Frosty the Snowman
The market followed through on the oversold buy with a little help from Treasury Secretary
Paulson. Perception is more important than reality in stemming a panic. The Dow Jones
added 254 points and the Nasdaq NDX tacked on 40 points. Broad market indices have
now back backed to neutral territory. Unfortunately Bernanke has been more like Frosty
than Santa Claus to the markets and will likely not offer a big boost to stocks this week. At
best he can offer a floor of support to head off the liquidity crisis.
Sector Action for the week was plus 1057 with 27 sectors up and 5 down. Trends are still
negative however Tradewinds have turned the corner.
Rydex Alerts- Took profits on Bearish Russell and OTC flipping to Bullish OTC Tuesday
then taking partial profits leaving us 35% cash ahead of the FOMC meeting Tuesday.
Short term Trading indicator- Overbought. Market breadth was particularly strong last week
and may be overdone. A rest would be best.
INTERMEDIATE TERM TRENDS- Down
INTERMEDIATE OSCILLATOR- Oversold Buy Weds. November 21st now in neutral territory.
Utility UTY - Number one in overall rank which is a defensive posture. I would like to see
money coming out of utilities and going into big Tech stocks.
Ultra etf’s- You must use these bullish and bearish etfs to manage and current volatility.
Took profits on Bearish Russell TWM bought Bullish NDX QLD and Bullish Small Cap
SAA and Bullish Semi USD.
Consumer CMR- Moved up into the top ranks. The Consumer is king and under the
watchful eye of economists and market prognosticators. When will higher gas prices and
lower housing values take effect?
China CZH - Showing signs of profit taking. If anything puts an end to Chinas hyper
growth it might be ecological disaster.
Banks BKX- slipped in overall rank last week. The enormity of the mortgage problem is
not going away quickly.
Technology TXX- Google GOOG back above $700 and Microsoft MSFT has filled the
positive earnings gap and has permission to test the $37 top.
Housing HGX- Climbed out of the bottom ranks for the first time in a long time. The
builders may be able to squeeze out some profits from here but Housing prices
themselves have likely seen a 10 to 20 year high based on the Case Shiller index.
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