Stocks Rising into Final Hour on Euro rebound, Diminished Sequestration Fears, Short-Covering, Tech/Retail Sector Strength
Broad Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- ISE Sentiment Index 116.0 +1.75%
- Total Put/Call 1.01 -3.81%
Credit Investor Angst:
- North American Investment Grade CDS Index 88.01 -2.5%
- European Financial Sector CDS Index 154.87 -2.7%
- Western Europe Sovereign Debt CDS Index 106.5 +1.5%
- Emerging Market CDS Index 232.35 +.12%
- 2-Year Swap Spread 16.75 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -16.25 +1.0 bp
Economic Gauges:
- 3-Month T-Bill Yield .06% unch.
- China Import Iron Ore Spot $154.20/Metric Tonne unch.
- Citi US Economic Surprise Index -29.9 -.6 point
- 10-Year TIPS Spread 2.56 unch.
Overseas Futures:
- Nikkei Futures: Indicating +79 open in Japan
- DAX Futures: Indicating +6 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/medical/retail/biotech sector longs and emerging markets shorts
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
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On Tuesday, February 5, 2013, the Philippines, EPHE, rose parabolically higher, in a three white flag candlestick pattern, confirming an end to Liberalism’s Age of Nation Investing.
The S&P 500, SPY, bounced 1.0% , largely on Transportation Shares, XTN; this after Monday’s sell off that gave the S&P 500 its biggest percentage decline since mid-November. The benchmark of large cap stocks now stands 3% up this month, and 6% up since the start of the year.
A bounce from strong resistance in the Apparel Retailers, MW, PLCE, RUE, ANN, GPS, ZUMZ, ARO, caused Retail, XRT, to 1.8% rise, presenting a great opportunity to go short the Retail ETF, as well as short Direxion’s 300% Retail ETF, RETL. A bounce higher in Oil, USO, took Natural Gas, UNG, higher, making for a good short selling opportunity, not only in this ETF, but also in Direxion’s 300% Natural Gas ETF, GASL, as in a bear market one sells in rallies, just as in a bull market one buys into dip. Short sell covering caused Eaton, ETN, Texas Instruments, TXN, Estee Lauder, EL, International Paper, IP, Automatic Data Processing, ADP, to rise strongly.
The Yen, FXY, continued lower, which caused Hedged Japan, DXJ, to continue to rally. How much further the Yen, FXY, will continue to go lower is anybody’s guess. The chart of Euro Yen Carry Trade, $XEU:$XJY, that is EUR/JPY, rose rose parabolically higher, as did the 200% short Yen ETF, YCS.
AP reports Ally returns to profit in 4Q as auto loans grow.
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