Stocks Higher into Final Hour on Lower Long-Term Rates, Diminished Syria Intervention Fears, Global Growth Optimism, Homebuilding/Healthcare Sector Strength
Broad Equity Market Tone:
- Advance/Decline Line: Modestly Lower
- Sector Performance: Mixed
- Market Leading Stocks: Performing In Line
Equity Investor Angst:
- Volatility(VIX) 14.04 -3.37%
- Euro/Yen Carry Return Index 138.63 -.18%
- Emerging Markets Currency Volatility(VXY) 10.40 -.67%
- S&P 500 Implied Correlation 45.17 -1.89%
- ISE Sentiment Index 118.0 +31.11%
- Total Put/Call .91 +13.75%
Credit Investor Angst:
- North American Investment Grade CDS Index 76.55 -1.86%
- European Financial Sector CDS Index 139.14 -.03%
- Western Europe Sovereign Debt CDS Index 90.0 -.39%
- Emerging Market CDS Index 306.55 -4.09%
- 2-Year Swap Spread 15.25 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -8.5 +.25 bp
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- China Import Iron Ore Spot $135.10/Metric Tonne -.07%
- Citi US Economic Surprise Index 53.50 unch.
- Citi Emerging Markets Economic Surprise Index -5.90 +3.6 points
- 10-Year TIPS Spread 2.13 +2 bps
Overseas Futures:
- Nikkei Futures: Indicating +50 open in Japan
- DAX Futures: Indicating +7 open in Germany
Portfolio:
- Higher: On gains in my tech/medical/retail sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
- Market Exposure: 50% Net Long
1 comment:
On Wednesday, September, 11, 2013, Volatility, traded lower. Italy, EWI, Finland, EFNL, Spain, EWP, Ireland, EIRL, Germany, EWG, and Greece, GREK, traded higher, taking the Eurozone, EZU, to a new rally high. Poland, EPOL, Israel, EIS, Norway, NORW, Sweden, EWD, and the UK, EWU, traded higher.
On September 11, 2013, the world passed through an epic pivot point on the topping out of stock wealth, VT, as well as exhaustion of the world central banks' monetary authority to stimulate global growth and trade, as the US Federal Reserve has crossed the Rubicon of sound monetary policy and has made "money good" investments bad.
The most toxic of debt, such as Fidelity's Distressed Investments, FAGIX, specifically assets taken in by the US Federal Reserve under QE1, Junk Bonds, JNK, Emerging Market Bonds, EMB, and Eurozone Debt, EU, have been the credit basis of Liberalism's Grand Finale Stock Rally that that began June 2012 with a Euro Yen, EUR/JPY, currency carry rally, and attained its zenith on September 11, 2013, at 133, with Nation Investment, EFA, World Stocks, VT, Eurozone Stocks, EZU, and Global Industrial Producers, FXR, all topping out in value.
Major World Currencies, DBV, and Emerging Market Currencies, CEW, have been trading lower since May 2013, as competitive currency devaluation is underway on debt deflation, in particular World Treasury Bonds, BWX, and Mortgage Backed Bonds, MBB.
The seigniorage, that is the moneyness of the Milton Friedman Free To Choose Floating Currency Regime, based upon national sovereignty of democratic states, failed on May 21, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, stimulating currencies to fail, giving confidence to the concept that regionalism is rising to replace capitalism and European socialism and Greek Socialism, with the result being that Large Cap Dividend Stocks, Excluding Financials, DTN, such as S&P Telecom, IST, Utilities, XLU, and Pharmaceuticals, PJP, are no longer underwriting Dividend Growth, VIG.
The global debt bubble served to leverage up the most speculative of stocks, such as the vice stocks held in the Fidelity Mutual Fund VICEX, the Casino and Resorts ETF, BJK, as well as Small Cap Value Shares, RZV, such as PSUN, with the result being that the dynamos of global growth and corporate profitability are winding down, and the dynamos of regional security, stability and sustainability are winding up regionalism, and terminating the concept of investment choice.
Investors should start thinking an investment strategy that is based upon the concept that regional leaders, such as the EU Finance Ministers, and regional bodies such as the ECB, are going to introduce regional governance with new taxes, bank deposit bailins, and capital controls.
The topping out of the EUR/JPY at 133 on September 11, 2013, has opened the door to the short selling opportunity of a lifetime where one should commence selling into rallies as they appear, as in a bull market one buys in dips, but in a bear market one sells into pips.
The 35 ETFs and Stocks seen in this Finviz Screener http://tinyurl.com/pd3pqsw
are excellent short selling opportunities; these being XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP, TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, SPHB, FXR, IGN, BJK, PBJ, EFNL, YAO, NKY, SEA, IX, PRAA, GNW, LYG.
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