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Tuesday Outlook: Commodities, Global Markets

Actually, this is looking something like last spring and summer, seeing, hearing and speaking no evil about the road we were on, until we went single file over the cliff.

While I used to track IFN because the iPath INP was erratic during some sort of national foreign investment embargo a while ago. But I've given it up for the Wisdom Tree EPI, which is now tracking perfectly with the INP and has the edge in volume. By comparison, IFN is on its own CEF planet.

Thursday Outlook: Commodities, Global Markets

On the long term positioning question, one of the interesting things about DF's recent monthly charts is that the MACD still seems to work. I use MACD as a slightly lagging short term trend confirmation on daily charts, but would never have guessed a 12-26-9 period indicator would have any value over years. An investor in SPY or EWJ above (which have long enough historical data) who waited couple of months for really strong MACD crosses would have hung in through the noise and caught the major trend reversals in reasonably good time. I'm filing this idea for future reference and more back testing, as I weary of life in the Yellow Submarine below the 200SMA.

Wednesday Outlook: Commodities, Global Markets

The 3X funds are fun - I like minimizing absolute exposure for a cheap ticket on the roller coaster. After pulling the trigger too soon around $100, I managed to average into FAZ at $58 these past weeks and fully unloaded it between $82 and $88 yesterday - noticing the trading-screen opportunity accidentally, on an Obama-screen afternoon.

Re C and MS, and the rest, I feel like Eddie Murphy: "I can't be mad at you!" for taking history's biggest tax refund and using it to short the world economy instead of lending it to more losers. It's been a mean old (morally hazardous) world. Now that Vice-President Caligari and his Somnambulist Commander-in-Chief are gone, who knows? Maybe the guy in the driver's seat is actually in charge.

The 'Reflation' Top Ten Portfolio

Rayno,

GL above is right that the leveraged ETFs go off benchmark over time, the math is canvassed pretty well elsewhere - google. But I'd disagree it's unwise to hold them for a while. Many have been out for a couple of years: just chart the ones you hold or the ones GL discloses against their benchmarks to see how they've been performing as this mess has developed. For example, a two year chart of SPY vs SSO will show 35% vs 70% - not bad tracking. The SDS double short is "only" up 15% in absolute terms, but that's 50% better than the SPY. The less liquid or less well-designed ones don't do so well.

Friday Outlook: Commodities, Emerging Markets

A Bloomberg interview yesterday revealed there will be a U$ Treasury auction scheduled for nearly every business day in 2009. I've been watching TIP, but adding TBT to the radar screen.

Wednesday Outlook: Commodities, Emerging Markets

I've been curious about following $COPPER index instead of the iPath Dow Jones-AIG Copper Total Return Sub-Index ETN (JJC) which seems to be tracking that index quite well.

Tuesday Outlook: Commodities, Emerging Markets

Lows aren't in until Case-Shiller turns up again, meaning the toxic asset write-downs are over - let's see today's report, and whether the new regime has a practical fix for mortgage defaults. Deflation can and will be defeated by printing money. Agree with DF on holding lots of cash but can't resist a little gold a little TIPS, and stuffing the stocking with a few double-shorts as they go on a pre-holiday sale. Let's be thankful and raise a Thursday glass to the new ETFs, arriving just in time for this mess. Can't think what I'd have done even two years ago.

Wednesday Outlook: Commodities, Emerging Markets

Dr. O:

FXI tracks (for practical purposes is) the FTSE Xinhua China 25 Index, mainland companies trading on the Hong Kong (not Shanghai) exchange. It's about 40% banks/insurance. There's a PDF Factsheet here:

ftse.com/xinhua/englis...

Tuesday Outlook: Commodities, Emerging Markets

To the extent this is about Black Swans smashing into Manhattan, this is indeed reminding me of 9/11, slow motion this time, and I'd start to buy those lows. I would not be surprised to see a Santa trading (sucker) rally commencing soon, carrying through New Year, and revisiting the bargain basement early in the year. I'm nearly out of my doubleshort limbo dance positions - the fun challenge is going low while avoiding that backside flop.

Wednesday Outlook: Commodities, Emerging Markets

Metooball, No less a man than Bill Gross brought up just that solution - maybe half seriously.

www.pimco.com/LeftNav/...

Wednesday Outlook: Commodities, Emerging Markets

Personally I think trying to bail out at the level of these funny instruments is a big mistake. The real problem is the real estate market from which any valuation of the exotic asset packages has to be derived by the Suspender Boys who invented them. The only way to fix this is to inject liquidity into the underlying RE market and let the chips fall from derivative investments on that basis. I think the evil ways of the GSE management has clouded the fact that they're probably the most effective tool for moving government money into the problem assets and helping your friend Chucky save the house. I'd rather Up-Chuck than go blind.

Thursday Outlook: Commodities, Emerging Markets

There are going to be a lot of wrong calls about equity market capitulation, when we haven't seen the housing market capitulate yet. Of course there might be some more extended tradeable rallies, like last summer's. Any mark to market accounting right now is just an exercise in hallucinatory seller optimism or buyer pessimism, Three or four months of Case Shiller uptrend might tell us this is over, and even that might be misleading if it's only due to another wave of Treasury deficit "stimulus" from a Democrat Congress.

Tuesday Outlook: Commodities, Emerging Markets

Interested in DF unloading doubleshort crude oil - I took today's gap down to do the same, as well as taking some quick gains on SDS and SKF, factoring a risk of some sort of relief rally or consolidation on FOMC action this afternoon. As a Canada booster, I'd say Russia has taken itself out of the optimistic "emerging market" category - how about more short ETFs for "submerging markets" as economies blessed with resources that are nevertheless drinking themselves to infertility and death under the direction of crooked autocrats.

Tuesday Outlook: Commodities, Emerging Markets

The Band also did "The Night They Drove Ol' Dixie Down"

Well I don't mind choppin' wood,
and I don't care if the money's no good
Ya take what ya need and ya leave the rest
They never should have taken the very best

Tuesday Outlook: Commodities, Emerging Markets

A (my) less charitable view is that covering the wall of the Bernanke/Paulson "war room" is a big sign saying "IT'S THE ELECTION, STUPID!" We've had a housing bubble, and prices are still much higher than they should be. Stops will be pulled as necessary to prevent the voters from worrying too much before November 4th, after which a new game with new players. In the meantime, this administration goes out leaving its successor with more fiscal deficit, no money for national infrastructure and energy efficiency, no money to retool and recruit the sand-clogged military, and everybody in America is living in a "social housing" project under a Chinese-model as well as Chinese-backstopped market. All to keep Case-Schiller from falling to a convincing bottom. Re financials, I recall this time last year when the market was saying, "we'll have to wait for year-end accounting to get a straight story on all that paper. We still don't, and I'm not so sure we'll have the story yet by Inauguration Day. My limit order for more SKF triggered yesterday morning.