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John Nyaradi is publisher of Wall Street Sector Selector, Your Home for ETF Investing! ( a financial media site focused on news, analysis and information about exchange traded funds and global financial and economic developments. John writes a weekly guest... More
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Wall Street Sector Selector: Your Home For ETF Investing!
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  • Wall Street Sector Selector's Daily Market Report: Flatline

    S&P 500 (NYSEARCA:<a href='' title='SPDR S&P 500 Trust ETF'>SPY</a>) has no pulse

    U.S. stocks and ETFs showed no sign of life today as jobless claims jumped and tech darling, Google, laid an egg.

    It was a dull day on Wall Street with glum news from the unemployment numbers in which unemployment jumped 13%, however, that sad number was offset by positive leading economic indicators and a relatively upbeat Philadelphia Fed report. Surge In Unemployment Offsets Two Positive Reports.

    The day started out positively enough with a positive bond auction in Spain but the market seesawed all day until Google (GOOG) dropped its earnings bomb ahead of schedule which sent the Nasdaq 100 (NYSEARCA:QQQ) into a tailspin that started just after lunch and took 1% off the Nasdaq 100 (NYSEARCA:QQQ) and 1.2% off SPDR Select Sector Technology ETF (NYSEARCA:XLK)

    The tech sector did little better later in the day as Microsoft reported more than a 20% drop in earnings and AMD whacked about 15% of its workers. Google (NASDAQ:GOOG) plunged about 8% today on worries over its advertising revenue.

    Technology has been weak for sometime now with the Nasdaq 100 (NYSEARCA:QQQ) below its 50 day moving average and declining momentum, while earnings from the likes of Google (GOOG) Intel (NASDAQ:INTC) and Microsoft (NASDAQ:MSFT) have been less than inspiring.

    The market seems to be stuck in this sideways channel, and oftentimes, these can be indications of a Major Top? in spite of the S&P 500?s (NYSEARCA:SPY) significant gains so far this year.

    Supporting the idea of a major top, Dr. Copper and the Euro Continue Making Lower Highs and Dallas Fed President Richard Fisher recently said "Nobody really knows what will work to get the economy back on course. And nobody-in fact, no central bank anywhere on the planet-has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank-not, at least, the Federal Reserve-has ever been on this cruise before." QE Inifnity Won't Work But Here's What Will

    And in today's volatile markets, maybe it's Time To Consider Wide Moat ETFs

    Tech Talk

    S&P 500, spy

    chart courtesy of

    In the chart of the S&P 500 (NYSEARCA:SPY) above, we see how the index appears to be in the process of forming a triple top, which if completed would indicate increased possibility for more downside price action. Relative strength is declining while momentum tries to turn positive, but it will be hard to move higher on news like today's from Google.

    Major indexes also exhibit technical weakness with the Dow Jones Industrial Average (NYSEARCA:DIA) S&P 500 (NYSEARCA:SPY) and Russell 2000 (NYSEARCA:IWM) all on point and figure sell signals within an ongoing uptrend.

    The longer the sideways channel continues, the more likely it becomes that the ensuing breakout, up or down, will become quite powerful.

    Major Index ETFs:

    Dow Jones Industrial Average (NYSEARCA:DIA) -0.06%

    S&P 500 (NYSEARCA:SPY) -0.24%

    Nasdaq 100 (NYSEARCA:QQQ) -1.13%

    Russell 2000 (NYSEARCA:IWM) -0.64%

    Bottom line: Earnings continue to disappoint in a big way and unemployment remains stubbornly high. QE3 remains a driving force in global markets, but in light of faltering earnings and mixed economic reports, a chilling question comes to mind: what if QE to Infinity is not enough?

    Have a great evening and we'll talk tomorrow.

    All the best,


    John Nyaradi, Publisher

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Oct 18 6:57 PM | Link | Comment!
  • Congress Hurts Stocks: A Chat With Author Eric Singer
    Congress is dangerous for your portfolio, but Eric Singer, author of "Trade the Congressional Effect: How To Profit from Congress' Impact on the Stock Market," has a plan.

    John Nyaradi: Hi, everyone. I'm John Nyaradi, Publisher of Wall Street Sector Selector, a financial media site specializing in exchange traded funds and global markets. Today I am really pleased to welcome my special guest, Eric Singer. Eric, welcome to Wall Street Sector Selector.

    Eric Singer: It's nice to be here. Thank you.

    John Nyaradi: Eric manages the Congressional Effect Fund which is placed under the symbol (MUTF:CEFFX). He's also a registered investment adviser at Congressional Effect Management, LLC. And he's the first to document the general effect that Congress has on daily stock prices. He started that back in 1992 with an article at Barrons. He's widely published in the business press and now has a new book out from John Wiley & Sons that's called Trade the Congressional Effect: How To Profit from Congress' Impact on the Stock Market. So Eric, let's start at the top, why did you write the book and what can people get out of it?

    Eric Singer: I really wrote the book for a couple of different reasons. The first thing is that I want people to understand how much Congress hurts stocks. Over the last 47 years, on the 7,900 days Congress is in session the market goes up in price less than 1% annually and on the 4,100 days that they're on vacation, it goes up in price 16% annually. And what's even a little bit more startling is that those numbers go all the way back to 1897, day by day, the same way. Essentially all the gains in the market are attributable to days when Congress is on vacation.

    John Nyaradi: So how can individuals or advisers like you take advantage of this and what different strategies do you cover in the book?

    Eric Singer: Well, there are several different things that I cover in the book. Number one, each Congressman thinks his job is just to simply get reelected, and so, particularly in the House, they think on a very short-term basis. They have to. So they have a very short-term time horizon. One thing that an investor needs to have is a long-term time horizon and you can use value funds to do that. You have to understand that whatever short term damage they can do to an industry, you can see if there are ways to try to use that to your advantage.

    Also, the way my mutual fund works, which is the Congressional Effect Fund, the symbol is CEFFX and for institutional investor, CEFIX, I only invest on days Congress is out of session. So on the days when they're out of session, I'm long the S&P (NYSEARCA:SPY) and on the days that they're in session, I'm flat. I don't take duration risk and I avoid legislative risk by not investing on those days that Congress is in session.

    John Nyaradi: Tell us about your registered investment advisory practice.

    Eric Singer: It's called Congressional Effect Management. We have private accounts that take advantage of some of the different strategies that are associated with the Congressional Effect and I'm based in New York.

    John Nyaradi: We're talking in October, 2012, we have an election coming up in a couple of weeks and we're hearing a lot about the so called fiscal cliff. Can you give us your view of that?

    Eric Singer: We're going over the cliff. And the market I think will start to discount that a lot, particularly at election time. I don't think anything will get done during the lame duck session. Normally, in normal times, the lame duck session is good for the market. The market likes the idea that nothing has to get done. Lame duck sessions are like vacation days for Congress, with roughly the same 15-20% annualized return. However, in the last big lame duck session that we had in '08, the market fell at an annualized rate of 44%, just a giant number. And this lame duck session I think is going to have risk because of a combination of circumstances.

    Obviously, the overall economy is an issue and we have what appears to be a slowing earnings season. I think that Europe is still a long drawn out process. The international economy has a lot more geo-political risks than it has had in awhile. And on top of that, with the election, I just think that there's no outcome in the election that's going to give people certainty. I think that the outcome in the election is going to give people a sense that we're going to have a lot of continued uncertainty and continued procrastination by Congress. So that's why I'm pessimistic and I am bullish on gold.

    John Nyaradi: I always like to end these talks with an open ended question and that is, what's at the top of your mind right now, what keeps you awake at night, what should retail investors and professionals be watching out for here as the election approaches and we head for the end of 2012?

    Eric Singer: It's actually quite simple. I think that ahead of the election there's a lot of reason to go to cash. I think that investors should have some gold going in to the election because no matter who wins, I think gold will wind up outperforming. I think that if the Democrats get a decisive victory, there'll be a sense that the dollar is going to go down further. I think if the Republicans win, that will expand the population of buyers for gold to include mutual funds. So I think that gold is unusually well-positioned to do well. So my advice is caution in the stock market, be defensive in the stock market, have some gold and pray for more clarity as we go forward.

    John Nyaradi: Folks, we've been talking with Eric Singer. He's the manager of the Congressional Effect Fund, a mutual fund traded under the symbol CEFFX and CEFIX for institutional investors. He's also a registered investment advisor and his firm is Congressional Effect Management. And we're talking today about his new book, Trade the Congressional Effect: How To Profit from Congress' Impact on the Stock Market, just out in October. To learn more about Eric, his work and new book, just follow the links at the bottom of this interview. Eric, it has been great chatting with you today. I know we're all looking forward to talking with you again soon.

    Eric Singer: John, thank you so much. I appreciate it.

    Learn more about Eric's book Chat with Eric Singer

    (recorded interview, edited for length and clarity)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Oct 15 1:59 PM | Link | Comment!
  • A Quiet Columbus Day For U.S. Financial Markets

    U.S. financial markets drifted lower in quiet holiday trading as investors wait for earnings season and traders watch for overbought levels to be resolved.

    The drumbeat grows louder for a downbeat earnings season with some saying that it will be the worst set of results since the onset of the US financial crisis three years ago.

    Estimates have been lowered and it all starts tomorrow with Alcoa (NYSE:AA) and Yum Brands (NYSE:YUM) tomorrow and JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) on Friday.

    Bond markets were closed today and it was a Federal holiday so more people were concerned with pleasant autumn weather than the action on Wall Street.

    Europe remains in the spotlight as European finance ministers met in Luxembourg to discuss the ongoing uncertainties surrounding Greece and Spain while the IMF again lowered its forecasts for global growth for the rest of 2012 and 2013. The IMF now sees 3.3% growth for 2012 and 3.6% for 2013, both numbers about 0.3% lower than previous estimates.

    Read more

    Oct 08 10:28 PM | Link | Comment!
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