Thanx Vets
The trap door opened to the downside last week with the Dow Jones falling 522 points
and the Nasdaq NDX cratering 179 points. Google’s stock should have a bungie cord
picture next to it.
Sector Action for the week was minus 1114 with 1 sector up (Utilities) and 31 down.
China CZH and Gold XAU are still in steep uptrends while Banks and Semiconductors
are oversold praying for support. Buy low sell high is our motto and we are likely close to
the tops and bottoms of each.
Call Bernankes’ Congressional testimony strike three. You know you are in trouble when
the Commitee questions about a housing crise sound real and the FOMC Chairman is
squirming in his seat complaining about the possibitlity of inflation. I have yet to meet
someone who feels like they have excess cash after filling up their car with gas. Increased
oil prices take money out of economies - it does not create inflation. Governments usually
do that printing money to pay for their fiscal blunders.
Rydex Alerts- Took profits on Bullish NDX before the fall Weds and Thursday. Would have
been nice to flip short. Nibblid at long Russell on the close Friday for a bounce.
Short term Trading indicator- Oversold
INTERMEDIATE TERM TRENDS- Down
INTERMEDIATE OSCILLATOR - Oversold retest
Utilities UTY - Number one in overall rank and the only sector with a gain. We caught
some of the move with Bullish Utility etf UPW but have taken profits. I would not get too
invested in this sector unless you think the economy is going to expand.
Ultra etf’s- You must use these to manage current volatility. Currently holding Bullish
Russell UWM and Bullish Financial UYG
Oil Patch XNG, OSX and XOI - With oil approaching $100 the stocks appear to be rolling
over with prudent profit taking. Perhaps no one can afford to drive to the party with $100
oil.
Basic Materials XLB- Broke the uptrend. A sign of some recession fears.
Gold XAU- The Sell bell has not rung yet but stay close to the door.
Cisco CSCO- disappointing earnings? I didn’t think so. Buy
Banking BKX- Moved up in relative rank and price. Value players are buying. Stick with a
diversified etf or Mutual Fund. Be ready to trade the bounce and buy back in.
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