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Bear Market ETFs Soar As Fears Arise Over The European Sovereign Debt Crisis And Yen Carry Trades Unwind On Diminished Growth Opportunities

|Includes:BOM, BZQ, EPV, CurrencyShares Japanese Yen Trust ETF (FXY), JPX, SCO, SIJ, SJH, SMN, SSG

The ongoing sell off in ETFs reflects fears over the European sovereign debt crisis, and an unwinding of yen carry trade investments on diminished growth opportunities, as well as recognition of the end of Federal Reserve Quantitive Easing.

Chart shows that the european sovereign debt crisis has caused risk aversion and disinvestment in European shares.   

EWP – Spain

EWO – Austria

EWI – Italy

EWQ – France

FEZ  – Europe

Chart shows yen carry trades have unwound commodity and stock investments on diminished growth opportunities beginning March 14, 2010, with the fall of the Euro, FXE, and on April 24, with the fall of the Australian Dollar, FXA, and the May 3, 2010 rise of the Yen, FXY. The Yen has been in demand as carry traders have bought the currency to repay 0.25% carry trade loans from the Bank of Japan and its proxy Banks in Japan and hedge funds in London.   

DBB – Base Metals

USO – Oil

OIH - Energy Services 

SLX – Steel

XME - Metal manufacturing 

XLI – Industrials

EWZ – Brazil

EPP – Asia Excluding Japan

EWA – Australia

SMH – Semiconductors

The end of Federal Reserve quantative easing is causing regional banks, and the revenue shares financial to sell off; tripping small cap value and the Russell 2000 to sell off hard.

RWW - RevenueShares Financial,  those financial institutions capitalize by Federal Reserve Facilities such as TARP 

RKH – Regional Banks

RZV - Small cap value

IWM – Russell 2000

Those going short the market since April 24, 2010 with 200% inverse ETFs have experienced gain; the Finvis Screener presents charts of some of the more financially rewarding bear market ETFs, which include: 

BOM - Base metals 42% (gain on China credit tightening)

SCO – Crude Oil 44% (gain on yen carry trade disinvestment)

SMN – Basic Materials 42% (gain on sell off of steel, coal, and metal manufacturing stocks)

JPX- Asia Excluding Japan 40% (gain on yen carry trade investment in Indonesia, Thailand, Australia)

EPV – Europe 39% (gain on sovereign debt distress)

SJH – Russell 2000 Value 37% (gain on the ending of US Federal Reserve facilities)

SIJ – Industrials 37%  (gain on diminished growth opportunities)

BZQ – Brazil 32%  (gain on yen carry trade unwinding)

SSG – Semiconductors 31% (gain on diminished growth opportunities)

Disclosure: I am invested in gold coins