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I am not an investment professional. I do not engage in stock or currency trading. I am a blogger and investor who believes currency deflation has created an investment demand for gold, and that gold bullion is the sole means of wealth preservation. The chart of gold, $GOLD, reveals that with... More
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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 0 comments
    Jun 8, 2010 10:13 AM | about stocks: FXY, BOM, SCO, SMN, JPX, EPV, SJH, SIJ, BZQ, 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
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