Gold has been in the spotlight for several years and recently attention has turned to silver, but the real superstar of 2010 is actually Palladium.
As of the high yesterday at $65 the Palladium ETF (PALL) was up 50% year to date far out-pacing Gold which was up about 18% and even Silver which was up approximately 33%. The primary driver for this outperformance is the fact that industrial applications have been switching from Platinum to Palladium due to the fact that it's much cheaper.
If you are looking for market direction in the precious metals, keep an eye on palladium since it has been the market leader all year.
Tuesday, November 2
Monday, November 1
Double Top In Silver ETFs
Both of the most active silver etfs SLV and SIVR made a double top today. The high on SLV was 24.42 which was exactly the all time high, same with SIVR which reached 24.88 which was the all time high set a couple weeks ago.
The futures actually went to a new contract high early this morning before failing. When a contract goes to a new all time high and then fails I always called this the "Kiss Of Death Trade" because it is deadly accurate. Paul Tudor Jones used to love this trade where the professionals would push to new contract highs, triggering all the "Buy Stops" and then use that volume to establish short positions.
The way to trade this is to go short with a stop above today's high. If the market takes out the high today, odds are the trade is no good. I'm choosing to use the Short Silver ETF ZSL instead with a sell stop below today's low.
The beauty of the Kiss Of Death type trade is that the risk is normally quite small and if the trade turns out the gains are normally HUGE!
The futures actually went to a new contract high early this morning before failing. When a contract goes to a new all time high and then fails I always called this the "Kiss Of Death Trade" because it is deadly accurate. Paul Tudor Jones used to love this trade where the professionals would push to new contract highs, triggering all the "Buy Stops" and then use that volume to establish short positions.
The way to trade this is to go short with a stop above today's high. If the market takes out the high today, odds are the trade is no good. I'm choosing to use the Short Silver ETF ZSL instead with a sell stop below today's low.
The beauty of the Kiss Of Death type trade is that the risk is normally quite small and if the trade turns out the gains are normally HUGE!
Thursday, October 21
Short Bond ETF Review
With long term interest rates coming off historic lows and the fed pursuing an initiative to bring inflation rates back up to "normal", many people feel that a perfect storm is coming for the bond market. Anyone who has experienced these in the past knows how violent the bond market can retreat when inflation or even "inflation expectations" enter the picture.
If you are wanting to use a Short Bond ETF to capitalize on a collapse in bond prices you have 3 solid choices, it just depends on how much leverage you want to use.
TBF - Inverse Bond ETF (No Leverage)seeks to provide -100% of the daily performance of TLT
TBT - Double Short Bond ETF (2x Inverse) seeks to deliver -200% of the daily performance of TLT
TMV - Triple Short Bond ETF (3x Inverse) seeks to deliver -300% of the daily performance of the NYSE 30 Yr Treasury Index.
If you are not experienced with Short ETF products make sure you do your research before diving in. These ETFs are designed to track the "Daily" performance of the underlying security, so they reset each night after the close. This characteristic makes it a short term trading vehicle but not suitable for long term positions.
If you are expecting a sharp move lower in bonds, one of these could be a good way to play it. Just do your research first!
If you are wanting to use a Short Bond ETF to capitalize on a collapse in bond prices you have 3 solid choices, it just depends on how much leverage you want to use.
TBF - Inverse Bond ETF (No Leverage)seeks to provide -100% of the daily performance of TLT
TBT - Double Short Bond ETF (2x Inverse) seeks to deliver -200% of the daily performance of TLT
TMV - Triple Short Bond ETF (3x Inverse) seeks to deliver -300% of the daily performance of the NYSE 30 Yr Treasury Index.
If you are not experienced with Short ETF products make sure you do your research before diving in. These ETFs are designed to track the "Daily" performance of the underlying security, so they reset each night after the close. This characteristic makes it a short term trading vehicle but not suitable for long term positions.
If you are expecting a sharp move lower in bonds, one of these could be a good way to play it. Just do your research first!
Tuesday, October 19
Big Day For "Beat Up" Leveraged Inverse ETFs
The big winners today were the Leveraged Inverse ETFs all of which have been pounded to death over the last 18 months. The 3 biggest winners were:
DTO (+10.07%) - ProShares Double Short Crude Oil ETN
EDZ (+9.67%) - Direxion 3x Leveraged Short Emerging Markets ETF
ZSL (+9.67%) - ProShares Ultra Short Silver ETF
All of these pops are strong "Counter Trend" reactions to the Chinese raising their key interest rate today which sparked a rally in the U.S. Dollar as well. Crude Oil, Emerging Markets and Silver have all been very strong performers the past 6 weeks in anticipation of the Federal Reserves QE2 Program.
Expect more volatility in the days ahead!
DTO (+10.07%) - ProShares Double Short Crude Oil ETN
EDZ (+9.67%) - Direxion 3x Leveraged Short Emerging Markets ETF
ZSL (+9.67%) - ProShares Ultra Short Silver ETF
All of these pops are strong "Counter Trend" reactions to the Chinese raising their key interest rate today which sparked a rally in the U.S. Dollar as well. Crude Oil, Emerging Markets and Silver have all been very strong performers the past 6 weeks in anticipation of the Federal Reserves QE2 Program.
Expect more volatility in the days ahead!
Friday, October 15
Double Silver ETF Interest Surges
I noticed yesterday lots of people were searching Google looking for a Double Silver ETF as we were getting higher than normal traffic from that keyword phrase. Hopefully they will just do their research and wait for a better entry point as silver has run over 30% in the last 6 weeks. I don't believe silver is done yet, but I've taken profits and will wait for a setback before buying anything!
That said, we have been waiting for a setback the past couple weeks to add to positions and never got it. It appears the major commercial banks that held about 1/3 of all the short positions in Comex Silver have been trying to get out. Could get pretty wild.
AGQ is the ticker symbol for the Double Silver ETF
That said, we have been waiting for a setback the past couple weeks to add to positions and never got it. It appears the major commercial banks that held about 1/3 of all the short positions in Comex Silver have been trying to get out. Could get pretty wild.
AGQ is the ticker symbol for the Double Silver ETF
Tuesday, August 12
BRIC ETF - BKF Covers Brazil, Russia, India & China
For the past several weeks I've been waiting for BKF to come down into the $45 range and it finally happened this past week. This etf is equally weighted between Brazil, Russia, India and China.... all of which have been suffering the past several months as investors have unwound huge "Emerging Market" over-weightings.
The Brazilian market is off over 25% due to the recent deflation in the energy and commodity markets.
The Russian market has been absolutely killed due to the war with Georgia as well as commodity declines. This has been a double whammy which has caused a 35% slide in the Templeton Russia Fund ( TRF ) in just the past 10 weeks.
There is pessimism over Chinese productivity due to the shut downs that have occurred in preparation for the olympic games. It's kind of amazing to think how poor the air quality must be over there to justify such an extreme measure.
India went through a good correction along with the others, but reached it's low in mid-July along with the U.S. markets.
I feel that investing in BKF is probably a better move for my SEP retirement account than trying to time the various emerging markets. There 4 markets all have different strengths ( China - Production, Russia - Vast Energy Reserves, India - IT Services, Brazil - Natural Resources & Agriculture ) and all 4 have incredible growth potential over the next 30-40 years.
The Brazilian market is off over 25% due to the recent deflation in the energy and commodity markets.
The Russian market has been absolutely killed due to the war with Georgia as well as commodity declines. This has been a double whammy which has caused a 35% slide in the Templeton Russia Fund ( TRF ) in just the past 10 weeks.
There is pessimism over Chinese productivity due to the shut downs that have occurred in preparation for the olympic games. It's kind of amazing to think how poor the air quality must be over there to justify such an extreme measure.
India went through a good correction along with the others, but reached it's low in mid-July along with the U.S. markets.
I feel that investing in BKF is probably a better move for my SEP retirement account than trying to time the various emerging markets. There 4 markets all have different strengths ( China - Production, Russia - Vast Energy Reserves, India - IT Services, Brazil - Natural Resources & Agriculture ) and all 4 have incredible growth potential over the next 30-40 years.
Friday, February 24
Dow Jone Utility Average ( IDU )
The Dow Jones Utility Average recently bounced off it's 200 day moving average so I decided to see if I could find an ETF that tracks the DJUA. What I found was the following iShare product:
Dow Jones U.S. Utilities Sector Index Fund (IDU)
Top Holdings* (Daily) as of 2/22/2006
7.95% Exelon Corp
5.30% Dominion Resources Inc
5.26% Southern Co (The)
5.22% Duke Energy Corp
4.69% TXU Corp
3.47% FirstEnergy Corp
3.43% Public Service Enterprise Group Inc
3.16% FPL Group Inc
3.13% Entergy Corp
2.92% PG&E Corp
*Holdings are subject to change. Check the IShares site for current info.
Top Sectors as of 2/22/2006
75.93% Electricity
23.61% Gas, Water & Multiutilities
It appears to mimic the Dow Jones Utility Average quite accurately and has good average daily volume of nearly 77,000 shares per day.
Dow Jones U.S. Utilities Sector Index Fund (IDU)
Top Holdings* (Daily) as of 2/22/2006
7.95% Exelon Corp
5.30% Dominion Resources Inc
5.26% Southern Co (The)
5.22% Duke Energy Corp
4.69% TXU Corp
3.47% FirstEnergy Corp
3.43% Public Service Enterprise Group Inc
3.16% FPL Group Inc
3.13% Entergy Corp
2.92% PG&E Corp
*Holdings are subject to change. Check the IShares site for current info.
Top Sectors as of 2/22/2006
75.93% Electricity
23.61% Gas, Water & Multiutilities
It appears to mimic the Dow Jones Utility Average quite accurately and has good average daily volume of nearly 77,000 shares per day.
Wednesday, January 18
Worst Performing ETF's Of 2005
For those of you who are contrarian by nature, you may be interested in the worst 10 performers of 2005. Many of these areas showed life in the first week of 2006.
Internet Infrastructure Holdrs - IIH (15.80%)
B2B Internet HOLDRS - BHH (10.88%)
Telecom HOLDRS - TTH (9.63%)
Internet HOLDRS - HHH (7.68%)
Internet Architecture HOLDRS - IAH (6.98%)
iShares:S&P Global Telecom - IXP (6.72%)
Consumer Discretionary SPDR - XLY (6.57%)
iShares Goldman Sachs Software Index - IGV (5.53%)
Vanguard Consumer Discretionary VIPERs - VCR (4.10%)
Pharmaceutical HOLDRS - PPH (3.71%)
The worst performing ETFs of 2005 are dominated by Merrill Lynch Technology Holdrs, Telecom, Big Pharma and Large Cap Growth.
Internet Infrastructure Holdrs - IIH (15.80%)
B2B Internet HOLDRS - BHH (10.88%)
Telecom HOLDRS - TTH (9.63%)
Internet HOLDRS - HHH (7.68%)
Internet Architecture HOLDRS - IAH (6.98%)
iShares:S&P Global Telecom - IXP (6.72%)
Consumer Discretionary SPDR - XLY (6.57%)
iShares Goldman Sachs Software Index - IGV (5.53%)
Vanguard Consumer Discretionary VIPERs - VCR (4.10%)
Pharmaceutical HOLDRS - PPH (3.71%)
The worst performing ETFs of 2005 are dominated by Merrill Lynch Technology Holdrs, Telecom, Big Pharma and Large Cap Growth.
The Best ETFs Of 2005
According to the end of the year data provided by Yahoo Finance, here is a list of the top 10 performing etf's for 2005.
iShares S&P Latin America 40 Index - ILF 54.59%
iShares MSCI South Korea Index - EWY 53.90%
iShares MSCI Brazil (Free) Index - EWZ 52.66%
iShares MSCI Mexico (Free) Index - EWW 43.82%
BLDRS Emerging Markets 50 ADR Index ADRE 40.80%
Energy Select Sector SPDR - XLE 40.17%
Vanguard Energy VIPERs - VDE 39.05%
iShares Goldman Sachs Natural Res. - IGE 35.98%
iShares Dow Jones US Energy - IYE 34.67%
iShares MSCI Emerg Mkts Index - EEM 32.62%
You can see a very clear pattern of Emerging Markets and Natural Resources (led by the energy complex). The Biotech Holdr BBH also had a good year posting a 31.29% gain and the rally in gold to 20 year highs led the streetTRACKS Gold Trust GLD to a 17.76% gain for the year.
iShares S&P Latin America 40 Index - ILF 54.59%
iShares MSCI South Korea Index - EWY 53.90%
iShares MSCI Brazil (Free) Index - EWZ 52.66%
iShares MSCI Mexico (Free) Index - EWW 43.82%
BLDRS Emerging Markets 50 ADR Index ADRE 40.80%
Energy Select Sector SPDR - XLE 40.17%
Vanguard Energy VIPERs - VDE 39.05%
iShares Goldman Sachs Natural Res. - IGE 35.98%
iShares Dow Jones US Energy - IYE 34.67%
iShares MSCI Emerg Mkts Index - EEM 32.62%
You can see a very clear pattern of Emerging Markets and Natural Resources (led by the energy complex). The Biotech Holdr BBH also had a good year posting a 31.29% gain and the rally in gold to 20 year highs led the streetTRACKS Gold Trust GLD to a 17.76% gain for the year.
Wednesday, January 4
Hot hand ETF for the new year
By Jim Lowell
Last Updated: 1/3/2006 12:01:00 AM
"WATERTOWN, Mass. (MarketWatch) -- Unveiling of my Hot Hands ETF is now officially an annual event.
And, if you followed the Hot Hands for 2005, it would have been a profitable event: last year's Hot Hands ETF was the iShares S&P Latin American 40 - and it gained 54.5% in 2005, thank you very much.
What's a Hot Hands ETF you ask? Easy. Last year, I introduced a simple and straightforward way to invest in exchange-traded funds: buy last year's best performing one. At the start of each and every New Year, buying the prior year's top-performing ETF turns out to be a stellar strategy. See column from a year ago.
No way?
The rewards, as demonstrated since January 2001 (when there were enough ETFs in existence to start tracking this strategy), puts performance posers in their place -- and it doesn't cost an arm and a leg to sidle up to the bar of year-end results and spit in the eye of the nearest high priced hedge fund.
But before I get to the strategy's details, and before I count down to my Hot Hand ETF For 2006, let me throw what will now be my annual monkey wrench into this particular financial engine.
While this strategy does reveal a healthy trend, the data only goes back five years; hardly long term. Yes, of course, past performance doesn't guarantee that the sun will rise tomorrow, but it also doesn't mean that you shouldn't set the alarm clock. Further, I do not advocate sinking your entire investment kit and caboodle into one of anything -- ever. That would foolishly fly against the diversified investment approach that I practice and preach personally and professionally. So, be forewarned: this isn't meant to be an all-or-nothing strategy. But it could be a complementary one.
Read The Whole Story
Last Updated: 1/3/2006 12:01:00 AM
"WATERTOWN, Mass. (MarketWatch) -- Unveiling of my Hot Hands ETF is now officially an annual event.
And, if you followed the Hot Hands for 2005, it would have been a profitable event: last year's Hot Hands ETF was the iShares S&P Latin American 40 - and it gained 54.5% in 2005, thank you very much.
What's a Hot Hands ETF you ask? Easy. Last year, I introduced a simple and straightforward way to invest in exchange-traded funds: buy last year's best performing one. At the start of each and every New Year, buying the prior year's top-performing ETF turns out to be a stellar strategy. See column from a year ago.
No way?
The rewards, as demonstrated since January 2001 (when there were enough ETFs in existence to start tracking this strategy), puts performance posers in their place -- and it doesn't cost an arm and a leg to sidle up to the bar of year-end results and spit in the eye of the nearest high priced hedge fund.
But before I get to the strategy's details, and before I count down to my Hot Hand ETF For 2006, let me throw what will now be my annual monkey wrench into this particular financial engine.
While this strategy does reveal a healthy trend, the data only goes back five years; hardly long term. Yes, of course, past performance doesn't guarantee that the sun will rise tomorrow, but it also doesn't mean that you shouldn't set the alarm clock. Further, I do not advocate sinking your entire investment kit and caboodle into one of anything -- ever. That would foolishly fly against the diversified investment approach that I practice and preach personally and professionally. So, be forewarned: this isn't meant to be an all-or-nothing strategy. But it could be a complementary one.
Read The Whole Story
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