Waiting on a Market Rebound

By Tom Lydon | October 30, 2008 | 5:02 PM | 0 Comments

Admit it. You've probably gotten a little used to the dour economic reports, the days the Dow is down by hundreds of points, the ETFs that are 40%, 50% or even 70% off their highs. We've become complacent, thinking that this is the order of the day for the time being.

Out of the Blue

By David Fry | October 28, 2008 | 6:49 PM | 0 Comments

Well, not really. This type of rally has been building for some time given how oversold things had become. It’s also why we closed our shorts and went to cash. This rally began last night in Asia when Japanese authorities directly intervened in currency and stock markets. The rally then spread to other Asia-Pacific indexes.

Why EWJ May Make My Christmas Wish List

By Gary Gordon | October 27, 2008 | 3:50 PM | 0 Comments

Bears "swear" that the stock market's crash in 2008 was inevitable, even predictable. However, recessions don't typically push major indexes down 45% in 10 months. Neither do bank crises or hedge-fund collapses. Bulls "swear" that the worst is behind us, though they've been saying that since March. How many times have we heard the fundamental believers talk about cheap valuations? (Even with the right facts, they fail to account for the greed-fear dance.)

Having a Stop Loss Plan Protects ETF Investors

By Tom Lydon | October 23, 2008 | 5:10 PM | 0 Comments

This market has been painful to watch, for plenty of reasons. Last year, so many areas were flying high and investors were riding a wave of unprecedented returns.

The Risks Associated With Potential ETF Closures

By Gary Gordon | October 23, 2008 | 2:34 PM | 1 Comment

Zoe Van Schyndel at the Motley Fool noted that 25% (200 of 800) of ETFs have assets under $50 million. These 200 ETFs may be showing signs that the investing public isn't particularly intrigued. When the investing public has little interest in a particular exchange-traded vehicle, the company sponsoring the ETF in question may be forced to close the fund. And while you're not at risk of losing an entire investment, you still need to stay informed.

So That's the Bottom Then Right?

By David Fry | October 13, 2008 | 6:41 PM | 0 Comments

Yeah, they’re tossing everything they’ve we’ve got at markets. Lloyd Bridges line from the movie Airplane may be what we all need right now eh?

Asset Allocation and ETFs: Pimco's EL Arian in 2008

By Gary Gordon | October 10, 2008 | 2:07 PM | 0 Comments

It seems that the CBOE Volatility Index ($VIX) breaks historical records on a daily basis. A long-standing rule of buying fear when the VIX spikes above 30 has fallen by the wayside, as its climb has been as epic as oil's run at $150 per barrel.

Hold-N-Hope ETF Portfolios: Much Worse for the Wear

By Gary Gordon | September 30, 2008 | 3:01 PM | 1 Comment

My family asked that, while on a 4-day break, I refrain from posts to the ETF Expert blog. We all needed a weekend of quality time. Little did I know that 9/29/2008 would register a "777" on the Richter Magnitude Scale for stock market damage. "The House didn't pass the rescue package?"

Stocks: Where We Go From Here

By Jim Welsh | September 24, 2008 | 3:36 PM | 1 Comment

In my January 21, 2008 letter, I forecast that the S&P could decline to 1175. As I explained then, “This technical estimate is based on the chart of the S&P and how it has traded over the last year. In March 2007, the S&P made a low at 1364, and a low of 1370 in August 2007. The top in October was 1576. The difference between the high in October and the two lows in 2007 is 200 points. This suggests the S&P could fall as far below the 1370 area as it was above it in October 2007.”  In the February letter I noted that the 1175 level “marks the halfway point between the low in 2002 at 775, and the October 2007 high at 1575. Bear markets frequently retrace half of the preceding bull market.”

Now that the S&P has traded down to 1135, and we have The Plan waiting in the wings, it is worth asking if the bear market is over. Given the poor outlook for the economy and credit creation, I don’t think this cyclical bear market is over. The bear market of 2000-2003, lasted 30 months, if one marks the bottom as October 2002, or 36 months if the March 2003 low is used. This suggests the current cyclical bear market could last until March-September of 2010. In addition, there has been a 16-17 year pattern in the stock market that dates back to 1949. Between 1949 and 1966 stocks rose in a secular bull market, fell in a bear market between 1966 and 1982 and zoomed between 1982 and early 2000. I believe a secular bear market commenced in 2000 that could last until 2016.

I recommended cutting exposure in July 2007 and October 2007, when the S&P was 1525-1550, and in May when the S&P was 1420-1440. In July, I suggested a rally to 1310-1325 would present another opportunity to sell. There is a good chance the market will rally in coming weeks. The ban of short selling on 800 stocks until October 2 will remove some selling pressure. The passage of some version of The Plan should bring in some buying and cause selling pressure to abate. My guess is that the S&P could climb to 1280-1320, and provide another opportunity to sell. I would recommend a modest short position if the S&P moves above 1313.

Last month I recommended a small trading position in the China ETF (NYSE: FXI) below $38.00, the Emerging Market ETF (NYSE: EEM) below $38.00, and the oil stock ETF (NYSE: XLE)) below $69.00. Given the market environment, trading stops should be used. FXI $34.00, EEM $34.45, XLE $65.50.

 

 www.welshmoneymanagement.com

Here's the Tab

By David Fry | September 23, 2008 | 7:32 PM | 2 Comments

HERE’S THE TAB All eyes were glued on senate testimony today which should have featured an optimistic Turnaround Tuesday. But, no, as such it was a flop despite some intraday attempts to rally. The only thing that reversed course today was profit-taking in gold and oil. What’s the problem? No one can get their hands around the bailout deal or its ramifications.