Delojozafado

Closed-End Funds: Due for Positive Returns in 2009

Just some ruminations and the posing of a couple questions. I am watch listing SLS and I like it. It is the market I am unsure of. This Made-off sell off has produced some technical market conundrums. Friday's rally was on very light volume. It would seem as if we break through the S&P 500 850 barrier on the down side it could be a very bad January. The thing that is most puzzling to me is how so many of these buy sell write option leveraged CEFs have done so well in this mini week long sell off. BDJ, ETJ, FAV domestically and the IGD, EXG and LGI globally themed have just been kickin' butt. Very unusual relative strength in the face of a flat to slightly deteriorating market " Made-off Sell Off". Perhaps the author of this string could make some observations on the leveraging with preferred issuances that most of these CEFs seem to use. The whole thing blew up over at Allianze-Pimco with "PMX" and a half dozen of it's sisters. Read the message board, chart, and news on that stuff. Not very pretty. There are requirements of not exceeding 200% of your equity on this type of leverage? Another big sell off in the 2009 market that exceeds the Oct lows could really push the CEF funds with this kind of structure to the wall. A third year in a row of losses? The SLS seems to not employ preferred leverage. A 1 month comparison chart of SLS against the FFR ...(ETF) certainly looks interesting even discounting ex-dividends. But then you have this WEFIF that they both seem to find so compelling. Malls and shopping centers? Anyone? Then you also have what seems to me from reading the tea leaves of some of these chartists some unclear technicals right at this time. Another couple of days and the tax selling is all over. Most of it should already have occurred. The trouble is the shoes keep dropping. Still you have stuff like the list I have given doing fairly well if not really well. So that leads us to a brief and marginally related examination of gold. Jim Rodgers continues to be long the agriculture commodities , the Swissie, Yen and Loonie and on the verge of shorting the treasury (TBT or PST). He has not yet committed to gold even while increasing his silver positions. Gold had a very good last 2 weeks. Yesterday Dennis Gartman declared himself long in Gold. Well this then revolves around the (implied) intrinsic value of real estate in a weakening dollar environment. In this case non-dollar denominated real estate. I find that a compelling argument for the deeply discounted SLS. It is only to define the entry point or miss it altogether? Whither goes the market in this 790 -990 trading range? Even if successful in establishing a position some tight stops might be indicated!