RSSNasdaq Tech ETFs: Best Day Since March of 2003
By Gary Gordon | September 18, 2008 | 6:08 PM | 0 Comments
There will be no sticking my neck out. I've watched Cramer call at least 10 bottoms in this bear... and I won't be making that mistake!
However, I do love history. And while history has officially marked October 2002 as the beginning of the most recent bull market, most watchers recognize March 2003 as the actual start.
In March 2003, that's when the markets received geopolitical certainty from the U.S., England and Spain. Specifically, the Azores get-together marked the reality that we'd be going to Iraq.
Up "zoom-zoom-zoomed" the markets... particularly the energy, defense and tech sectors. The Nasdaq rose nearly 5% in a single session.
So on 9/18/08, with a 100-point rise for the Nasdaq (4.8%), did we get the same kind of certainty from the markets? Perhaps.
Treasury Secretary Paulson "shopped" the idea of creating a fund for bad debt on bank balance sheets; moreover, this would be a similar entity to the one that helped out during the savings-and-loan mess of the late 80s/early 90s.
Before getting too excited here, the plan is in its early stages. Congress may not act on the idea until after the election. It should also be noted, that the 1990-1991 recession was in part due to the Resolution Trust Corp. ("RTC") needing to "handle" some 750 failed bank thrifts, beginning 1/1/1989.
The point is, we may or may not have found a longer-term solution for the credit crunch, but we may also be looking at a lengthy period of economic stagnation. The way out of that path will have to come from housing price stabilization... and stocks will want to see definitive signs before a rally becomes the next "true blue" bull.
Financial crisis coming under control? Maybe we are closer. New bull market? Maybe we need more certainty before the bear goes back to sleep.
It follows that financials were likely to bounce on 9/18/08 on short-seller restrictions both in the U.S. and abroad. Therefore, it may be important to see which other segments and sub-sectors gained in impressive fashion.
Here were the top 5:
1. Spider Retail (NYSE: XRT). It jumped 10%, though fell 2.6% in after-hours. (Read what I've been saying about retail in recent columns here.)
2. PowerShares NanoTech (NYSE: PXN) amassed 7.6%. Working with matter that is at the molecular or atomic level was supposed to create breakout companies in medicine, electronics and energy. Unfortunately, PXN has been one of the biggest laggards of the recent bull and current bear.
3. First Trust Internet Index (NYSE: FDN) garnered 6.1%. Prior to 9/18's action, this fund hit a new 52-week low and was down 25% in 2008. Amazon, EBay, Google... you gotta believe?!
4. SPDR Semiconductor (NYSE: XSD) picked up 6%. "Semis" represent early business cycle leadership. This is another one that had just hit a 52-week low the day prior, finishing down 24% on the year. One-day-turnaround? Hope springing eternal? Or... "the really real thing?!"
5. NASDAQ Clean Edge (NSDQ: QCLN) processed 5.8%. This index fund tracks clean energy companies engaged in manufacturing, development, distribution, and installation of clean-energy technologies. Down 40% YTD, up 5.8% on a one-day move... hmmmm, tough place to play.
Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.
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