WSW – Wednesday, 15 December 2010

General Comment

I’m probably going to break this type of posting up a bit more. It’s become large enough that I’m slow about making a new one. What I’ll most likely do is split out the “fast charts” from the slower ones, and that way the longer duration context can just stay a link inside the faster, and shorter, postings.

I’m also going to segregate the “Trader Talk” from the “Investors Corner” and see how that goes. I don’t think I’ll get all that done in this posting, but watch for the change in future postings. I had been trying little “snippets”. Short postings as things happened; and those seemed to work OK too. We’ll see.

So, in the last month, we’ve had China get worried about inflation and we’ve had The Fed basically do nothing while saying they were doing everything needed. Markets have entered the Holiday Doldrums and about the most exciting thing has been the plunge of the Long Bond (where some time back I’d said I was going into TBT – the fund that will short-sell bonds for you, so it makes money as they drop. That’s been a nice trade, and likely will be for months and maybe years to come. The Fed doesn’t raise rates from “near zero” to 12% overnight. It takes years for the inflation to build up.)

Oh, and the Democrats have offered up a “Last Minute Don’t-bother-to-read-it Spending Bill” of 1900+ pages with about 1.1 $Trillion of “porkulus” in it. Gee, I wonder why bond yields are rising and bond prices are dropping… Gotta love that TBT right now.

We’ve also had a bit of the usual Christmas Retail Ralley, but it’s been marred by things like Best Buy having bad things to say about TV sales. Let’s see: We’re out of work and the government is spending all our money. There’s a tax hike that we’ve only JUST avoided, but maybe not for long, possibly. We’ve got a major hike in insurance costs coming (thanks to “ObamaCare”) IFF you can hang on to your insurance. And the Chinese are eating our lunch economically. Sounds like a great time to go spend money on a Chinese TV…

The only really good news is “We’re Not Dead YET. We’re Getting Better!”…

Pointer To Other Topics

If you are expecting global warming stuff, it’s under the “AGW” categories in the right hand margin. Things specific to the NCDC data and GIStemp are under categories with those in their names.

This posting is about the other thing I do, looking at investment markets. Prior postings in this series are available here: https://chiefio.wordpress.com/category/wall-street-week/

Posts with some relevance to trades, but not in the format of a full WSW analysis, are available under this category:
https://chiefio.wordpress.com/category/economics-trading-and-money/

The Nature of the Charts Here

The charts in this posting are live charts, so my comments will describe how it is now, but in a week it will be showing new data and a new week. Since I think it is more important to be in touch with what the market is doing NOW than to preserve the historical chart, this is, IMHO, a reasonable choice. Just don’t be surprised if the chart I describe is not the one you see a few weeks from now! If you would like to see the historical chart, you may enter custom date ranges on the charting tool at www.bigcharts.com

Wall Street Week – Wednesday, December 15, 2010

Some Calendar Issues

We have the “End of Year” coming in about 2 weeks, along with an options expiration, and the Christmas Holiday (that has it’s own odd impacts). Often there is an end of year “Christmas Rally” and retail stocks often get a ‘lift’. We’ll see.

Typically about this time things start to go flat as the major money traders step away from the table for a long winter holiday. The most interesting thing about it, to me, is you can see what the market is like with all the “big boys” not flinging things around.

I’ve bolded a bit here… Two postings back I’d said:

Finally, we are 2 years into this “crash”. At about 2 1/2 years things start to recover (in most years). About then, The Fed starts to raise interest rates. This is not always good for markets. It’s a race condition between the good economic performance (that lets rate hikes happen) and the depressive impacts from higher rates on things like comparative rates of return on investments. That means we need to start watching bond rates more closely and remembering that whenever The Fed starts to raise rates, Bonds (and Bond Funds even more so) drop in value. You don’t want to be the last one out the door when that starts.

That trend is already in place. The Fed didn’t raise rates, but it was clear that the time of dropping is over and they are preparing for That Day. Add in the Spendulus Bill and, well, TBT is off and running.

The Dollar Lately

Time to measure our Rubber Ruler. Oddly, this week has the dollar rising. But all the pundits are saying not to celebrate as it’s mostly just the Euro tanking. In any case, a pile of money is sloshing around looking for a place to park, and seems to be landing in dollars. With that in mind, I’m swapping this chart over to being UUP the “Dollar UP’ bet ticker (though I’m going to leave the UDN chart in as well for comparison). The UUP chart will be a One Year chart so you can see the context better (at the expense of less emphasis on recent trend).

Last posting I’d said:

Note that I’ve added TBT, the bond “short” to the top graph. I’ve got some, and expect to have more. It’s likely to be a good “ride” for a year or so, depending on how much The Fed has to raise interest rates to quell the inflation it is sowing now, it could be a spectacular ride for a few years.

And I did add more. In that short “dip” in the chart for that blue line at the end of November. This will be ‘the gift that keeps on giving’ if / when The Fed starts to raise rates. Right now it looks like the peaks tends to land mid-month and the ‘dips’ at the end, so it’s probably better to wait for a ‘dip’ to add new positions. If you don’t like timing with charts, you can “scale in” with weekly small buys so as to smooth out the dip / spike process.

One Year Daily of UUP Dollar UP, with TBT and selected currencies

One Year Daily of UUP Dollar UP, with TBT and selected currencies

The indicators on this chart show the dollar as basically ‘trendless’ with a small positive bias at the moment. So it’s likely and OK place to park short term money. The Swiss Franc looks a bit better IMHO, but not enough to be worth trading at the moment. With other currencies ‘having worries’ that’s all it takes to get global cash flowing into US Dollars.

A 6 months chart of UDN Dollar DOWN trade ticker. Notice that on a 6 month chart (as everthing starts at ‘zero’) some of the longer term context is lost but recent trend is emphasized. Also notice that this chart, with GLD on it, shows a flatter “Gold” trend while the above one with “Gold & Silver” index on it is still rising. That’s a clue that Silver has been having ‘out of proportion’ action lately. At any rate, for the first few months we had a good “short the dollar long anything else” trade and now it’s gone flat and with some dollar recovery at the end. But it’s that TBT that I really like…

6 Month Currencies and TBT the US Treasury "Bond Short" fund

6 Month Currencies and TBT the US Treasury "Bond Short" fund

The two most stellar features are that over a 5 month window the USD has gone nowhere and the TBT is now on a fast rise.

And here is the 10 day Euro chart, with BZF the Brazilian Real added, where you can see a bit of recent dollar strength playing out as everything else seems to drop, measured in dollars. Someone is moving money around, and into dollars. The question is why? What are THEY going to buy? Or avoid?

Currencies - 10 Day Hourly Interval chart vs US Dollar

Currencies - 10 Day Hourly Interval chart vs US Dollar

Base Metals

Last time I’d said

[Base] Metals look to have topped, so time to exit most of them. We have “failure to advance” along with a DMI red on top…

And this chart seems to confirm that call. I note two exceptions. Copper and Silver. There is a rumor running right now that some major banks are overextended and short too much silver, so folks out to buy silver to squeeze them. I generally avoid anything that has a ‘hot tip’ and ‘rumor driven’ mover. Silver has been a nice ride, but I’d step out until it’s resolved what’s going on. Only use “Vegas Money” for silver at this point. Copper is a major economic indicator. It’s back to an advance, but not much of one. Worth a closer look, but probably not the best entry right now. It will all depend on how much and when China buys.

Metals 6 month chart

Metals 6 month chart

Base metals are looking more like a ‘flat roller’ at this point. Good for “range trades”. But the dips, sell the rips. But not alot of trend there to work for a trend trade.

Ag Commodities

And Ag commodities are more mixed, with a “parabolic rise” ending in a spike down for sugar and cotton. It is now in a recovery from that. If it can’t beat that spike, it’s over for them. Last time I’d said: “Often a time to buy a bit for a ‘dead cat bounce’ trade… though it also indicates that the underlaying trend is now broken.” That was a good call, too (though I didn’t make the trade, dang it.) Only time will tell if the trend is fully broken, that that ADX line at near 20 is pretty trendless. At this point I’d step out of the ag trades and wait for confirmation of an advance from here (or at least put stop loss orders behind the positions.

As last posting as well: “The upshot of this is that your food bill is going up, farmers will be making some more money (and buying more ‘stuff’) and companies that use these things will be raising prices or cutting profits.”

Ag Commodities 6 month chart

Ag Commodities 6 month chart

The conclusion from last time hasn’t changed much:

So the dollar has taken a hit, commodity inflation is showing up in globally traded commodities (though prices have started to stabilize at their new, higher, levels…), and Your Government is still trying to decide what value to place on Your Currency…

I’d only add that it looks like the mayhem is taking time off for the holidays as things have steadied out.

Monthly Running Stocks

So what “won” and “lost” over the last month? (though remember, they may not be the winners next month… it’s just to provide ‘context’)

1-month
10 Best Performing Industries
  Industry Name	Percent Change (over time selected)  

  DJ US Platinum & Precious Metals In...	30.80%  
  DJ US Business Training & Employmen...	14.05%  
  DJ US Tires Index	14.03%  
  DJ US Home Improvement Retailers In...	11.89%  
  DJ US Heavy Construction Index	11.17%  
  DJ US Commercial Vehicles & Trucks...	11.15%  
  DJ US Furnishings Index	10.66%  
  DJ US Clothing & Accessories Index	10.62%  
  DJ US Industrial Engineering Index	10.15%  
  DJ US Footwear Index	10.10%  

Footwear, clothing, furnishing, home improvement. The “Christmas Retail” trade. Usually ends mid January, so prepare to exit… Platinum and Precious metals. Yeah, we saw that bounce. I’d be careful of that one going forward too. Tires? I wish I could get excited about tires… But last month they were among the largest losers:

  DJ US Tires Index	-11.19%  

So I’m not seeing a lot of ‘trend’ in tires. Just some bounces.

More interesting is that “Industrial Engineering”, commercial vehicles, and heavy construction. The “Spendulus Is Coming, To Town!” trade? Or does someone really think we’re about to get out of the woods here? Who’s tops in them?

  MYRG	MYR Group Inc	28.12%  	
  CIIC	China Infrastructure Inves...	19.13%  	
  INSU	Insituform Technology Inc	17.93%  	
  FWLT	Foster Wheeler AG	17.00%  

A “Grid infrastructure” company and somebody working in China… FWLT makes large power plants (probably also doing work in China.). OK, I see the pattern. Look for who’s building out the Chinese infrastructure with the best western technology… Next?

  ESSXW	Essex Rental Corporation	56.25%  	
  WNC	Wabash National Corporatio...	39.27%  	
  ARII	American Railcar Industrie...	34.46%  	
  BUCY	Bucyrus International Inc	28.60%  	
  MNTX	Manitex International Corp	26.18%  	
  CVGI	Commercial Vehicle Group	22.05%  

BUCY makes heavy earth movers (China related mining ops?). ARII for more coal rail cars to carry the coal they bought to port for China. OK… The others could use some digging. Industrial Engineering has some overlap with the first too groups, so we see some common names. Same theme, I suspect.

  ESSXW	Essex Rental Corporation	56.25%  	
  WNC	Wabash National Corporatio...	39.27%  	
  ARII	American Railcar Industrie...	34.46%  	
  BUCY	Bucyrus International Inc	28.60%  	
  FASCE	First American Scientific...	27.78%  	
  MNTX	Manitex International Corp	26.18%  	
  CVGI	Commercial Vehicle Group	22.05%  

How about the Dogs?

10 Worst Performing Industries
  Industry Name	Percent Change (over time selected)  

  DJ US Airlines Index	-4.73%  
  DJ US Speciality REITs Index	-3.80%  
  DJ US Food Retailers & Wholesalers...	-2.73%  
  DJ US Real Estate Holding & Develop...	-2.72%  
  DJ US Diversified REITs Index	-2.19%  
  DJ US Gambling Index	-1.62%  
  DJ US Tobacco Index	-1.60%  
  DJ US Nondurable Household Products...	-1.54%  
  DJ US Real Estate Investment & Serv...	-1.25%  
  DJ US Multiutilities Index	-1.08%  

Nothing down too badly. Airlines? Never own an airline, and especailly not with the TSA running security. High comodity prices are hitting the food folks (who knew ;-) Real Estate is still in the tank (not a large surprise there, it’s a bottom fishing operation at best for now). Sin Stocks droping. No money? Screw Vegas…

Overall, looks like “China Winning” vs “USA in a funk”.

Weekly Running Stocks

The best and worst of the week? Do they tell a different story on the short term trade?

10 Best Performing Industries
  Industry Name	Percent Change (over time selected)  

  DJ US Full Line Insurance Index	7.44%  
  DJ US Life Insurance Index	5.84%  
  DJ US Tires Index	5.83%  
  DJ US Banks Index	5.75%  
  DJ US Nonferrous Metals Index	4.28%  
  DJ US Waste & Disposal Services Ind...	4.05%  
  DJ US Business Training & Employmen...	3.60%  
  DJ US Consumer Finance Index	3.53%  
  DJ US Investment Services Index	3.48%  
  DJ US Specialized Consumer Services...	3.47%  

Some early signs of life in the Financials. Maybe time to think about them. A little. Or maybe it’s just a Dead Cat Bounce. Tires? Yeah, tires… Metals having a wobble. Then the short term employment firms. Not a lot of juice here.

10 Worst Performing Industries
  Industry Name	Percent Change (over time selected)  

  DJ US Gambling Index	-4.64%  
  DJ US Airlines Index	-3.69%  
  DJ US Coal Index	-2.83%  
  DJ US Retail REITs Index	-2.68%  
  DJ US Consumer Electronics Index	-2.60%  
  DJ US Restaurants & Bars Index	-2.60%  
  DJ US Mining Index	-2.48%  
  DJ US Gold Mining Index	-2.40%  
  DJ US Diversified REITs Index	-2.29%  
  DJ US Travel & Leisure Index	-2.23%  

Down ratio a little less than up, so generally small upside bias. Airlines dropping? Who knew ;-) REITS and real estate again. Restaurants and bars? Folks staying home for dinner… Ditto Travel and Leisure. That “Consumer Electronics” is likely due to Best Buy saying things were not looking so good for Christmas electronic gizmos…

Again, not picking up much of a difference in theme.

Christmas Retail

Last time I’d said:

Retail has had a nice run up, especially in the “high end” retail like TIF. Time to exit the “low end” retailers was probably a week or two ago. In an economic recovery, folks rotate OUT of “low end” retail like COST and WMT and into the higher end stores (as folks get tired of trunk loads of beans and rice and go buy a new camera… ;-)

To that I’d add that even the high end retail is starting to look a bit tired as we end the Christmas Retail trade. Coach and Tiffany are still climbing, the it’s starting to look like a flattening trend. I’d not dump it yet, but watch it more closely and use stop loss orders or protective puts.

Broad Retail Race

Broad Retail Race

Looks like Retail is back on an up trend. What about clothing in particular?

Apparel Retailers

Apparel Retailers

Last time I’d said:

Looks like the run has ended. It might just be the normal “sag” before the Christmas run up and earnings reports in January. Watch for a ‘reentry’ but don’t just sit there in it while it’s dropping.

Not seeing a lot of reason to stay in most specialty clothing retailers. Though ROST and HOTT are doing better than most.

As I said last time:

I’m in the major retailers (like Macy’s, Penny’s, Tiffany, etc.) and some specialty like HOTT Hot Topic (though not in size. Yet…)

And I’ll stay in them for long term investments, but the “trade portion” will be moved elsewhere. As before:

These are some of the ‘deep value’ stocks I picked up near the bottom. Months and months ago. They are in my spouses retirement account, so will be held for years (perhaps decades). Oh, and the 100 shares of HOTT are just because my daughter works there. Not a particularly ‘trade pick’, more a ‘want the annual report and want the kid to learn about this stuff’ holding. I’ll be holding if for a few years (as long as she works there, and she loves it so that’s likely to be a while). Don’t know what the deal is in ROST. Perhaps someone with clothes savvy could figure out what they are doing right… (Ross Stores)

Still waiting for someone with retail and fashion understanding to chime in on that retail fad / fashion stuf ;-)

Here I’m going to repeat my “retail disclaimer”:

There are so many retailers it would benefit from many more custom races, and from someone who knows fashion commenting on what’s selling and what’s not… but that person is not me, so you will get ‘the usual’ on the charts and trend following rather than trend predicting. But if you have a good eye for fashion and a hot hand at shopping, it can tell you months in advance who will have a good quarter. Yes, women especially can “make money shopping”… if they buy the stocks instead of the stockings…

So any fashion conscious women (or even Guys) would be highly appreciated if they were to make comments on, oh, the rotten ‘colors’ at one place, or the ‘so last year’ fabrics somewhere else… It’s “retail season” and I’m a fashion dud…

What Is Our Asset Class Context?

Let’s look at the S&P 500 largest stocks in America compared with some other kinds of assets; a 20 year+ maturity bond fund, oil, gold, Yen.

Asset Class Races

Asset Class Recent Race

SPY       The S&P 500 ETF
GLD       Gold ETF
USO       Oil ETF
FXY       Japanese Yen currency fund
TLT       20 Year U.S. Treasury Bond fund
FXE       Euro currency ETF
SLV       Silver fund
BZF       Brazilian currency ETF
EWA       Australia ETF
WOOD      A wood and paper products fund

So, Silver is in “Bubble Land” while bonds tank (TLT). Broad US stocks SPY are rising at a slow steady sustainable rate, and with a bit of a tradable wiggle in it. Nothing else looking very interesting, though Australia gets honorable mention for rising rapidly with nosebleed volatility…

Last time I’d said:

Silver did nicely, but that looks like a ‘failure to advance’ to me. Time to put that puppy to bed or go to faster trade times on it.

Little did I know that folks would put out a viral video promoting a ‘squeeze’ on silver. I’d still stay away or only trade on a fast chart. 10 Day Hourly. You can ride those kinds of news driven fad plays to buckets of money, but when the bubble collapses, it’s brutal.

Also from last time:

Frankly, most of this stuff looks ‘tired’ to me. Like the “stuff trade” is wearing thin and the “bugger the dollar” is running into “bugger the Euro” and “bugger the Pound” and “bugger the Yuan” and…

And over the one month interval since then, things have wobbled, but not a lot of net gain, outside of Silver and, if you timed entry and exit right, the Australian market.

At the start of December, the SPY main ticker gave an “entry” with MACD crossover to “blue on top” and DMI+ (blue) over DMI- (red). So as of now, stocks are OK. BUT notice that RSI touched 80 at the last top and is now lower at the inflection point. The main thrust of the run is over. We’re most likely going into a ‘sideways roller’ with swing trades, though there could be a minor up trend to it. Just not a lot of “rocket ride”.

Last time I’d said:

Notice that the SPY main ticker of the graph continues to show a “Be out” signal with the MACD crossover toward the downside with “red on top” just after an RSI of “near 80”. The DMI/ADX shows “blue on top” so has not confirmed this as a longer term ‘be out’, but it tends to lag. So this could just be a ‘reversion to the mean’ moment as the prices ‘kiss’ the SMA stack, or it could be worse. Move to a faster trade cycle or step out is what my rules say…

And that was exactly correct, until that entry at the end of the month. This is a good example of the importance of timing in trading. If trading a daily chart, you check it daily. If you only check it once ever month when a posting comes out, you miss the crossovers and inflections. That’s why I put live charts in the postings, so you can watch them in between new postings…

10 Day Hourly Fast Trader Chart

Trader Chart - Longs and Shorts of Index Funds  10 day hourly interval

Trader Chart - Longs and Shorts of Index Funds 10 day hourly interval

This is calling an exit from the major US indexes as of Monday – 2 days ago. For longer term, that means you look for a ‘re-entry’ soon. So you’ve got a bit of time here to decide what is next. Remember, though, that an hourly interval chart will be changing it’s mind on an hourly granularity. This isn’t an investor guide…

What about Brazil? Also India and China.

A month ago, I’d groused:

So, we’ve had a load of “crap” from Minsters of Stupidity as they have attempted to put on taxes on foreign investment (Brazil) and other kinds of exchange controls. Plus China made grumpy talk about our “bugger the dollar” behaviours. Any of that show up in the charts? Or is that dollar strength just foreign central banks buying dollars in an attempt to (relatively) bugger their currencies?

Well, since then they’ve all been dropping. Only thing interesting is that EWC Canada that keeps chugging along and EWW Mexico that’s doing OK.

Brazil the EWZ ETF vs the BZF currency ETF

Brazil ETF vs Currency Race

EWZ  - Brazil
BZF  - Brazilian Real currency
FXI  - China
EWA  - Australia
EPI  - India - WIsdom Tree fund
EWC  - Canada
EWW  - Mexico
GUR  - Middle East Fund

A bit of crowing, if you will indulge me:

Brazil has a ‘failure to advance’ with two tops of about equal height. Now DMI is ‘red on top’. Time to be gone from Brazil (probably was a while ago… wonder if anyone said to dump Brazil a month or so ago? ;-)

Yeah, I’d call that a good call.

Closeup on Gold

So when everyone is trashing their currencies, what’s left? Traditionally it’s gold. But this chart is looking a bit ‘tired’ to me too. It’s been a very long run.

Gold 1 year daily chart

Gold 1 year daily chart

Last posting I’d said:

RSI has a series of ‘lower tops’, and price has advanced peak-to-peak; but only just barely on a couple of day spike that was probably news driven, then dropped right back. I’d guess this is where some of the dollar demand is coming from. Funds and Hedge Funds moving out of gold and related (and foreign currencies) and into dollars as they, too, try to figure out “what’s next?”.

It looks like the same to me. The peaks are just a touch higher each time, but the trend is dying. Look at ADX – about 12. Paltry. The 25 day Simple Moving Average SMA line is flat. Gold may have more life in it, but I’d expect it’s more likely to roll over and drop as Christmas jewlery demand drops out. MACD is continuing to dip closer to the zero line and the ‘up runs’ with blue on top are ever shorter and harder to catch. Step away, just step away.

Loads of risk to the downside, not a lot of upside momentum.

VIX the Volatility Index

Same thing I said last time, only in spades:

Don’t like this. Don’t like it one bit. Volatility is getting rather low. When it does that, it often precedes a drop. Yeah, it could go lower still before a drop… but it’s just getting a bit too quiet in the volatility camp…

On the other side, that means it’s relatively cheap to buy “puts” to protect your positions against a drop…

Though I do have to point out that volatility often plunges duriing the holidays.

Volatility Index and Related

Volatility Index and Related

VIX  - Volatility Index (not a ticker, you can't trade it)
VXX  - Short term VIX futures ETN (a ticker you can trade)
VXZ  - Medium term VIX futures ETN (a ticker you can trade)
FXY  - Japanese Yen
SH   - "Short" sell of SPY
SPY  - S&P 500 benchmark
IYT  - Transports, a leading sector
XHB  - Homebuilders, a leading sector and "canary" 
XRT  - Retail

As VIX drops, stocks rise, but as it gets very low, we are getting late in a given ‘run’ and you can expect reversal or flat days.

Ideas of the Week

Shorting bonds. Planning for a “duck and cover” toward the end of the year… Looking for inspiration and not finding much.

Comparison of Broader Mixed Asset Classes

To some extent this chart recapitulates some of the above charts. It adds “wood” and puts some things together in the same chart, but right now, not alot of new news here. Copper, Silver and maybe some ag commodities. Hurumpf.

The 6 month asset class race:

Asset Class Race

Asset Class Race

SPY  S & P 500 US stocks
GLD  Gold
EEM  Emerging Markets
FXY  Japanese Yen
JJC  Copper
TLT  Long term bonds 20 year+
USO  U.S. Oil
DBA  Agricultural basket
SLV  Silver
WOOD  Wood / Timber

Oil And Fuels?

Well, looks like a lump of coal in the Christmas stocking is about the best we can do ;-)

USO Oil, KOL coal, UNG Nat Gas, UGA Gasoline with a Golden ruler

USO Oil, KOL coal, UNG Nat Gas, UGA Gasoline with a Golden ruler

Looks like Old King Coal is winning. Perhaps time to revisit the coal race… Our Natural Gas glut in the USA continues to keep it down at nearly nothing. At least we can burn it to stay warm… It does look “bottomed” so this is likely a good time to get some very good fuel at dirt cheap prices. So it looks to me like some coal stocks and some selected natural gas companies, along with a bit of gasoline refiners has some potential here.

USO Oil vs KOL Coal, UNG Natural Gas, and UGA Gasoline

USO Oil vs KOL Coal, UNG Natural Gas, and UGA Gasoline

Even the fast trade chart doesn’t have much happening.

Just not liking the idea of a day trade into the holidays. Too much work. Maybe that’s what is driving up the dollar. Sloth…

So what happened in the Tech Market relative to world markets?

Tech vs Other Markets

Tech vs Other Markets


QQQQ  Nasdaq 100 mostly Tech companies
DIA  Dow Jones 30 Industrials
SPY  S & P 500 largest companies in the U.S.A.
MDY  Midcap  (Middle sized in terms of market capitalization)
RUT  Russel 2000 - a collection of 2000 companies from small to large.
EWZ  Brazil fund
EWA  Australia fund
EWO  Austria fund
EWW  Mexico fund

Looks like Tech is the winner, with ‘small cap’ close behind. We’ve got the ‘misc’ foreign markest like EWO being very volatile, but the tends is flattening. Not worth the ulcers. So “Cubes” are the vehicle of chioce instead of SPY for a while.

Were Bonds a good idea?

Nope, not at all… Shorting bonds with TBT has been the best game in town.

OK, lets take a peak at the Bonds Race but with TBT (the “long term bonds” short sell ETN – that is, the thing that “shorts bonds”) as the main ticker symbol:

Bonds - TBT to Short Them

Bonds - TBT to Short Them

We’ve got a nice trend trade on in TBT. Short the bond market. That’s the major theme in Bonds for a while…

What About Oils?

Some Selected Global Oils:

The Oil Majors Race

The Oil Majors Race

XOM  Exxon Mobil - Largest, U.S. / Global
COP  Conoco Philips - U.S.  with Russian exposure
CVX  Chevron Texaco - U.S.
PBR  Petrobras - Brazil
PCZ  Petro Canada HAS NOW MERGED WITH SU SUNCOR
BP   British Petroleum
STO  Norway
E    Eni Italy
TOT  Total - France
RDSA  Royal Dutch Shell
IMO  Imperial Oil - Canada Oil and Oil Sands
SU   Suncor - Canadian Oil Sands
SSL  Sasol - South African Synthetic Oil Company

Last time I’d said:

Not a lot to warm my heart here, but as a small holding in an investment portfolio, puting some XOM and SSL (small part!) ought to work out OK.. PBR has turned into “dead money” as their Ministry Of Stupidity has killed interest in Brazil and as they have a new Socialist Leader who is less prone to leaving their markets alone that the last leader..

I’d add to that that the other Oil Majors like CVX and COP are looking well too. I need to add a chart of the oil refiners, like VLO Valero… It is looking great right now, but I need to do the whole set.

Some Near Oil and Oil Related Comparisions

What about oil service companies and Brazilian sugar / alcohol?

Oil Services and Oil Related

Oil Services and Oil Related

Well, looks like Oil Services XES is doing well. OIH is another fund of oil services. Brazil plays are tabled. Sugar is rocketing. But watch out for those air pockets!

Ag and Ag Suport / Input companies

Ag Trade 6 Month Daily Interval Mixed Players

Ag Trade 6 Month Daily Interval Mixed Players

Not looking very good right now. Guess middle of a cold winter is not a great time to be selling fertilizer and seeds. Watch this space for an early spring entry.

SEE the SEA!

Looks like shipping has topped out for the Cruise Lines and like the rest of shipping isn’t moving much yet.

Shipping Comparison

Shipping Comparison

Here is the RCL / CCL cruise lines chart. You can see how these have much more range (or “beta”) that the S&P 500 SPY fund. You can also see have after RSI touched 80, forward progress on RCL came to a halt.

Royal Caribbean Cruise Lines, Carnival C.L., and SPY S&P 500

Royal Caribbean Cruise Lines, Carnival C.L., and SPY S&P 500

The REITS race – Real Estate Investment Trusts

Last posting I’d said:

now it looks like they are rolling down into the end of year reporting cycle. I’d start watching for a chance to buy some nice dividends on this ‘dip’ as the indicators say a bottom is formed.

I continue to hold that idea, but that local re-entry bottom is being rather volatile in the forming. PLD Prologis has made a great run, but RSI is now ‘touched 80’. It’s volatile, so I’d not hang out too long…

REITS Race

REITS Race


PEI  Pennsylvania Real Estate - Mall REIT (REMOVED to make better graph)
VTR  Ventas - sr. care, nursing homes, hospitals
PSA  Public Storage - junk storage units
BXP  Boston Properties - office REIT on BosWash corridor  
HCN  Health Care REIT -  extended care, senior care, medical offices
HCP  Health Care Properties - ex. care, senior living, Dr. offices
PCL  Plum Creek Timber - lumber and trees REIT
SPY  S & P 500 broad stock market benchmark
RPT  Ramco Mall REIT
PLD  Prologis - logistics 

Conclusions and Likely Actions

Increase my TBT. Evalute the oils and refiners in a bit more depth. Do a swing trade of QQQQ based on a 10 day hourly chart. Generally mellow out for Christmas.

The Long Term Context

This is a very long duration chart (5 years) of NYSE and one of the S&P 500 (SPY). They will not change much from week to week (just one tick mark) so guides longer term attitude. I’ve moved it to the bottom as you really don’t need to look at it often.

Slow Stoch, MACD and DMI are still ‘be in’. Looks a bit ‘toppy’ to me, and I’d be careful about entering here. The pattern is looking more like a local top than a local bottom. Fit a visual curve to the tops of that price plot and it’s rolling over to flat. We’re looking at a flat or down market, per the very long term chart. But the indicators say “be in”. That configuration CAN mean a slow but steady rise in the market. I think it’s most likely just “flat for a couple of months” until the new congress is seated.

5 Years, NYSE

5 years, NYSE

Spiders (S&P 500) looks very similar. Again, the indicators are “be in, be cautious”.

SPY 5 year weekly tick, RSI, Williams %R, ROC

SPY 5 year weekly tick, RSI, Williams %R, ROC

Automated Stock Screens

OK, nobody ever said anything one way or the other about the software based stock ticker selection, so I deleting it. Now I’m figuring I can use it as part of an “investors corner” so I’m off to tune it up and bring it back up to speed…

Stock Indicators – what and how


If all this talk of indicators is leaving you wondering what the heck I’m talking about, hit the link in the heading of this paragraph and there is a bit of an explanation.

Click for Disclaimers, Disclosures, and Where To Get Charts

Remember that on any stock or ticker I say I’m looking at, you don’t just go buy it. You wait for a stock entry indication to get the best possible entry into the position.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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2 Responses to WSW – Wednesday, 15 December 2010

  1. Tim Clark says:

    Thanks EM. I read these posts avidly.

  2. E.M.Smith says:

    @Tim Clark:

    You are most welcome!

    I use them as a quick way to check market charts during the trading week. Just pop the page open and scan the set for changes from expectation.

    Saves me almost as much time as it takes to make the postings…

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