 VALU (UVT) | +6.66% | +570.22 |
| PST ULT RSL2000 GR (UKK) | +5.85% | +501.37 |
| ULTRA BASIC MATERIAL (UYM) | +2.84% | +243.67 |
| ULTRA CONSUMER GOODS (UGE) | -0.24% | -20.72 |
| ULTRA CONSUMER SERVI (UCC) | +0.10% | +8.97 |
| ULTRA FINANCIALS PRO (UYG) | +5.31% | +455.07 |
| ULTRA HEALTH CARE PR (RXL) | -0.37% | -31.89 |
| ULTRA INDUSTRIALS PR (UXI) | +1.24% | +106.00 |
| ULTRA OIL & GAS PROS (DIG) | -2.05% | -175.72 |
| ULTRA REAL ESTATE PR (URE) | +7.53% | +644.68 |
| ULTRA SEMICONDUCTORS (USD) | +9.12% | +780.99 |
| ULTRA TECHNOLOGY PRO (ROM) | +3.94% | +337.82 |
| ULTRA UTILITIES PROS (UPW) | +1.95% | +166.78 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | +7.50% | +642.62 |
| POWERSHARES DB BASE (BDD) | -5.53% | -474.02 |
| POWERSHARES DB BASE (BOS) | +4.19% | +358.91 |
| POWERSHARES DB CRUDE (DTO) | +1.55% | +132.76 |
| POWERSHARES DB CRUDE (SZO) | +0.88% | +75.44 |
| POWERSHARES DB CRUDE (DXO) | +0.61% | +52.55 |
| POWERSHARES DB CRUDE (OLO) | -0.66% | -56.78 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +2.66% | +227.96 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -2.73% | -233.69 |
| Direxion Small Cap Bull 3x Shares (TNA) | +9.60% | +822.65 |
| Direxion Small Cap Bear 3x Shares (TZA) | -10.76% | -921.99 |
| Direxion Energy Bull 3x Shares (ERX) | -3.33% | -284.89 |
| Direxion Energy Bear 3x Shares (ERY) | +2.56% | +219.20 |
| Direxion Financial Bull 3x Shares (FAS) | +4.14% | +354.25 |
| Direxion Financial Bear 3x Shares (FAZ) | -6.47% | -554.51 |
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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Friday, December 12, 2008
Giant Ponzi Scheme Rocks Wall Street
As if the bank bailouts weren't bad enough, now one of Wall Street's most prominent members has confessed his investment firm is a "giant Ponzi scheme." The Securities and Exchange Commission has "charged Bernard L. Madoff and his investment firm, Bernard L. Madoff Investment Securities LLC, with securities fraud for a multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm. The SEC is seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm."
The SEC continues, "The SEC's complaint, filed in federal court in Manhattan, alleges that Madoff yesterday informed two senior employees that his investment advisory business was a fraud. Madoff told these employees that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme." The senior employees understood him to be saying that he had for years been paying returns to certain investors out of the principal received from other, different investors. Madoff admitted in this conversation that the firm was insolvent and had been for years, and that he estimated the losses from this fraud were at least $50 billion."
Apparently, losses from the scheme are on the order of almost as much money as Washington spent bailing out one of the Wall Street investment banks. Victims of the scheme are mostly hedge funds and large investors.
In a way, what Madoff was doing was little different from what all banks do: counterfeiting money. That he was operating outside the law just means he wasn't regulated as a banking institution. All banks are essentially government-condoned gambling houses operating Ponzi schemes on the public. When the gamblers lose, the taxpayers are required to pay the depositors the money which the bank lost. When the gamblers win, the gamblers pay themselves enormous sums of money. Most of that money is obtained by charging outrageous fees (called "interest") on counterfeit funds printed by the bank and loaned to borrowers. Strangely, the public not only puts up with this treatment year after year, they defend the way the banking system is structured. Perhaps those defenders of the status quo are planning to apply to be a bank in the future? In any case, about every twenty years or so, the banking system hits the wall, just like Madoff hit the wall, seizes up and takes the economy down with it into recession. About every third time this happens, however, the recession turns into Depression, which is what we have in progress right now. The crowd will figure it out, eventually. It's how the government operates and it's called "Mushroom Management." They just admitted it was a recession in its second year only a week ago. Maybe by the third year, they'll admit it's a Depression.
In other banking news, Bank of America announced it was laying-off up to 35,000 employees. And so it goes....
The bargain hunters finally decided they were wrong and turned into sellers Thursday afternoon on Wall Street:
Change From 10 Dec 2008 To 11 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -2.24% | -196.33 |
| DIAMONDS TRUST SER 1 (DIA) | -2.03% | -177.95 |
| ULTRA DOW30 PROSHRS (DDM) | -4.44% | -388.85 |
| PT ULTRSHRT DOW30 PS (DXD) | +3.98% | +348.70 |
| S&P 500 (index) | -2.85% | -249.91 |
| S& P DEP RECEIPTS (SPY) | -2.41% | -210.99 |
| ULTRA S& P500 PROSHRS (SSO) | -5.16% | -452.03 |
| PT ULTRSHRT SP500 PS (SDS) | +4.90% | +429.71 |
| NYSE Composite (index) | -2.24% | -196.57 |
| ISHARES NYSE CMP IDX (NYC) | -2.57% | -225.51 |
| S&P SmallCap 600 (index) | -5.23% | -458.42 |
| PROSH ULTRA SMALLCAP (SAA) | -10.19% | -892.64 |
| SHORT SMALLCAP600 PR (SBB) | +1.60% | +140.05 |
| ULTRASHORT SMALLCAP6 (SDD) | +9.96% | +872.24 |
| Russell 2000 (index) | -5.29% | -463.27 |
| ISHARE RUS 2000 INDX (IWM) | -5.07% | -444.03 |
| ULTRA RUSSELL2000 PR (UWM) | -10.21% | -894.40 |
| ULTRASHORT RUSSELL20 (TWM) | +10.02% | +877.48 |
| NASDAQ-100 (index) | -3.43% | -300.46 |
| POWERSHARES QQQ TR 1 (QQQQ) | -2.74% | -240.20 |
| ULTRA QQQ PROSHARES (QLD) | -5.53% | -484.27 |
| PT UTLRSHRT QQQ PS (QID) | +5.46% | +478.06 |
| S&P MidCap 400 (index) | -4.68% | -410.09 |
| ISHARE SP MC 400 INX (IJH) | -4.55% | -398.48 |
| ULTRA MC400 PROSHRS (MVV) | -9.15% | -801.24 |
| PT ULTRSHR MC400 PS (MZZ) | +9.08% | +795.23 |
| GREENHAVEN CONT IDX (GCC) | +2.09% | +183.33 |
| Amex Gold (index) | -0.67% | -59.01 |
| MKT VECT GOLD MNRS (GDX) | -0.39% | -34.26 |
| STREETTRACKS GOLD TR (GLD) | +1.13% | +98.88 |
| DB GOLD DBL SH ETN (DZZ) | -1.85% | -161.98 |
| DB GOLD DBL LG ETN (DGP) | +2.24% | +196.57 |
| Semiconductor Sector (index) | -2.49% | -218.44 |
| ULTRA SEMICONDUCTORS (USD) | -4.33% | -379.01 |
| ULTRASHORT SEMICONDU (SSG) | +3.84% | +336.17 |
| ISHARE DJ FIN SC INX (IYF) | -7.50% | -657.35 |
| ISHARES LEHMAN 20 YR (TLT) | +0.20% | +17.19 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.60% | +52.98 |
| ISHARES LEH AGG FD (AGG) | +0.52% | +45.59 |
| ISHARES GS $ INVESTO (LQD) | +0.34% | +29.93 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.24% | +20.70 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.11% | -96.85 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +0.47% | +40.99 |
| SHORT QQQ PROSHARES (PSQ) | +2.82% | +247.04 |
| SHRT DOW30 PROSHARES (DOG) | +2.08% | +181.80 |
| SHRT S& P500 PROSHRS (SH) | +2.53% | +221.39 |
| SHRT MC400 PROSHARES (MYY) | +4.44% | +389.40 |
| SHORT SMALLCAP600 PR (SBB) | +1.60% | +140.05 |
| SHORT RUSSELL2000 PR (RWM) | +5.11% | +447.95 |
| PT UTLRSHRT QQQ PS (QID) | +5.46% | +478.06 |
| PT ULTRSHRT DOW30 PS (DXD) | +3.98% | +348.70 |
| PT ULTRSHRT SP500 PS (SDS) | +4.90% | +429.71 |
| PT ULTRSHR MC400 PS (MZZ) | +9.08% | +795.23 |
| ULTRASHORT SMALLCAP6 (SDD) | +9.96% | +872.24 |
| ULTRASHORT RUSSELL20 (TWM) | +10.02% | +877.48 |
| PST ULSHT RSL1K VALU (SJF) | +4.76% | +417.43 |
| PST ULSHT RSL1K GR (SFK) | +5.67% | +496.80 |
| PST ULSHT RSL MC VAL (SJL) | -1.21% | -106.22 |
| PST ULSHT RSL MC GR (SDK) | +6.40% | +560.38 |
| PST ULTSHT RSL2K VAL (SJH) | +10.55% | +924.32 |
| PST ULSHT RSL2K GR (SKK) | +8.24% | +722.16 |
| ULTRASHORT BASIC MAT (SMN) | +6.96% | +609.85 |
| ULTRASHORT CONSUMER (SZK) | +4.33% | +379.22 |
| ULTRASHORT CONSUMER (SCC) | +5.80% | +507.74 |
| ULTRASHORT FINANCIAL (SKF) | +15.38% | +1347.55 |
| ULTRASHORT HEALTH CA (RXD) | +0.43% | +37.98 |
| ULTRASHORT INDUSTRIA (SIJ) | +8.19% | +717.87 |
| ULTRASHORT OIL & GAS (DUG) | +1.04% | +91.02 |
| ULTRASHORT REAL ESTA (SRS) | +24.64% | +2158.38 |
| ULTRASHORT SEMICONDU (SSG) | +3.84% | +336.17 |
| ULTRASHORT TECHNOLOG (REW) | +5.66% | +496.04 |
| ULTRASHORT UTILITIES (SDP) | +2.20% | +192.99 |
| PROSHARES SHR MSCI E (EUM) | +1.97% | +172.32 |
| PROSHARES SHORT MSCI (EFZ) | +0.41% | +36.13 |
| PROSHARES ULTRASHORT (EFU) | +0.46% | +40.69 |
| PROSHARES UTLRASHORT (EEV) | +3.97% | +348.20 |
| PROSHARES US MSCI JP (EWV) | +0.45% | +39.02 |
| PROSHARES ULTRASHORT (FXP) | +7.12% | +623.71 |
| ULTRA QQQ PROSHARES (QLD) | -5.53% | -484.27 |
| ULTRA DOW30 PROSHRS (DDM) | -4.44% | -388.85 |
| ULTRA S& P500 PROSHRS (SSO) | -5.16% | -452.03 |
| ULTRA MC400 PROSHRS (MVV) | -9.15% | -801.24 |
| PROSH ULTRA SMALLCAP (SAA) | -10.19% | -892.64 |
| ULTRA RUSSELL2000 PR (UWM) | -10.21% | -894.40 |
| PST ULT RUS1000 VAL (UVG) | -6.72% | -589.16 |
| PST ULT RSL1000 GR (UKF) | -5.60% | -490.26 |
| PST ULT RSL MC VALU (UVU) | -8.96% | -784.95 |
| PST ULT RSL MC GR PS (UKW) | -7.43% | -650.82 |
| PST ULT RSL2000 VALU (UVT) | -11.05% | -968.14 |
| PST ULT RSL2000 GR (UKK) | -8.79% | -769.91 |
| ULTRA BASIC MATERIAL (UYM) | -7.26% | -635.72 |
| ULTRA CONSUMER GOODS (UGE) | -4.70% | -411.56 |
| ULTRA CONSUMER SERVI (UCC) | -5.45% | -477.34 |
| ULTRA FINANCIALS PRO (UYG) | -15.14% | -1326.21 |
| ULTRA HEALTH CARE PR (RXL) | -0.43% | -37.89 |
| ULTRA INDUSTRIALS PR (UXI) | -7.97% | -698.52 |
| ULTRA OIL & GAS PROS (DIG) | -0.59% | -51.88 |
| ULTRA REAL ESTATE PR (URE) | -28.68% | -2512.86 |
| ULTRA SEMICONDUCTORS (USD) | -4.33% | -379.01 |
| ULTRA TECHNOLOGY PRO (ROM) | -6.18% | -541.66 |
| ULTRA UTILITIES PROS (UPW) | -2.24% | -196.37 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -0.96% | -83.98 |
| POWERSHARES DB BASE (BOM) | -1.45% | -126.91 |
| POWERSHARES DB BASE (BDD) | -1.13% | -99.19 |
| POWERSHARES DB BASE (BOS) | -0.95% | -83.01 |
| POWERSHARES DB CRUDE (DTO) | -9.64% | -844.89 |
| POWERSHARES DB CRUDE (SZO) | -5.95% | -520.90 |
| POWERSHARES DB CRUDE (DXO) | +16.01% | +1403.07 |
| POWERSHARES DB CRUDE (OLO) | +5.71% | +499.90 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -7.39% | -647.83 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +8.18% | +716.77 |
| Direxion Small Cap Bull 3x Shares (TNA) | -14.98% | -1312.56 |
| Direxion Small Cap Bear 3x Shares (TZA) | +14.95% | +1309.79 |
| Direxion Energy Bull 3x Shares (ERX) | -1.20% | -104.89 |
| Direxion Energy Bear 3x Shares (ERY) | -0.13% | -11.79 |
| Direxion Financial Bull 3x Shares (FAS) | -21.44% | -1878.80 |
| Direxion Financial Bear 3x Shares (FAZ) | +21.45% | +1879.16 |
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, December 10, 2008
Bailout Flameout
It's far enough along now to judge the effectiveness of the various bailout packages for the banks. The inescapable conclusion is that these bailouts have done nothing to keep the credit crisis from spilling from Wall Street into Main Street. The country is plunging, on a daily basis, deeper into recession (Depression is our call, but it will take time for that call to be proven---it took a year for our recession call to be proven). Cramer was right when he wailed in the Summer of 2007, "They know nothing!" Well, more than a year later, they still know nothing.
Elizabeth Warren, Harvard law professor and chair of the Congressional Oversight Panel---COP charged with reviewing the current state of financial markets and the regulatory system, is looking into the hypocrisy behind the bailout. COP has only been in existence for two weeks, but it has already released its first report, which is available at the website. They are looking for feedback from citizens and intend to ask the hard questions and get those answers. Reading their initial report is a stunning revelation that the current Bush Administration is composed of crooks and thieves, as if we didn't already know it.
It's looking grim out there. The lenders who created this financial disaster haven't changed their greedy ways. They offer everything but a solution to solve the problem because it's "in their DNA." These are the rapacious capitalists who lure the unwary into their trap and devour them. Up to 10 million more foreclosures are ahead according to one source and that's going to mean that a very significant percentage of the nation's homes will be owned by these evil capitalists. We are rapidly approaching the day when the banks will have fulfilled their destiny of owning the entire economy---after wrecking it, that is.
It's time for a change. It's time for the government to nationalize all banks and bank-like institutions---and that includes the Federal Reserve, which is a private, not a public, bank. It's also time for the government to start printing money to monetize the enormous debt burden on the country which has come about from this banking disaster.
In other words, it's time for a "New" New Deal. This approach of patching the leaks in the dam is not working. And, it's creating further problems. Why would anyone who worked hard all their life not be discouraged by a government that rewards failure and punishes success? Why would anyone work and not demand a bailout instead? Feed from the public trough is much easier to digest.
Speaking of bailouts, it looks like the automakers are not getting one. It was bad enough when politicians were strong-armed by Paulson and Bernanke into transferring $700 Billion to the banks to use in paying yearend bonuses, acquiring other banks and locking the remainder in the vault, now that they are being asked to bailout the automakers, there's serious opposition. Certainly, on the surface, having the government loaning $15 Billion to businesses which are worth only $10 Billion on the open market in order to build a "bridge" to the promised land of the Obama Administration doesn't seem to make sense, especially when you consider that those same businesses are $62 Billion in debt right now. But, letting them go bankrupt may be the shove that pushes this Depression right up there with the Thirties.
Since the last bull market ended in 2007, the S&P 500 Index fell more than 835 points (53%). According to a fundamental valuation measure, the S&P 500 Index may have to fall about 500 more points, which would put this bear market in line with historic declines of the Twentieth Century, according to research into the Tobin Q-ratio, an obscure financial measure which has set a floor under the market in prior severe recessions and the Great Depression. Although the market may not immediately head to 400 due to the flood of paper money being printed by the Fed, the final collapse could come by 2014 if this Depression follows the course of prior pullbacks.
Stocks waffled Wednesday, waiting to see whether the Congress would shove the automakers over the cliff and send the economy further into Depression:
Change From 9 Dec 2008 To 10 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +0.81% | +70.09 |
| DIAMONDS TRUST SER 1 (DIA) | +0.61% | +52.88 |
| ULTRA DOW30 PROSHRS (DDM) | +1.51% | +131.44 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.12% | -97.20 |
| S&P 500 (index) | +1.06% | +92.13 |
| S& P DEP RECEIPTS (SPY) | +0.68% | +59.24 |
| ULTRA S& P500 PROSHRS (SSO) | +1.93% | +168.05 |
| PT ULTRSHRT SP500 PS (SDS) | -1.87% | -162.84 |
| NYSE Composite (index) | +1.97% | +170.93 |
| ISHARES NYSE CMP IDX (NYC) | +2.10% | +182.38 |
| S&P SmallCap 600 (index) | +2.29% | +198.80 |
| PROSH ULTRA SMALLCAP (SAA) | +4.49% | +390.28 |
| SHORT SMALLCAP600 PR (SBB) | -2.02% | -175.67 |
| ULTRASHORT SMALLCAP6 (SDD) | -3.30% | -287.21 |
| Russell 2000 (index) | +2.27% | +196.89 |
| ISHARE RUS 2000 INDX (IWM) | +2.36% | +204.94 |
| ULTRA RUSSELL2000 PR (UWM) | +4.23% | +367.99 |
| ULTRASHORT RUSSELL20 (TWM) | -4.17% | -362.70 |
| NASDAQ-100 (index) | +0.61% | +52.90 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.33% | -28.96 |
| ULTRA QQQ PROSHARES (QLD) | -0.11% | -9.47 |
| PT UTLRSHRT QQQ PS (QID) | +0.24% | +20.72 |
| S&P MidCap 400 (index) | +2.70% | +234.34 |
| ISHARE SP MC 400 INX (IJH) | +2.61% | +226.86 |
| ULTRA MC400 PROSHRS (MVV) | +5.43% | +471.59 |
| PT ULTRSHR MC400 PS (MZZ) | -5.35% | -465.26 |
| GREENHAVEN CONT IDX (GCC) | +1.13% | +98.38 |
| Amex Gold (index) | +10.30% | +895.10 |
| MKT VECT GOLD MNRS (GDX) | +10.70% | +930.36 |
| STREETTRACKS GOLD TR (GLD) | +4.48% | +389.42 |
| DB GOLD DBL SH ETN (DZZ) | -7.64% | -663.79 |
| DB GOLD DBL LG ETN (DGP) | +9.55% | +830.07 |
| Semiconductor Sector (index) | +1.42% | +123.41 |
| ULTRA SEMICONDUCTORS (USD) | +2.66% | +231.60 |
| ULTRASHORT SEMICONDU (SSG) | -1.67% | -145.51 |
| ISHARE DJ FIN SC INX (IYF) | -0.28% | -24.57 |
| ISHARES LEHMAN 20 YR (TLT) | -0.24% | -20.87 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.09% | -8.15 |
| ISHARES LEH AGG FD (AGG) | -0.18% | -15.63 |
| ISHARES GS $ INVESTO (LQD) | +0.24% | +20.46 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.13% | -11.28 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.56% | +48.30 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | +0.87% | +75.88 |
| SHORT QQQ PROSHARES (PSQ) | +0.35% | +30.32 |
| SHRT DOW30 PROSHARES (DOG) | -0.64% | -55.65 |
| SHRT S& P500 PROSHRS (SH) | -1.01% | -87.37 |
| SHRT MC400 PROSHARES (MYY) | -2.68% | -232.68 |
| SHORT SMALLCAP600 PR (SBB) | -2.02% | -175.67 |
| SHORT RUSSELL2000 PR (RWM) | -2.26% | -196.04 |
| PT UTLRSHRT QQQ PS (QID) | +0.24% | +20.72 |
| PT ULTRSHRT DOW30 PS (DXD) | -1.12% | -97.20 |
| PT ULTRSHRT SP500 PS (SDS) | -1.87% | -162.84 |
| PT ULTRSHR MC400 PS (MZZ) | -5.35% | -465.26 |
| ULTRASHORT SMALLCAP6 (SDD) | -3.30% | -287.21 |
| ULTRASHORT RUSSELL20 (TWM) | -4.17% | -362.70 |
| PST ULSHT RSL1K VALU (SJF) | -2.75% | -239.41 |
| PST ULSHT RSL1K GR (SFK) | -3.70% | -321.93 |
| PST ULSHT RSL MC VAL (SJL) | -3.05% | -265.01 |
| PST ULSHT RSL MC GR (SDK) | -4.43% | -385.44 |
| PST ULTSHT RSL2K VAL (SJH) | -3.58% | -310.85 |
| PST ULSHT RSL2K GR (SKK) | -3.46% | -300.82 |
| ULTRASHORT BASIC MAT (SMN) | -8.91% | -774.25 |
| ULTRASHORT CONSUMER (SZK) | -0.88% | -76.56 |
| ULTRASHORT CONSUMER (SCC) | -4.28% | -371.76 |
| ULTRASHORT FINANCIAL (SKF) | +0.18% | +15.59 |
| ULTRASHORT HEALTH CA (RXD) | -1.39% | -120.95 |
| ULTRASHORT INDUSTRIA (SIJ) | -3.29% | -285.95 |
| ULTRASHORT OIL & GAS (DUG) | -9.25% | -803.58 |
| ULTRASHORT REAL ESTA (SRS) | -13.17% | -1144.94 |
| ULTRASHORT SEMICONDU (SSG) | -1.67% | -145.51 |
| ULTRASHORT TECHNOLOG (REW) | -0.56% | -48.93 |
| ULTRASHORT UTILITIES (SDP) | -3.90% | -338.62 |
| PROSHARES SHR MSCI E (EUM) | -5.88% | -511.47 |
| PROSHARES SHORT MSCI (EFZ) | -2.46% | -213.71 |
| PROSHARES ULTRASHORT (EFU) | -5.00% | -434.76 |
| PROSHARES UTLRASHORT (EEV) | -12.06% | -1048.10 |
| PROSHARES US MSCI JP (EWV) | -4.15% | -361.08 |
| PROSHARES ULTRASHORT (FXP) | -13.41% | -1165.74 |
| ULTRA QQQ PROSHARES (QLD) | -0.11% | -9.47 |
| ULTRA DOW30 PROSHRS (DDM) | +1.51% | +131.44 |
| ULTRA S& P500 PROSHRS (SSO) | +1.93% | +168.05 |
| ULTRA MC400 PROSHRS (MVV) | +5.43% | +471.59 |
| PROSH ULTRA SMALLCAP (SAA) | +4.49% | +390.28 |
| ULTRA RUSSELL2000 PR (UWM) | +4.23% | +367.99 |
| PST ULT RUS1000 VAL (UVG) | +3.02% | +262.20 |
| PST ULT RSL1000 GR (UKF) | +3.60% | +312.87 |
| PST ULT RSL MC VALU (UVU) | +4.04% | +351.47 |
| PST ULT RSL MC GR PS (UKW) | +5.19% | +450.83 |
| PST ULT RSL2000 VALU (UVT) | +4.73% | +411.23 |
| PST ULT RSL2000 GR (UKK) | +4.17% | +362.56 |
| ULTRA BASIC MATERIAL (UYM) | +9.86% | +856.54 |
| ULTRA CONSUMER GOODS (UGE) | +1.46% | +127.07 |
| ULTRA CONSUMER SERVI (UCC) | +4.18% | +363.26 |
| ULTRA FINANCIALS PRO (UYG) | -0.80% | -69.42 |
| ULTRA HEALTH CARE PR (RXL) | +1.73% | +150.23 |
| ULTRA INDUSTRIALS PR (UXI) | +1.39% | +120.43 |
| ULTRA OIL & GAS PROS (DIG) | +9.67% | +840.29 |
| ULTRA REAL ESTATE PR (URE) | +16.64% | +1445.96 |
| ULTRA SEMICONDUCTORS (USD) | +2.66% | +231.60 |
| ULTRA TECHNOLOGY PRO (ROM) | +0.23% | +19.65 |
| ULTRA UTILITIES PROS (UPW) | +3.20% | +278.14 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -1.14% | -98.83 |
| POWERSHARES DB BASE (BOM) | -3.09% | -268.41 |
| POWERSHARES DB BASE (BDD) | +5.58% | +484.78 |
| POWERSHARES DB BASE (BOS) | -0.65% | -56.49 |
| POWERSHARES DB CRUDE (DTO) | -4.07% | -353.52 |
| POWERSHARES DB CRUDE (SZO) | -2.67% | -232.23 |
| POWERSHARES DB CRUDE (DXO) | +2.18% | +189.63 |
| POWERSHARES DB CRUDE (OLO) | -0.89% | -77.60 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +3.14% | +273.08 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -3.44% | -298.87 |
| Direxion Small Cap Bull 3x Shares (TNA) | +6.70% | +582.53 |
| Direxion Small Cap Bear 3x Shares (TZA) | -6.74% | -585.43 |
| Direxion Energy Bull 3x Shares (ERX) | +15.38% | +1337.13 |
| Direxion Energy Bear 3x Shares (ERY) | -13.05% | -1134.45 |
| Direxion Financial Bull 3x Shares (FAS) | +0.62% | +53.67 |
| Direxion Financial Bear 3x Shares (FAZ) | +0.98% | +85.17 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Tuesday, December 09, 2008
Negative Interest Rates Imply Trust in Government (Only)
Negative interest rates. Yes, traders decided Tuesday they would like to loan money to the government for three months and pay the government for the privilege. So, interest rates on 3-month Treasury bills went below zero for the first time since 1941. This is a strong vote of "no confidence" in the economy. However, it was a vote of confidence in government.
Crooked Politician Of the Day
"No confidence" in politicians was also evident, as the governor of Illinois got caught with his hands in the till asking for bribes to name a successor to Barack Obama's Senate seat.
US Guaranteeing Chinese Bonds
Now, the US government is backing bonds issued by Chinese banks. According to Reuters, the Federal Deposit Insurance Corp is backing at least half a Billion Dollars' worth of bonds issued by Hong Kong & Shanghai Bank's USA subsidiary (HSBC USA). The communist country's central bank owns more US Treasury bonds than any other country, so it was inevitable that our government would be forced to back their bonds, eventually. Those who have the gold make the rules.
Has the Stock Market Bottomed?
All the talk on Wall Street is about whether the market has bottomed yet or not. When you have that kind of rampant bullish sentiment, combined with the fact that the credit crisis just continues without resolution, makes you realize that nothing has changed despite all the sound, fury and Trillions of Dollars printed and given to the banks. The stock market recently rallied 21%, which causes the media talking heads to declare a "new bull market." They were never very good with figures, of course, and such a static statistic makes no sense because it does not take into account volatility, which is at historic highs. The economy continues to decline and remains literally years away from a real bottom.
That doesn't mean we won't have a big bear market rally, of course. In fact, in 2001, we had a big bear market rally that convinced almost everyone that the bear market was over (it wasn't). We are due for one of those monsters soon. Just don't mistake it for the real thing.
One thing to watch out for is that light at the end of the tunnel, which is more likely to be the headlight of a freight train bearing down on you. Governments have printed money like there's no tomorrow, but according to the Bank for International Settlements:
"The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened."
The risk is government insolvency. Don't rule it out despite negative interest rates which say traders only trust the government to make good on its obligations. If trust runs out for the government, all hell will break loose in the markets.
Stocks slipped in light volume trading Tuesday:
Change From 8 Dec 2008 To 9 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | -2.72% | -242.85 |
| DIAMONDS TRUST SER 1 (DIA) | -2.26% | -201.50 |
| ULTRA DOW30 PROSHRS (DDM) | -4.34% | -387.74 |
| PT ULTRSHRT DOW30 PS (DXD) | +4.28% | +382.48 |
| S&P 500 (index) | -2.23% | -199.66 |
| S& P DEP RECEIPTS (SPY) | -1.65% | -147.27 |
| ULTRA S& P500 PROSHRS (SSO) | -3.69% | -329.42 |
| PT ULTRSHRT SP500 PS (SDS) | +3.48% | +310.69 |
| NYSE Composite (index) | -2.08% | -185.70 |
| ISHARES NYSE CMP IDX (NYC) | -1.64% | -146.49 |
| S&P SmallCap 600 (index) | -3.06% | -273.06 |
| PROSH ULTRA SMALLCAP (SAA) | -5.35% | -477.86 |
| SHORT SMALLCAP600 PR (SBB) | +3.49% | +312.12 |
| ULTRASHORT SMALLCAP6 (SDD) | +4.19% | +374.49 |
| Russell 2000 (index) | -3.26% | -290.83 |
| ISHARE RUS 2000 INDX (IWM) | -3.10% | -276.52 |
| ULTRA RUSSELL2000 PR (UWM) | -5.58% | -498.17 |
| ULTRASHORT RUSSELL20 (TWM) | +5.42% | +484.17 |
| NASDAQ-100 (index) | -0.98% | -87.51 |
| POWERSHARES QQQ TR 1 (QQQQ) | -0.23% | -20.79 |
| ULTRA QQQ PROSHARES (QLD) | -0.79% | -70.83 |
| PT UTLRSHRT QQQ PS (QID) | +0.31% | +28.05 |
| S&P MidCap 400 (index) | -2.60% | -232.04 |
| ISHARE SP MC 400 INX (IJH) | -2.34% | -208.77 |
| ULTRA MC400 PROSHRS (MVV) | -4.78% | -427.25 |
| PT ULTRSHR MC400 PS (MZZ) | +4.48% | +399.93 |
| GREENHAVEN CONT IDX (GCC) | -1.65% | -147.03 |
| Amex Gold (index) | +0.45% | +40.21 |
| MKT VECT GOLD MNRS (GDX) | +0.59% | +53.05 |
| STREETTRACKS GOLD TR (GLD) | +0.17% | +15.24 |
| DB GOLD DBL SH ETN (DZZ) | -0.34% | -30.41 |
| DB GOLD DBL LG ETN (DGP) | +0.64% | +56.83 |
| Semiconductor Sector (index) | +4.84% | +432.70 |
| ULTRA SEMICONDUCTORS (USD) | +9.13% | +815.48 |
| ULTRASHORT SEMICONDU (SSG) | -7.59% | -678.01 |
| ISHARE DJ FIN SC INX (IYF) | -4.45% | -397.32 |
| ISHARES LEHMAN 20 YR (TLT) | +1.98% | +176.67 |
| ISHARESLEHMAN 7-10YR (IEF) | +0.85% | +76.02 |
| ISHARES LEH AGG FD (AGG) | +0.94% | +83.77 |
| ISHARES GS $ INVESTO (LQD) | +0.68% | +60.63 |
| ISHARES LEHMAN 1-3YR (SHY) | +0.31% | +27.48 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | -1.74% | -155.80 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -3.42% | -305.41 |
| SHORT QQQ PROSHARES (PSQ) | +0.17% | +15.03 |
| SHRT DOW30 PROSHARES (DOG) | +2.23% | +198.82 |
| SHRT S& P500 PROSHRS (SH) | +1.89% | +169.19 |
| SHRT MC400 PROSHARES (MYY) | +2.17% | +194.22 |
| SHORT SMALLCAP600 PR (SBB) | +3.49% | +312.12 |
| SHORT RUSSELL2000 PR (RWM) | +2.96% | +264.59 |
| PT UTLRSHRT QQQ PS (QID) | +0.31% | +28.05 |
| PT ULTRSHRT DOW30 PS (DXD) | +4.28% | +382.48 |
| PT ULTRSHRT SP500 PS (SDS) | +3.48% | +310.69 |
| PT ULTRSHR MC400 PS (MZZ) | +4.48% | +399.93 |
| ULTRASHORT SMALLCAP6 (SDD) | +4.19% | +374.49 |
| ULTRASHORT RUSSELL20 (TWM) | +5.42% | +484.17 |
| PST ULSHT RSL1K VALU (SJF) | +5.79% | +517.53 |
| PST ULSHT RSL1K GR (SFK) | +3.54% | +316.47 |
| PST ULSHT RSL MC VAL (SJL) | +3.21% | +286.90 |
| PST ULSHT RSL MC GR (SDK) | +2.31% | +206.69 |
| PST ULTSHT RSL2K VAL (SJH) | +5.24% | +468.09 |
| PST ULSHT RSL2K GR (SKK) | +4.32% | +385.80 |
| ULTRASHORT BASIC MAT (SMN) | -0.54% | -48.44 |
| ULTRASHORT CONSUMER (SZK) | +4.78% | +426.82 |
| ULTRASHORT CONSUMER (SCC) | +5.43% | +485.09 |
| ULTRASHORT FINANCIAL (SKF) | +8.78% | +784.46 |
| ULTRASHORT HEALTH CA (RXD) | +4.13% | +368.98 |
| ULTRASHORT INDUSTRIA (SIJ) | +6.09% | +543.73 |
| ULTRASHORT OIL & GAS (DUG) | -0.33% | -29.79 |
| ULTRASHORT REAL ESTA (SRS) | +12.79% | +1142.72 |
| ULTRASHORT SEMICONDU (SSG) | -7.59% | -678.01 |
| ULTRASHORT TECHNOLOG (REW) | -0.73% | -65.16 |
| ULTRASHORT UTILITIES (SDP) | +2.67% | +238.24 |
| PROSHARES SHR MSCI E (EUM) | +0.73% | +65.48 |
| PROSHARES SHORT MSCI (EFZ) | +0.85% | +75.77 |
| PROSHARES ULTRASHORT (EFU) | +0.85% | +76.13 |
| PROSHARES UTLRASHORT (EEV) | +4.13% | +369.08 |
| PROSHARES US MSCI JP (EWV) | +0.25% | +22.38 |
| PROSHARES ULTRASHORT (FXP) | +4.33% | +387.16 |
| ULTRA QQQ PROSHARES (QLD) | -0.79% | -70.83 |
| ULTRA DOW30 PROSHRS (DDM) | -4.34% | -387.74 |
| ULTRA S& P500 PROSHRS (SSO) | -3.69% | -329.42 |
| ULTRA MC400 PROSHRS (MVV) | -4.78% | -427.25 |
| PROSH ULTRA SMALLCAP (SAA) | -5.35% | -477.86 |
| ULTRA RUSSELL2000 PR (UWM) | -5.58% | -498.17 |
| PST ULT RUS1000 VAL (UVG) | -5.69% | -508.37 |
| PST ULT RSL1000 GR (UKF) | -3.43% | -306.55 |
| PST ULT RSL MC VALU (UVU) | -3.76% | -335.92 |
| PST ULT RSL MC GR PS (UKW) | -3.06% | -272.97 |
| PST ULT RSL2000 VALU (UVT) | -6.18% | -552.02 |
| PST ULT RSL2000 GR (UKK) | -3.79% | -338.64 |
| ULTRA BASIC MATERIAL (UYM) | -1.08% | -96.07 |
| ULTRA CONSUMER GOODS (UGE) | -5.00% | -446.71 |
| ULTRA CONSUMER SERVI (UCC) | -5.74% | -512.76 |
| ULTRA FINANCIALS PRO (UYG) | -8.75% | -781.41 |
| ULTRA HEALTH CARE PR (RXL) | -4.44% | -397.07 |
| ULTRA INDUSTRIALS PR (UXI) | -3.61% | -322.20 |
| ULTRA OIL & GAS PROS (DIG) | +1.35% | +120.86 |
| ULTRA REAL ESTATE PR (URE) | -16.32% | -1457.82 |
| ULTRA SEMICONDUCTORS (USD) | +9.13% | +815.48 |
| ULTRA TECHNOLOGY PRO (ROM) | +1.80% | +160.42 |
| ULTRA UTILITIES PROS (UPW) | -2.59% | -231.63 |
| Other ETFs | ||
| PS NQ100 BUYWRITE (PQBW) | -4.70% | -419.55 |
| PWRSHRS NDQ INTERNET (PNQI) | -0.30% | -26.61 |
| POWERSHARES DB BASE (BOM) | +2.86% | +255.54 |
| POWERSHARES DB BASE (BDD) | -4.38% | -391.40 |
| POWERSHARES DB BASE (BOS) | +0.68% | +60.47 |
| POWERSHARES DB CRUDE (DTO) | +5.56% | +496.46 |
| POWERSHARES DB CRUDE (SZO) | +3.40% | +303.79 |
| POWERSHARES DB CRUDE (DXO) | -9.54% | -852.27 |
| POWERSHARES DB CRUDE (OLO) | -0.10% | -8.85 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | -5.63% | -503.30 |
| Direxion Large Cap Bear 3x Shares (BGZ) | +4.55% | +406.56 |
| Direxion Small Cap Bull 3x Shares (TNA) | -8.52% | -761.40 |
| Direxion Small Cap Bear 3x Shares (TZA) | +8.41% | +751.23 |
| Direxion Energy Bull 3x Shares (ERX) | +0.44% | +38.89 |
| Direxion Energy Bear 3x Shares (ERY) | -0.58% | -51.94 |
| Direxion Financial Bull 3x Shares (FAS) | -12.63% | -1128.47 |
| Direxion Financial Bear 3x Shares (FAZ) | +8.62% | +770.52 |
Additional stock market commentary -- for subscribers only -- can be found here: Subscriber Notes (if you're reading this in plain text format or on the blog, visit the MyClues Home Page and click on "Subscriber Notes" in the Quick Links section at the top of the page).
Is Your ISP Censoring Your Email? Internet email is dying, being choked to death by spam and overzealous service providers. If you're not getting these updates via email and you should be, switch to RSS, the spam-free alternative. For instructions, just visit: http://www.marketclues.net/rss.html.
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Monday, December 08, 2008
Bear Market Rally Pushes Dow Above 9000
The bear market rally that started Friday pushed the Dow above 9000 on Monday, drawing in the bargain hunters who are afraid of missing the "bottom". Sentiment soared well into the bullish camp as short term traders got the all-clear to lean that way. Our OEX dollar-weighted call-put ratio soared to overly-bullish levels early on and stayed there into the close.
The Stealth Depression
For those who have suspected the economy has not been "right" this decade, you're absolutely right. In fact, the economy peaked in 2000 and has spent almost all of the time since in a state of recession. But, of course, you'll never see this if you look at government statistics (otherwise, known as lies).
Real Gross Domestic Product (GDP) is actually Nominal GDP less inflation. When the inflation figures are understated, the mathematics makes real GDP appear larger than it really is. The truth is that the GDP figures produced by the government are distorted by those propagandists' understatement of the real inflation rate. This is why there has been no real growth in incomes or the nation's standard of living---the economy has not been growing on a real basis this entire decade.
According to the government's own methodology used before the Reagan Administration started the "fudge the numbers" campaign, inflation has been running three to four times as high as we have been told. When this more accurate rate of inflation is subtracted from the nominal GDP figures, it's plain to see that the economy has been in recession most of the time in this decade.
This explains the anomalies we and others have noted about the behavior of the stock market over the last decade. Stock prices peaked in 2000 and are now at 1997 levels. How is it possible for the economy to have grown over the last 11 years and stock prices still be the same over that period of time? The answer is simple: the economy has not grown over that period of time on a net (after-inflation) basis.
Another curious case involves the behavior of the stock market at the end of the last recession. Normally, the stock market will bottom about six months before the end of a recession and start rising in a new bull market. Six months before the end of the last recession did not mark the start of a new bull market. Instead, the stock market continued declining for eighteen more months. If you look at the government's figures, this makes no sense---why would the stock market continue lower if the economy is growing? The answer comes when you plug in the correct inflation rate into the equation. The last recession didn't end when it was said to end---it actually ended about six months after the stock market bottomed in March 2003! In other words, the stock market was right and the economists were wrong. The stock market knows and disregards the government lies about inflation.
Following the rise in real GDP into positive territory in 2004, the economy then fell back into negative territory just about six months later. Yet, stock prices continued rising even as the economy was falling back into recession (an unrecognized, stealthy recession). You might say, why did the stock market continue higher into 2007 if the economy slipped back into negative growth during that period of time? The answer is MEW---Mortage Equity Withdrawal, which contributed enough stimulus to the economy to keep it going. We knew that MEW was providing the major share of GDP growth. What we didn't know was that the economy would have clearly been trending lower without MEW.
When the Fed pushed interest rates higher in the face of this continuing recession, did they realize that by killing MEW with higher rates they would be sending the economy deeper into recession? Or, did they choose to raise rates for whatever secret plan they were operating under in order to confiscate more wealth from the nation? The former seems reasonable, but only if they actually believed the statistics they were getting from the government. As we've pointed out many times before, only fools believe government statistics. The obvious conclusion is that the Fed is run either by fools or liars.
It's no wonder that when the subprime mortgage market hit the wall in 2007, it pushed the economy into recession. Not only did higher interest rates destroy the subprime market, they severely impaired the MEW market as well. MEW was the only thing keeping the economy moving. Without it, the underlying recession returned with a vengeance. That's why this downturn is such an insidious and dangerous recession. Very few recognized that the economy was simply moving up on fumes for three years (2004 to 2007). With no fumes, growth has not been possible to maintain.
In fact, this makes the case that we are seeing another Great Depression. But, it's not like the last Great Depression. That one was deflationary. This one has been inflationary. True, we are seeing deflation at work now with home prices coming down from bubble levels. But, on the Consumer Price Index, we aren't seeing deflation at all---it's running near 12% even though the unemployment rate is already at 12.5%. That makes this depression far more dangerous because ongoing attempts to reflate the economy in the face of an inflationary depression could easily blow up into hyperinflation.
Interesting Philosophy
Matrix Realities: a 16-minute YouTube video by Stefan Molyneux---are we just human livestock being managed by statist farmers?
The Day on Wall Street
Stocks continued the bear market rally into Monday's session. Are the insiders sending stocks up the flagpole to sell to bargain hunters?
Change From 5 Dec 2008 To 8 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +3.46% | +298.76 |
| DIAMONDS TRUST SER 1 (DIA) | +2.92% | +252.31 |
| ULTRA DOW30 PROSHRS (DDM) | +5.27% | +454.78 |
| PT ULTRSHRT DOW30 PS (DXD) | -5.76% | -497.37 |
| S&P 500 (index) | +3.46% | +298.57 |
| S& P DEP RECEIPTS (SPY) | +3.49% | +301.50 |
| ULTRA S& P500 PROSHRS (SSO) | +7.06% | +609.44 |
| PT ULTRSHRT SP500 PS (SDS) | -7.35% | -634.96 |
| NYSE Composite (index) | +4.41% | +381.20 |
| ISHARES NYSE CMP IDX (NYC) | +4.22% | +364.58 |
| S&P SmallCap 600 (index) | +4.04% | +349.27 |
| PROSH ULTRA SMALLCAP (SAA) | +8.27% | +714.41 |
| SHORT SMALLCAP600 PR (SBB) | -5.82% | -502.36 |
| ULTRASHORT SMALLCAP6 (SDD) | -8.74% | -755.01 |
| Russell 2000 (index) | +4.36% | +376.81 |
| ISHARE RUS 2000 INDX (IWM) | +4.43% | +382.13 |
| ULTRA RUSSELL2000 PR (UWM) | +9.25% | +799.02 |
| ULTRASHORT RUSSELL20 (TWM) | -8.54% | -737.25 |
| NASDAQ-100 (index) | +3.22% | +277.64 |
| POWERSHARES QQQ TR 1 (QQQQ) | +3.94% | +340.16 |
| ULTRA QQQ PROSHARES (QLD) | +7.93% | +685.19 |
| PT UTLRSHRT QQQ PS (QID) | -7.88% | -680.27 |
| S&P MidCap 400 (index) | +3.81% | +328.86 |
| ISHARE SP MC 400 INX (IJH) | +4.16% | +359.59 |
| ULTRA MC400 PROSHRS (MVV) | +7.73% | +667.32 |
| PT ULTRSHR MC400 PS (MZZ) | -7.88% | -680.25 |
| GREENHAVEN CONT IDX (GCC) | +4.61% | +397.89 |
| Amex Gold (index) | +7.86% | +678.85 |
| MKT VECT GOLD MNRS (GDX) | +8.74% | +754.62 |
| STREETTRACKS GOLD TR (GLD) | +2.25% | +194.68 |
| DB GOLD DBL SH ETN (DZZ) | -3.95% | -341.31 |
| DB GOLD DBL LG ETN (DGP) | +4.43% | +382.38 |
| Semiconductor Sector (index) | +1.86% | +160.99 |
| ULTRA SEMICONDUCTORS (USD) | +3.69% | +318.22 |
| ULTRASHORT SEMICONDU (SSG) | -5.09% | -439.52 |
| ISHARE DJ FIN SC INX (IYF) | +5.74% | +495.24 |
| ISHARES LEHMAN 20 YR (TLT) | -0.22% | -18.76 |
| ISHARESLEHMAN 7-10YR (IEF) | -0.38% | -32.54 |
| ISHARES LEH AGG FD (AGG) | -0.13% | -11.30 |
| ISHARES GS $ INVESTO (LQD) | +1.03% | +89.29 |
| ISHARES LEHMAN 1-3YR (SHY) | -0.14% | -12.24 |
| ProShares ETFs | ||
| PROSHARES ULTRASHORT LEHMAN 7-10 (PST) | +0.73% | +62.82 |
| PROSHARES ULTRASHORT LEHMAN 20YR (TBT) | -0.50% | -43.08 |
| SHORT QQQ PROSHARES (PSQ) | -4.11% | -354.72 |
| SHRT DOW30 PROSHARES (DOG) | -3.10% | -267.29 |
| SHRT S& P500 PROSHRS (SH) | -3.56% | -307.49 |
| SHRT MC400 PROSHARES (MYY) | -3.81% | -329.38 |
| SHORT SMALLCAP600 PR (SBB) | -5.82% | -502.36 |
| SHORT RUSSELL2000 PR (RWM) | -4.41% | -380.77 |
| PT UTLRSHRT QQQ PS (QID) | -7.88% | -680.27 |
| PT ULTRSHRT DOW30 PS (DXD) | -5.76% | -497.37 |
| PT ULTRSHRT SP500 PS (SDS) | -7.35% | -634.96 |
| PT ULTRSHR MC400 PS (MZZ) | -7.88% | -680.25 |
| ULTRASHORT SMALLCAP6 (SDD) | -8.74% | -755.01 |
| ULTRASHORT RUSSELL20 (TWM) | -8.54% | -737.25 |
| PST ULSHT RSL1K VALU (SJF) | -7.66% | -661.58 |
| PST ULSHT RSL1K GR (SFK) | -6.95% | -600.39 |
| PST ULSHT RSL MC VAL (SJL) | -7.69% | -663.87 |
| PST ULSHT RSL MC GR (SDK) | -9.38% | -809.99 |
| PST ULTSHT RSL2K VAL (SJH) | -6.89% | -595.36 |
| PST ULSHT RSL2K GR (SKK) | -10.74% | -927.25 |
| ULTRASHORT BASIC MAT (SMN) | -17.44% | -1506.37 |
| ULTRASHORT CONSUMER (SZK) | -3.62% | -312.67 |
| ULTRASHORT CONSUMER (SCC) | -3.00% | -258.72 |
| ULTRASHORT FINANCIAL (SKF) | -12.53% | -1081.82 |
| ULTRASHORT HEALTH CA (RXD) | -8.48% | -732.16 |
| ULTRASHORT INDUSTRIA (SIJ) | -9.20% | -794.78 |
| ULTRASHORT OIL & GAS (DUG) | -9.49% | -819.71 |
| ULTRASHORT REAL ESTA (SRS) | -18.33% | -1582.68 |
| ULTRASHORT SEMICONDU (SSG) | -5.09% | -439.52 |
| ULTRASHORT TECHNOLOG (REW) | -9.62% | -830.94 |
| ULTRASHORT UTILITIES (SDP) | -1.74% | -150.47 |
| PROSHARES SHR MSCI E (EUM) | -6.25% | -540.10 |
| PROSHARES SHORT MSCI (EFZ) | -4.60% | -397.18 |
| PROSHARES ULTRASHORT (EFU) | -8.64% | -746.04 |
| PROSHARES UTLRASHORT (EEV) | -14.63% | -1262.98 |
| PROSHARES US MSCI JP (EWV) | -9.36% | -808.06 |
| PROSHARES ULTRASHORT (FXP) | -16.50% | -1424.97 |
| ULTRA QQQ PROSHARES (QLD) | +7.93% | +685.19 |
| ULTRA DOW30 PROSHRS (DDM) | +5.27% | +454.78 |
| ULTRA S& P500 PROSHRS (SSO) | +7.06% | +609.44 |
| ULTRA MC400 PROSHRS (MVV) | +7.73% | +667.32 |
| PROSH ULTRA SMALLCAP (SAA) | +8.27% | +714.41 |
| ULTRA RUSSELL2000 PR (UWM) | +9.25% | +799.02 |
| PST ULT RUS1000 VAL (UVG) | +6.69% | +577.64 |
| PST ULT RSL1000 GR (UKF) | +7.37% | +636.25 |
| PST ULT RSL MC VALU (UVU) | +6.76% | +583.80 |
| PST ULT RSL MC GR PS (UKW) | +9.40% | +811.83 |
| PST ULT RSL2000 VALU (UVT) | +6.59% | +568.70 |
| PST ULT RSL2000 GR (UKK) | +8.79% | +759.33 |
| ULTRA BASIC MATERIAL (UYM) | +17.72% | +1530.33 |
| ULTRA CONSUMER GOODS (UGE) | +2.86% | +246.73 |
| ULTRA CONSUMER SERVI (UCC) | +4.74% | +409.12 |
| ULTRA FINANCIALS PRO (UYG) | +12.27% | +1059.99 |
| ULTRA HEALTH CARE PR (RXL) | +2.15% | +185.42 |
| ULTRA INDUSTRIALS PR (UXI) | +7.46% | +644.56 |
| ULTRA OIL & GAS PROS (DIG) | +7.25% | +626.49 |
| ULTRA REAL ESTATE PR (URE) | +18.02% | +1556.21 |
| ULTRA SEMICONDUCTORS (USD) | +3.69% | +318.22 |
| ULTRA TECHNOLOGY PRO (ROM) | +8.28% | +714.60 |
| ULTRA UTILITIES PROS (UPW) | +1.85% | +160.17 |
| Other ETFs | ||
| POWERSHARES DB BASE (BOM) | -5.61% | -484.23 |
| POWERSHARES DB BASE (BDD) | +9.37% | +809.57 |
| POWERSHARES DB BASE (BOS) | -4.01% | -346.02 |
| POWERSHARES DB BASE (BDG) | +5.04% | +435.40 |
| POWERSHARES DB CRUDE (DTO) | -6.65% | -574.15 |
| POWERSHARES DB CRUDE (SZO) | -3.82% | -329.94 |
| POWERSHARES DB CRUDE (DXO) | +19.22% | +1659.36 |
| POWERSHARES DB CRUDE (OLO) | +9.67% | +835.38 |
| 300% Leverage ETFs | ||
| Direxion Large Cap Bull 3x Shares (BGU) | +11.14% | +962.36 |
| Direxion Large Cap Bear 3x Shares (BGZ) | -9.35% | -807.51 |
| Direxion Small Cap Bull 3x Shares (TNA) | +13.11% | +1131.83 |
| Direxion Small Cap Bear 3x Shares (TZA) | -12.98% | -1120.52 |
| Direxion Energy Bull 3x Shares (ERX) | +13.11% | +1131.90 |
| Direxion Energy Bear 3x Shares (ERY) | -14.00% | -1208.96 |
| Direxion Financial Bull 3x Shares (FAS) | +17.71% | +1529.02 |
| Direxion Financial Bear 3x Shares (FAZ) | -17.20% | -1485.10 |
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· Quarter-Hourly Chart Comments
· Detailed Comments . . . .
Sunday, December 07, 2008
1,256,000 Jobs Lost In Three Months
CNBC Calls It a "Greater Recession"---We Call It Another "Great Depression"
The government reported Friday that more than 500,000 jobs were lost last month. And, they revised prior months' job losses sharply higher as well---1,256,000 jobs have been lost since September. The true unemployment rate rose to 12½% from last month's 11.8% rate, up from just 8.4% one year ago (the headline number your media mouthpieces undoubtedly quoted you is not comparable to historical unemployment statistics and understates the real unemployment rate, so we use the real figure which can be found in the appendix to the official government report).
Note that the unemployment rate has now reached the halfway point to the 25% level reached in the last Great Depression.
In addition, the economy's leading indicators continue to point toward a worsening of the recession. Lakshman Achuthan, managing director at ECRI, was quoted by Reuters as saying, "The recession will deepen further in the coming months."
At the same time, a strange mixture of inflation and deflation is characterizing this recession. While home and energy prices continue to tumble lower, inflation remains high for many consumer goods. According to the Shadow Government Statistics site, the overall inflation rate remains in the double-digit range, currently almost 12%. The government continues to understate inflation to keep Social Security payments down.
This deliberate understatement of inflation also allows government to confiscate most of your investment returns. As an example, let's say you have an investment on which you made a 20% profit in one year. The government would immediately take a share of that as capital gains tax. However, if inflation over that year was 12%, your real return was only 8%, but the tax is assessed on the inflated return. You might end up with less than a 6% gain on that nominal 20% profit.
Of course, if you made less than about a 16% return, you have no real profit at all and the government would then take away some of your capital as tax. That's confiscation of your wealth by government---at work in America today.
Oil Speculation
Remember, it was just a few months ago when oil was hitting $147/barrel? Prices have fallen 72% since then, hitting $40/barrel on Friday. This is entirely a result of excessive speculation and the sensitivity of oil prices to the delicately-balanced supply-demand equation in that market. Prices were so high that they contributed to the current financial crisis. Now that they are so low, they are defeating alternatives to oil, just as history proves they have done. Our society will pay a high price in the future if we allow low oil prices to defeat development of the alternatives we know we need.
This is yet another "free market" which is wrecking our economy. First we had fraudulent lending to subprime borrowers, then we had huge swings in oil prices. This "double-whammy" is creating massive problems in the economy. This is not the way a stable economy is supposed to operate. It's time the next Administration starts the process to fix these problems caused by free markets. One group which is leading the charge is StopOilSpeculators.com.
Bargain Hunters Gone Wild
Stocks soared in a bear market rally Friday on the worst Employment Report since 1974. This "strange" reaction was undoubtedly due to the idea that the government will be quickly passing another bailout package for the economy. The rumor was that it would be a $2 Trillion stimulus package. This is typical of a deep bear market to rally on bad news. It's one sign that the bear market in stocks is still alive and well.
Change From 4 Dec 2008 To 5 Dec 2008
| Security | Percentage Change | Change in Dow Industrials Points |
|---|---|---|
| Dow Industrials (index) | +3.09% | +259.18 |
| DIAMONDS TRUST SER 1 (DIA) | +3.40% | +285.08 |
| ULTRA DOW30 PROSHRS (DDM) | +7.14% | +597.90 |
| PT ULTRSHRT DOW30 PS (DXD) | -6.94% | -581.26 |
| S&P 500 (index) | +3.65% | +305.73 |
| S& P DEP RECEIPTS (SPY) | +3.08% | +258.26 |
| ULTRA S& P500 PROSHRS (SSO) | +7.09% | +593.70 |
| PT ULTRSHRT SP500 PS (SDS) | -7.01% | -587.56 |
| NYSE Composite (index) | +3.23% | +270.53 |
| ISHARES NYSE CMP IDX (NYC) | +3.11% | +260.46 |
| S&P SmallCap 600 (index) | +4.32% | +361.90 |
| PROSH ULTRA SMALLCAP (SAA) | +8.35% | +699.19 |
| SHORT SMALLCAP600 PR (SBB) | -3.29% | -275.73 |
| ULTRASHORT SMALLCAP6 (SDD) | -7.16% | -599.87 |
| Russell 2000 (index) | +4.91% | +410.87 |
| ISHARE RUS 2000 INDX (IWM) | +4.63% | +387.82 |
| ULTRA RUSSELL2000 PR (UWM) | +8.07% | +676.34 |
| ULTRASHORT RUSSELL20 (TWM) | -9.29% | -778.27 |
| NASDAQ-100 (index) | +4.44% | +372.26 |
| POWERSHARES QQQ TR 1 (QQQQ) | +4.06% | +340.35 |
| ULTRA QQQ PROSHARES (QLD) | +8.03% | +672.21 |
| PT UTLRSHRT QQQ PS (QID) | -7.87% | -658.96 |
| S&P MidCap 400 (index) | +4.81% | +402.53 |
| ISHARE SP MC 400 INX (IJH) | +4.10% | +343.82 |
| ULTRA MC400 PROSHRS (MVV) | +8.75% | +733.29 |
| PT ULTRSHR MC400 PS (MZZ) | -8.49% | -711.03 |
| GREENHAVEN CONT IDX (GCC) | -2.03% | -170.35 |
| Amex Gold (index) | +0.88% | +73.78 |
| MKT VECT GOLD MNRS (GDX) | -0.81% | -67.95 |
| STREETTRACKS GOLD TR (GLD) | -1.30% | -108.73 |
| DB GOLD DBL SH ETN (DZZ) | +2.40% | +201.38 |
| DB GOLD DBL LG ETN (DGP) | -3.21% | -269.24 |
| Semiconductor Sector (index) | +3.17% | +265.68 |
| ULTRA SEMICONDUCTORS (USD) | +5.48% | +458.77 |
| ULTRASHORT SEMICONDU (SSG) | -6.77% | -567.13 |
| ISHARE DJ FIN SC INX (IYF) | +8.10% | +678.46 |
| ISHARES LEHMAN 20 YR (TLT) | -1.62% | -135.75 |
| ISHARESLEHMAN 7-10YR ( |