A fall of the European financials, EUFN and the international utilities, DBU, as well as a comparison of inverse mutual funds, ukpsx, ufpix, dxdsx, uxpsx with the inverse ETF, twm, documents that the bear market that began April 26, 2010 has returned; the recent rally from June 7, 2010 to June 21, was short-lived; of these, the 200% inverse of the Russell 2000, TWM, and 200% inverse Japan, UKPSX, performed best this last week.
A subjective analysis of the charts in the Finviz screener of the ETFs, SRS, SJH, SSG, EEV, SMN, SMK, BZQ, SIJ, EPV, FXP, SCO, JPX, BOM, EWV, INDZ …. suggests that given that now the bear market has returned, the ETFs, SJH, BZQ, and INDZ will provide the best return of the 200% ETFs and mutual funds, from here on out.
India stocks INP, is maxed out relative to the India currency, INR, as seen in the chart of INP relative to INR. India stocks have risen about as high as they can on the Rupe which is a relatively stable currency. When India, INP, is compared to Brazil, EWZ, and the emerging markets, EEM, the chart shows that India is truly is over-valued; chart of INP, EWZ, and EEM.
For the best of bear market performance, I recommend for institutional investors, the 300% inverse of the Russell 2000, IWM — TZA, as the US small caps will fall rapidly in value as banking, KBE, KCE, and RWW, conditions worsen, and as the corporate bond to government bond spreads widen; and the 200% inverse of the emerging market leaders, EWZ and INP – BZQ and INDZ, as hot money flows, that is yen carry trades unwind; as seen in this chart of TZA, BZQ and INDZ.
Institutional investors may also want to consider the 200% inverse of the gold shares, HGD.TO, and the 300% inverse of the US Treasuries, TMV, as the perceived safe haven of gold mining shares, GDX, and US Treasuries, ZROZ, may evaporate, as the gold mining shares disconnect from the price of gold and fall lower with the market, and the perceived safety of US Treasuries evaporates on concerns of US deficit spending. Chart of HGD.TO and TMV. The yield curve, $TYX:$TNX, has been rising since April 26, 2010, and will drive the US government bonds ever lower.
For individual investors, I recommend investment in gold.
Disclosure: I am invested in gold coins