Posts related to ‘Index’

Are Inflation ETFs For You? (CPI, GRES)

Money ImageThis week marks the launch of two new exchange traded funds, both of which intend to offer investors a direct hedge against inflation.  IndexIQ introduced the IQ CPI Inflation Hedged ETF (NYSE: CPI) and also introduced the IQ ARB Global Resources ETF (NYSE: GRES).

Investors generally need to seek investment returns that outpace inflation if they want to be up net-net throughout their lives.  That being said, it will be interesting to see how these measure through time.  In theory, these could offer Joe Public more hedging instruments for or against other investments used to beat the eroding factor of inflation down the road.  One of these ETF products, the CPI trade, is very easy to factor in the moves. The other, the GRES trade, is likely to be more complex than what many retail investors may care about; and what many institutions may aim to achieve on their own.
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Posted on: October 28, 2009 – 12:48 pm in Commodities, ETF, Index, ,

Has the S&P 500 Index Peaked? (SPY)

The SPDRs (NYSE: SPY) is perhaps the most liquid of all ETF products in the world as it tracks the benchmark S&P 500 Index.  One of our affiliates has just posed the very important and developing question… Has the S&P 500 peaked? There is even a detailed audio/video presentation here showing this, and his take is that the S&P is nearing a very critical apex, or what we would call a flag or pennant.  What we see as the biggest risk to the S&P and stock market overall is that the dollar just cannot fall indefinitely, even if it can still go lower through time.
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Posted on: October 27, 2009 – 12:16 pm in Charts, ETF, Editor's Picks, Index, Technical Analysis,

The VIX Becomes Worthless (VXX, VXZ)

The CBOE Volatility Index, or the VIX, has become almost a useless barometer in the current environment.  With the VIX’s nickname being called “The Fear Index,” this is probably no huge surprise based on 50% and 60% index gains from the March 9 closing bell levels.  The VIX shows the expectation of volatility for the month ahead and is constructed using the implied volatility of a range of S&P 500 index options from both call and put contracts.
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Posted on: October 19, 2009 – 2:31 pm in ETF, Index, Options, ,

IBM Is The Key to DJIA 10,000 (JPM, INTC, IBM, DIA)

Bull and Bear ImageThe Dow Jones Industrial Average is literally within 20 points of the psychological DJIA 10,000 mark.  We have not seen Dow-10K since October, 2008, but that month we saw 11,000 and saw under 8,000 all in the same month.  JPMorgan Chase & Co. (NYSE: JPM), up over 3%, and Intel Corporation (NASDAQ: INTC), up over 2%, both DJIA components, are the two culprits that have us up to within 20 points now that the market is up over 100 points in early afternoon trading.  At 1:00 we had only 7 of the DJIA components in negative territory, and these are all down only by a few cents each.

But the biggest DJIA component is International Business Machines Corp. (NYSE: IBM), and it reports earnings tomorrow after the close.  As the DJIA is a price-weighted index, IBM is now the largest DJIA component with its $127+ price tag.  Its weighting in the index is over 9% as a result.  After Intel, it seems that you would expect a solid report.  Its services order backlog reported at the end of last quarter was a whopping $132 billion.  And many feel the bar is set low here for most large companies now this quarter.

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Posted on: October 14, 2009 – 1:17 pm in Entertainment, Index, Technology Companies, , , ,

The Path to DJIA 10,000 (C, AIG, JNJ, JPM, IBM, NWS, DIA)

Bull and Bear ImageThe Dow Jones Industrial Average is within sight of the psychological 10,000 mark.  Again. This is a price-weighted index rather than a market cap-weighted index, which makes the index not as representative of the overall market.  Yet when Joe Public asks “what did the market do today?” that almost always means what the Dow Jones Industrial Average did.  And today the DJIA came within 1% of hitting the DJIA 10,000 mark.  This level is a psychological event and not a key technical event, and its member constituency earnings this week could easily make that 10,000 mark come true.  What is funny (or sad) is that if the most recent changes to the index weren’t made, we would have already seen the DJIA hit the mark.
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Posted on: October 12, 2009 – 12:59 pm in ETF, Editor's Picks, Index, , , , , , ,

DJIA Component Earnings on Deck (AA, INTC, JNJ, JPM, IBM, BAC, GE, C)

NYSE Floor ImageThisis going to be a very key earnings week.  The only DJIA component to report its Q3 period report so far has been Alcoa Inc. (NYSE: AA).  But we have earnings this week coming from six DJIA components: Intel Corporation (NASDAQ: INTC), Johnson & Johnson (NYSE: JNJ), JPMorgan Chase & Co. (NYSE: JPM), International Business Machines (NYSE: IBM), Bank of America Corporation (NYSE: BAC), and General Electric Co. (NYSE: GE).  Citigroup Inc. (NYSE: C) is no longer a DJIA component, but that is still a recent change.
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Posted on: October 11, 2009 – 7:35 am in Calendar, Earnings, Index, , , , , , , ,

Baby Boomers, $10 Trillion In Hand, Could Kill The Stock Market

houseBaby boomers control $10 trillion in assets. A great deal if not most of that money has been invested in the stock market as this part of the population attempted in increase the size of their retirement nest-eggs by riding the great bull market as the DJIA rose from 2,000 after the 1987 crash to 14,000 less than two years ago.

Money management firm Blackrock (NYSE:BLK) says that much of this huge pool of capital will now move into much safer investments as the people born in the late 1940s and 1950s retire. Read More »

Posted on: October 6, 2009 – 7:03 pm in Index, , , , , ,

Technical Analysis Predictions For Q4 (SPY, UUP, UDN, GLD, TLT, TBT)

bull-and-bear-image2Maybe it is time after a 50%+ gain in the major equity indexes, or maybe it is just everyone getting into the October bearish mode.  We are hearing more and more calls for a very weak equities market ahead.  One of our affiliates just ran a detailed audio/video presentation showing what the charts are expecting for Q4-2009 in the S&P 500, the US Dollar Index, Gold, and even bond yields.  Unfortunately this is a bad prediction for stocks and can be tracked directly by the SPDR (NYSE: SPY), or Spyders.  This prediction also has some gloom forecast for the US Dollar Index, which can be tracked in the PowerShares DB US Dollar Index Bullish (NYSE: UUP) and in the PowerShares DB US Dollar Index Bearish (NYSE: UDN). That is partly for the call for much higher Gold, which can be tracked most easily in the SPDR Gold Shares (NYSE: GLD).  The prediction for bonds was not as finite, but at record lows we can’t really argue with the logic that yields can only go one way unless sideways is considered a directional change.
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Posted on: October 5, 2009 – 1:02 pm in Analyst Calls, Bonds, Charts, Commodities, ETF, Economy, Index, International Markets, Metals, Technology Companies, , , , , ,

Nouriel Roubini Blasts The Rally With Tank-Warning

bull-and-bear-image2Dr. Doom, or Nouriel Roubini, has come out predicting that stocks and commodities may tank when they figure out that the recovery is far short of the recovery that is being priced in.  Last night he told Bloomberg TV, “Markets have gone up too much, too soon, too fast…” More importantly, in the expected U-shaped recovery that is expected in Q4-2009 or Q1-2010, the markets are anticipating much more than what the reality is.  He further noted, “Eventually markets are going to flatten out and correct to valuations that are justified.”

Roubini is also scheduled to be on CNBC this morning, and his interviews are likely to be picked up at other media outlets throughout the day.  Now we just need Meredith Whitney and Julian Robertson to key in for trifecta of doom.

Again, he will be appearing elsewhere this morning, but here is the weekend video clip from Bloomberg TV.

JON C. OGG

Posted on: October 5, 2009 – 8:20 am in Analyst Calls, Economy, Index

The DJIA 10,000 Psyche (AIG, C, DIA, SPY, GLD)

Bull and Bear ImageWhile everyone is stuck talking about the one year anniversary of the Lehman implosion and the real start of the next-to-last big leg down in the financial sector, there is a significant development taking place that is more psychological than anything.  The Dow Jones Industrial Average is within 300 points of the 10,000 mark.  What is interesting, depending upon how you would calculate the stocks now after a reverse split, is that had American International Group, Inc. (NYSE: AIG) and Citigroup, Inc. (NYSE: C) been left in the DJIA we would already be right at the 10,000 mark.  Changing index components can bite both ways.

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Posted on: September 16, 2009 – 11:19 am in ETF, Index, , , , ,

NASDAQ Toppy? Chartist/Technician Notes Secular Bear (QQQQ, SMH, XLK)

Bull and Bear ImageWhat happens when you get a pullback after the markets have rallied some 50% from the lows of the year?  Technicians key in with the charts, and much of the market bullishness suddenly disappears.  Throw in a the slowest or second slowest market week (Labor Day and the week between Christmas and New Years).  We have started seeing some troubling data on the charts and in the performance of stocks on good news, which is presumably because the prices have become so elevated.  One of our affiliates has recently come out with a key NASDAQ watch alert here, and the key ETF play we would watch on this are the PowerShares QQQ (NASDAQ: QQQQ), the Semiconductor HOLDRS (NYSE: SMH), and Technology Select Sector SPDR (NYSE: XLK) because these are effectively the most liquid and active of technology ETF products that would generally react to NASDAQ-specific moves.
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Posted on: September 2, 2009 – 11:47 am in ETF, Index, Technology Companies, Trading Alert, , ,

Inverse-Leverage ETFs Regain Favor As S&P Breaks 1,000 (FAZ, SKF, SDS, DUG, SRS)

Bull and Bear ImageIt was just last week that the DJIA was on its eighth consecutive day of a rally and the junkiest of companies were running rampant.  But as the economic numbers started to finally bring in some growth, you finally started to see sellers come into play.  And now suddenly with a triple-digit drop in the DJIA comes the sound of concern from many wondering if we ran too far and too fast.  We did run too far and too fast and the moves started to price in probably what is a return to normal growth rather than muted growth.  And just like that, the interest in inverse exchange-traded funds is back.

Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) is probably the biggest go-to instrument for traders betting against the market because it offers triple-leverage in a bet against the financial stocks in the Russell 1000 Financial Services Index.  At 1:30 we have seen over 65 million shares trade hands and this 3X-leverage inverse ETF is up 10% at $25.55.  Average volume on most days is about 40 million, and now anyone who bought this one in the last 7 trading days is up.
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Posted on: September 1, 2009 – 1:52 pm in ETF, Index, , , , ,

The Unusual Suspects (ATVI, AIG, ALTH, TREE, GOOG, PAY, EXPO, WIRE, AXYS)

bull-and-bear-image2We have almost a whole new slate of stocks in this week’s round of “The Unusual Suspects” for key stocks traders need to keep an eye on for the week ahead.  Activision Blizzard Inc. (NASDAQ: ATVI) was singled out by Barron’s.  We ran a bit noting $100 as a possible target for American International Group Inc. (NYSE: AIG), and let’s just say that it was widely read.  Allos Therapeutics Inc. (NASDAQ: ALTH) has a key FDA ruling this coming week.  Tree.com, Inc. (NASDAQ: TREE) may have its model crushed by none other than Google Inc. (NASDAQ: GOOG).  And troubled VeriFone Holdings, Inc. (NYSE: PAY) has earnings due this coming week, right at a key stock inflection point.  Exponent Inc. (NASDAQ: EXPO) and Encore Wire Corp. (NASDAQ: WIRE) are S&P index additions as new entrants.  Axsys Technologies Inc. (NASDAQ: AXYS) also has a shareholder proxy date this week, and some think a higher buyout price may be in the works.  We have run key details and previews for all of these to watch in the coming week.

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Posted on: August 29, 2009 – 12:00 pm in Activist Investor, Analyst Calls, Biotech, Calendar, Charts, Earnings, Editor's Picks, FDA, Financial Stocks, Index, Internet, Mergers and Buy Outs, Rumors, Technology Companies, The Week, Video Games, , , , , , , , ,

Trader Crack: AIG Goes To $100 (AIG, C, BAC, HIG, MET, YHOO)

Bull and Bear ImageThe DJIA has risen for eight straight days and the verdict is still out as to how today’s close will go.  With major indexes trading over 50% above their March lows and with all the troubled and speculative financial stocks trading like the new ghetto replacement for crack, you know you are in the midst of a big bull market or a major bear market rally.  And this new call on American International Group, Inc. (NYSE: AIG) either proves that we are all going nuts in the euphoria or that this market cannot be scared and cannot be reasoned with.  AIG has doubled since August 19 and is up roughly 400% from lows.  And now here is the call we are starting to hear more and more as at least a possibility…. AIG at $100.

For starters, we are not just skeptical.  Call us, or call me, Thomas.  But after running the math, this is at least not out of the realm of possibilities.  This becomes a scary notion if you start interpolating the gains off of lows seen at some of the other troubled financial giants that took TARP money and had to get bailed out by Uncle Sam.

Citigroup, Inc. (NYSE: C) is actually up more than 400% from its lows; and it is still down more than 75% from its 52-week highs and down over 90% from its $50+ highs in 2007.  Bank of America Corporation (NYSE: BAC) is still down about 55% from its 52-week highs today and is down 66% from its highs in 2006. Hartford Financial Services Group Inc. (NYSE: HIG) also took TARP money and it is an insurer.  Hartford shares are actually up sixfold from their lows; yet the shares are still down about 66% from the 52-week high and down over 75% from the 2007 highs.  While AIG is in hock with Uncle Sam, and while it is perhaps the most hated company by most of Main Street of all surviving financial giants, imagine if you started just using the stock performance of other troubled financial giants to make price targets at AIG.
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Posted on: August 28, 2009 – 1:50 pm in Analyst Calls, Banking, Financial Stocks, Index, Turnarounds, , , , , ,

More Official Warnings on Leveraged ETFs (FAS, FAZ, UYG, SKF, SDS, SSO)

money-stack-imageThe Financial Industry Regulatory Authority and the Securities and Exchange Commission decided to issue an Investor Alert yesterday called “Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors”….  This warning was meant to warn retail investors of the added risks in leveraged ETF investments that exist above and beyond the traditional world of investment products. This follows a recent FINRA regulatory notice reminding securities firms and brokers of their sales practice obligations relating to leveraged and inverse exchange-traded funds.

While this is not against any single leveraged ETF (or inverse ETF), it may have at least some influence on leveraged ETF and reverse-leveraged ETFs.  The two key ETFs for leverage and high volume and high volatility are the Direxion Daily Financial Bull 3X Shares (NYSE: FAS) and the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) as they are the triple-leverage financial sector ETFs.

A handful of the other active leveraged and inverse-leverage ETFSs are as follows: Ultra Financials ProShares (NYSE: UYG) seeks twice the daily performance of the Dow Jones U.S. Financials index.  UltraShort Financials ProShares (NYSE: SKF) seeks twice the inverse of the daily performance of the Dow Jones U.S. Financials index. UltraShort S&P500 ProShares (NYSE: SDS) seeks twice the inverse of the daily performance of the S&P 500 Index. Ultra S&P500 ProShares (NYSE: SSO) twice the daily performance of the S&P 500 Index.
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Posted on: August 19, 2009 – 9:49 am in ETF, Index, Regulation, SEC, Trading Alert, , , , , ,

When The NASDAQ Never Drops (QQQQ, SPY)

money-stack-imageWhile a market can go from a mega-bear market to a mega-bull market, steady rises become the usual.  But when you see an 11 day consecutive rise and then a gain ‘again’ that would make a twelfth consecutive day rally in an index, this becomes very much out of the norm regardless of what kind of market and economy you are in.  That is the case for the NASDAQ, and ditto for the NASDAQ 100 measured by the PowerShares QQQ (NASDAQ: QQQQ) ETF.  We have seen a steady rise in the S&P 500 in the same period, but the SPDRs (NYSE: SPY) does not have the exact same number of consecutive winning days.  Then there is a chart showing some of the internal readings of late…
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Posted on: July 23, 2009 – 10:16 am in ETF, Index, ,

Further Evidence That Alcoa Has Low Correlation To Earnings Season Trends (AA, SPY, XME)

Alcoa, Inc. (NYSE: AA) is one of the first stocks that kicks off earnings season every quarter.  Today is its actual earnings report after the closing bell.  What is interesting is that traders try to use this stock as a bogey for measuring earnings trends for the market as a whole and as well for the metals and mining sectors.  We have always held that because the company has had so many problems that everything might be coincidental rather than correlated. We wanted to compare this to the S&P 500 measured by the corresponding performance of the SPDRs (NYSE: SPY). The SPDR S&P Metals & Mining (NYSE: XME) ETF is what we use to track broader metals as a whole and it has Alcoa as a 3%+ component. While the recent earnings seasons and markets have been extremely volatile, we ran trends going back for 8 of the last earnings seasons comparing Alcoa to the SPYDERS and to the XME ETF.
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Posted on: July 8, 2009 – 11:10 am in ETF, Earnings, Index, Metals, , ,

ETF/ETN Investors Have To Watch CFTC Speculation/Limitation Rules (USO, UNG, GAZ, OIL, JJC, GLD)

We are witnessing a pivotal moment in investing history.  After a decade of opening up all markets to the public and to more speculators with exchange traded products, some might soon be closed to speculators and investors alike.  If these markets are not closed off to the bulk of the public and investors and speculators, the writing on the wall is as obnoxious as street punk graffiti that access might become limited.  For better or worse, speculators are likely going to have a harder time.  This week marks a review by the Commodity Futures Trading Commission that could have a broad impact on exchange traded funds and exchange traded notes.  The exchange traded funds and exchange traded notes which track energy are the United States Oil (NYSE: USO) and the United States Natural Gas (NYSE: UNG).

iPath DJ AIG Natural Gas Total Return Sub-Index ETN (NYSE: GAZ) is one we do not cover as frequently because of its volume. It seeks the returns potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index plus the rate of interest that could be earned on cash collateral invested in specified T-Bills. The index includes the Henry Hub Natural Gas futures contract traded on the NYMEX.  iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is another one we do not cover as much because of its volume. This ETN seeks returns that are potentially available through an unleveraged investment in the West Texas Intermediate crude oil futures contract plus the T-Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts.

iPath DJ AIG Copper TR Sub-Index ETN (NYSE: JJC) is not in energy, but it invests primarily in copper contracts and instruments that hopefully mirror the price of copper.  But do you expect that if regulation goes into curbing energy prices that the same effort would not be applied to metals and other inflationary hard goods?

The SPDR Gold Shares (NYSE: GLD) actually buys and sells gold bullion.  It is so large that it holds more gold than many large nations hold in reserves.  We could cover grains and other hard and soft goods as well.  The list almost feels endless.
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Posted on: July 7, 2009 – 12:46 pm in Commodities, ETF, Index, Oil & Gas, Regulation, , , , , ,

Quantifying Triple Leverage ETF Performance vs. Target Index (FAS, FAZ, BGU, BGZ, ERX, ERY)

Burning Money PicMoney Stack ImageDirexion has issued its semi-annual report for its triple leverage ETF holders and there are some interesting revelations here.  While there are many others covered, we wanted to demonstrate some of the differences among the Direxion Daily Financial Bull 3X Shares (NYSE: FAS), Direxion Daily Financial Bear 3X Shares (NYSE: FAZ), Direxion Daily Large Cap Bull 3X Shares (NYSE: BGU), Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ), Direxion Daily Energy Bull 3X Shares (NYSE: ERX), and the Direxion Daily Energy Bear 3X Shares (NYSE: ERY).
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Posted on: July 7, 2009 – 10:04 am in ETF, Index, Mutual Funds, Stock Splits, Trading Alert, , , , , ,

NYSE New Circuit Breakers for Q3 2009 (NYX)

Burning Money PicNYSE Euronext, Inc. (NYSE: NYX) has listed the revised circuit breaker levels for the New York Stock Exchange.  These will be the new trigger levels for Q3-2009 that create trading halts if these are hit, effective Wednesday, July 1, 2009.  These circuit breakers key off of the Dow Jones Industrial Average and represent the rounding levels for 10%, 20%, and 30% declines.
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Posted on: June 30, 2009 – 3:40 pm in Index, Trading Alert,