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<< Return to page 1 - The Grinch Arrives Early

It was a light volume day and with it indexes can get pushed around relatively easily. You can see that clearly with the action today in the 5 minute SPY chart above. You should expect more such two-way action throughout the next two shortened weeks.

ProShares and Rydex issued their holiday tax gifts today proving only one thing: there’s no free lunch. If you’re a tax-exempt investor protecting your portfolios with inverse or leveraged inverse issues you were unaffected. But, taxable investors got the tax bill today. As you may know, if you had tried to protect yourself in futures or options you would’ve received a similar bill. If you had sold your stocks, you would have another tax bill to pay if you had a low cost basis and sold them well. It’s a bitter pill to some since these tax liabilities are mostly short-term gains. But you know something? It’s a lot better having a tax bill than losing 40-50% on your investments, plus there are few ways to beat Uncle Sam without some high-priced tax accountants and lawyers.

I’ll post again tomorrow and that should be it for this week… er, maybe.

Let’s see what happens.

Have a pleasant evening.

Disclaimer: The ETF Digest is long among other issues: FXF, GLD, EWJ, EWY and FXI.

Source: Tuesday Outlook: Commodities, Emerging Markets