iShares are Expanding Single-Country ETF Offerings

iShares has a long list of single-country exchange traded funds (ETFs). Now the provider is getting ready to expand their popular lineup even further. The proposed funds cover everything from the United States to the Philippines.

More single-country ETFs are on the way for iShares, which already touts an impressive list of single-country ETFs. Cinthia Murphy for Index Universe reports that the latest group of proposed funds covers a some areas that are already backed by ETFs, along with some first-of-their-kind funds.

The ETFs are:

iShares MSCI USA Index Fund: The U.S. fund is a diversified ETF that will essentially be a mid- and large-cap portfolio that tracks an index investing in securities from companies in the top 85% of the domestic space by market capitalization.

iShares MSCI Brazil Small Cap Index Fund: iShares’ take on Brazil’s small-cap market is perhaps an attempt to replicate the success Van Eck has had in that segment with its version of a Brazil small cap fund, Market Vectors Brazil Small-Cap (NYSEArca: BRF).

iShares MSCI Egypt Capped Investable Market Index Fund: The Egypt ETF will track an index of 41 companies, with most sector allocations dedicated to financials, industrials and telecommunications services.

iShares MSCI Ireland Capped Investable Market Index Fund: The Ireland fund’s benchmark held 21 names as of October, and focused primarily on consumer staples, financials and materials.

iShares MSCI Russia Capped Index Fund: This will track an index that is a variation of the MSCI Russia Index, the MSCI Russia 25/50 Index. While the new fund will invest in the top 85% of Russia-listed companies by market capitalization, it will also take into account investment diversification requirements that apply to regulated investment companies (RICs), under U.S. law. This fund would go head-to-head with the Market Vectors Russia (NYSEArca: RSX).

iShares MSCI Philippines Investable Market Index Fund: The Philippines ETF will replicate an index of 28 companies, mostly in utilities, telecommunications and financials.

The debuting ETFs focused on Ireland, Egypt and the Philippines could be the first country-specific funds available to investors for each of those economies .

How to Profit by Swing Trading

It’s not exactly breaking news. A buy and hold strategy hasn’t worked for the last decade. You probably know as much if you’ve opened your retirement account statement lately. The Dow, S&P 500, and NASDAQ are all flat or down over the last 10 years.

It’s time to face facts, the old-time buy a few large-cap blue chips and hold them forever strategy has gone the way of the Dodo bird.

So, what’s the answer for this particular market?

Personally I swing. Swing trade that is.

I like swing trading for this market because it takes advantage of momentum… or trading in and out of stocks and sectors that are seeing a temporary boost. There’s no ‘buy and hope’ strategy at play here.

Let’s take a look at how swing trading works.

In a nutshell swing trading is… buying the lows and selling the highs. Ok, I know what you’re thinking… how do I consistently buy the lows and sell the highs? It seems like it is easier said than done.

Although there’s a lot of different ways to approach it, my favourite is looking for technically-based short-term trends. And taking a position to profit from the trend.

Here’s something you might not know; swing traders don’t care why a stock is trending. If the technical’s show there’s a trend, it’s not your job to figure out why. You just want to profit from it.

But here’s the catch… the stock market isn’t just flat over the last 10 years. It’s flat over the last few months too. Lots of volatility but no real trends.

You may be happy to see a flat market – especially after last year. But for swing traders like me a flat market is worse.

So how do you overcome a flat US market?

By not limiting yourself to just the stock market.

Here’s why. You won’t always find a trend in the US stock market. So I’ll trade foreign markets, bonds, commodities and even currencies. Until recently, access to these markets was difficult and often required separate trading accounts.

In the past, many individual investors found it hard to trade these markets. This helped give rise to the notion that a buy and hold strategy is the best way to invest.

Now, there’s an easy way to trade ASX stocks, foreign stocks, bonds, commodities, and currencies using momentum. It’s quick, cheap, painless and you can do it all from one trading account.

Want to know what it is?

That’s right, ETFs (Exchange Traded Funds). These are the one investment that can give you exposure to all of these markets. Today’s ETFs are revolutionizing the ability to trade currencies, commodities, and foreign markets. You can now really drill down and focus on specific subsectors of all these markets.

As I said… follow the trend. If you can’t find it in the US stock market, you now have easy access to an entire array of markets with ETFs.

I believe that the big money over the next few months and years will be found in the ’specialty’ ETFs that are popping up. The value of these ETFs can be derived from commodities like gold, currency pairs, corporate bonds, and any specific subsector you can think of. The list goes on and on.

And now you can go long or short with two or even three times leverage. Talk about spicing things up!

And remember as a swing trader you don’t care why the ETF is trending. The patterns and trends you use as a swing trader hold up regardless of the asset being traded. So you can apply the same technical analysis principles that you use with stocks.

Combining technical analysis, momentum trading, and specialty ETFs isn’t a bad way to trade this market right now. And it sure beats the heck out of buying a few blue chips and holding on for dear life!

Exchange Traded Funds on Total Trader

Exchange Traded Funds offer a broad and diversified exposure to an index of securities making them ideal for diversifying your investment portfolio.

ETFs are passively managed investment funds traded publicly on stock exchanges in the same manner as traditional stocks. An increasingly popular product, ETFs combine the benefits and ease of investing in stocks with the advantages of managed fund investing and ready-made diversification of index tracking.

ETF investing with Total Trader

• Lower management fees than traditional managed funds
• Easy access
• Intraday liquidity
• Bought and sold through major stock exchanges like stocks
• Linked to major market indexes
• Suits both shorter term traders or longer term investors that wants to diversify

ETF Growth

About ETFs

What are Exchange Traded Funds?

Exchange traded funds (ETFs) are index funds or trusts that are listed on an exchange and can be traded in a similar fashion as a single equity. Today, the number of ETFs available continues to grow and diversify. Investors can buy or sell shares in the collective performance of an entire stock portfolio, or a bond portfolio, as a single security. Exchange traded funds allow some of the more favourable features of stock trading, such as liquidity and ease of equity style features to more traditional index investing.

Each ETF tracks an index or benchmark, meaning the objective for an ETF is to replicate the performance of the index or benchmark that the ETF is tracking. ETFs track specific stock, bond, commodity or currency indices, some of which have a regional focus, while others have a sector focus, thus making them ideal for diversifying portfolios

ASX ETFs  

Domestic - Investing in ETFs is easy as they trade in exactly the same was as any other share on the Australian Stock Exchange.

Four of the major providers have ETFs and ETCs on issue on the Australian Stock Exchange. These providers include ETF Securities, iShares, State Street Global Advisers (SSgA) and Vanguard Investments.

ASX code of popular Domestic ETFs (ASX Code – Fund Name)

SFY – SPDR S&P/ASX 50 Fund
STW – SPDR S&P/ASX 200 Fund
SLF – SPDR S&P/ASX 200 A-REIT Fund

Click here for a full list of ETFs availiable on the ASX

Commodity ETFs

Exchange Traded Commodities (ETCs) are similar to ETFs, except they track the performance of an underlying commodity index rather than stock market index. ETCs are also traded in the same manner as stocks but provide exposure to a range of commodities and commodity indices, which include energy, agricultural, metals and softs.

ETCs are open-ended securities, like ETFs, and are also asset backed by physical bullion or commodity (futures) contracts.

Benefits of Commodity ETFs:

• Easy access the markets – ETCs are traded as stocks on major  exchanges
• Low cost (yearly Management Expense Rates as low as 0.39% for some ETCs)
• High liquidity (matching the underlying commodities physical or futures markets)
• Daily transparent pricing
• No margin calls, need to roll contracts or risk of delivery associated with Futures

Emerging Markets ETFs

ETFs are a great way to invest in often difficult to access emerging markets such as China, India and South America. An emerging market economy is defined as an economy with low to middle per capita income. Such countries constitute approximately 80% of the global population and represent about 20% of the world’s economies.

Major ETF Providers

http://www.claymore.com/etfs - Claymore Securities offers a lineup of ETFs that track key market segments.

http://www.holdrs.com - HOLDRs (Holding Company Depository Receipts) are a group of unmanaged sector portfolios developed by Merrill Lynch that do not track specific equity indexes.

http://www.iShares.com -  iShares are a family of ETFs managed by Barclays Global Investors (BGI). Products cover multiple asset classes including stocks, bonds, and commodities.

http://www.iPathetn.com -  iPath are a series of ETNs managed by Barclays Bank that cover currency, commodity and emerging market indexes.

http://www.powershares.com -  The PowerShares offers a family of ETFs that utilize a proprietary model called Intellidex to screen a large group of stocks for those that have the best potential for capital growth. Each ETF portfolio strives to keep market exposure to specific segments within the U.S. economy and is rebalanced quarterly.

http://www.proshares.com -  ProShares offers a lineup of ETFs that are leveraged and inverse performing funds.

http://www.rydexfunds.com -  Rydex Investments offers a lineup of ETFs that offer both long market exposure and inverse market performance.

http://www.spdrindex.com -  The Select Sector SPDRs are ETFs designed to follow the 9 key industry sectors within the S&P 500.

http://www.spdrs.com -  State Street Global Advisors manages a diverse line of ETFs that cover major stock and bond indexes along with specialized asset classes like gold (GLD).

http://www.vanguard.com/etf -  Vanguard ETFs follow broadly diversified stock and bond indexes. Fund investors that own conventional Vanguard index mutual funds may convert to Vanguard’s ETF share class for a small fee.

http://www.wisdomtree.com -  WisdomTree Investments offers ETFs that are fundamentally weighted according to dividends and earnings.

CFDs on Exchange Traded Funds (ETFs)

We offer a range of CFD over ETFs which allows you to have all the benefits of an ETF but with added gearing. Find out more about CFDs

Country P/E Ratios

taking a look at valuations, growth expectations, and stock market performance for more than 20 countries that have trackable ETFs.   Russia currently has the lowest P/E ratio at 6, followed by Italy (10) and France (11).  At 14, the US is more attractive based on its P/E ratio than most countries.  Taiwan has the highest P/E at 60, and the UK is surprisingly bad at 34.  It’s valuation is worse than China’s.  Germany also has a very high P/E ratio at 27.

Source: Bespoken Research

ETF, Up 100% – On Verge of Breakout

After getting absolutely crushed in 2008 and the first part of 2009, preferred stocks have made a nice comeback.  Below is a chart of the iShares S&P US Preferred Stock Index ETF (PFF).  Since bottoming in March, PFF is up 106.71% and is trying to break out from its January highs. 

Source: Bespoken Research

View: ishares ETFs on eBridge Trader

Emerging Markets ETF

Exchange-traded funds of Asian, Latin and even some European countries have been significantly outperforming the Standard & Poor’s 500 lately.

MSCI emerging markets ETF  moved to a fresh new high last week . Compare that to the S&P 500 as it threatened to move below a near-term support.

Source: Michael Kanh

Learn how to diversify your portfolio with Exchange Traded Funds – it is as easy as trading stock.

Emerging Markets: Russia’s Market Has Surged

MOSCOW – Despite continuing weakness in the Russian economy, the stock exchange here has surged to become the best performing in the world, after being the worst last fall.

Dmitry Astakhov, via Reuters/RIA Novosti, via Kremlin
With an economy heavily skewed toward energy, Russia saw its stock market rebound to become one of the world’s best performers after falling the most last fall. Here, President Dmitry Medvedev, center, visits an oil refinery in the city of Khabarovsk.
After the sell-off last year pushed the valuations of Russian companies to record lows, rising energy prices in recent months have drawn investors back into the market, traders said, even as the government has twice downgraded its expectations for growth this year.Other big emerging markets, including China, India and Brazil, have rebounded sharply in recent months on signs that the fractured global economy may be beginning to heal, but none have been more buoyant than Russia.

When the authorities reported this month that industrial output declined 16.9 percent in April, the stock market still continued a five-day streak.

“Investors are not analyzing macroeconomics when deciding whether to invest in Russia,” the chief economist in Moscow for Merrill Lynch, Yulia Tseplayeva, said.

“They look at oil prices, and believe that when oil prices rise so will the Russian market,” she said. “And that is true.”

Officials now expect a contraction of more than 6 percent in the Russian economy before it begins to improve. Yet investors who braved the yo-yo bounce in the Russian market have profited handsomely.

The Micex index of major Russian company shares, for example, is up 105 percent after bottoming out on Oct. 27. It rose 19.66 points, or 1.9 percent, on Friday to close at 1,054.03.

For some investors, the very air of dismal news hanging over the country inspired contrarian bets in February and March that shares were oversold.

“It seemed a consensus emerged generally that Eastern Europe was going to hell,” Ian Hague, a partner at Firebird Capital Management, a New York hedge fund that focuses on the former Soviet Union, said by telephone. “When you see that, it is very bullish. Because the reality is never as bad as people’s fears.”

Firebird, after selling Russian shares in the second half of 2008, reinvested in February, he said.

But for all Moscow’s effort to diversify the economy, the rise in Russian equity values has closely tracked the price of oil, by far its largest export commodity – much as the market plunge last fall coincided with the collapse of oil prices.

Money is trickling back into Russian investments. For now, the inflow has not balanced the outflow of capital as companies repay foreign banks for loans that are not being rolled over. But the new money coming in was very nearly equal to the outflow in April, according to an estimate by Merrill Lynch.

In that month, the central bank reported a net loss of $2 billion of capital. Since roughly $10 billion in loan payments came due in April, the investor inflow probably was about $8 billion for the month, the bank said.

And the Russian stock market bounce came in spite of looming troubles in the real economy that analysts say make it look tenuous.

But given Russia’s dependence on the boom-and-bust commodity price cycles, a lack of so-called long money investing in the economy and a good deal of jitters about political stability and relations with the West, Russia’s stock market probably will remain highly volatile.

In fact, since its inception after the collapse of the Soviet Union, the Russian stock market has been either in the top five performing markets in the world or the bottom five in every year except one, according to Renaissance Capital, a Moscow brokerage.

Source: ANDREW E. KRAMER

View Emerging Markets ETFs on eBridge

Time for a New Strategy? ETFs are Becoming very popular.

IF the last 18 months have taught Americans anything, it’s that market collapses don’t discriminate. Even the most sophisticated and affluent investors lost big chunks of their fortunes. Access to the most exclusive hedge funds did not always limit the damage, as many participants had hoped it would.

As a result, a new mentality has emerged among some investors, who are rethinking the traditional approach to asset allocation. The upheaval in the markets and in the broader economy has led them to question long-honored principles of investing and to sound a death knell, at least for now, for the buy-and-hold mind-set.Moving away from the conventional mix of stocks, bonds and cash, many affluent investors and their advisers are turning to alternative investments – like managed futures and Exchange Traded Funds .

And some of the wealthiest investors are beginning to shed the bunker mentality, at least long enough to exploit shorter-term opportunities.

“In an environment of extraordinary uncertainty, the traditional role of asset allocation and long-term investing is far more difficult,” said Michael Sonnenfeldt, chief executive of Tiger 21, a forum for wealthy investors who meet monthly to discuss financial matters. “Many of our members believe we are in a trader’s market where long-term investing should be shunned but trading opportunities should be seized.”

Indeed, many investors are reluctant to place longer term bets and cling to larger cash allocations, anticipating continued volatility.

“The landscape going forward is extremely uncertain,” said Hans Olsen, chief investment officer at J.P. Morgan’s private wealth management unit. “There are many possible outcomes. You need to have a portfolio structured to reflect many possible futures. It comes down to the first principles of diversification.”

But how you define diversification is evolving.

“In a bull market, we don’t tend to care that our portfolio investments seem to behave the same, but I believe this bear market has uncovered a long-term problem,” said Jerry Verseput, a financial planner in El Dorado Hills, Calif., noting that technology and globalization have diluted the effectiveness of diversification based on company size and location. So he has embraced a new approach, using a portfolio of exchange-traded funds, or E.T.F.’s, that track different sectors of the economy, like energy and health care.

Below, several investment professionals describe how their philosophies have changed and how they are reallocating their portfolios. And one stalwart traditionalist explains why he thinks all of this is a lousy idea.
PASSIVE NO MORE

Cathy Pareto, a fee-only adviser in Coral Gables, Fla., came from the passive school of investing, where you invest your portfolio in a diversified basket of index funds. But in today’s world, she says, you can be too passive.

“Buy-and-hold was the mantra, but in light of recent events and a dramatically different world, those tenets may not always apply,” Ms. Pareto said.

She now dedicates 5 to 10 percent of her clients’ portfolios to more tactical moves. Currently, those include sector E.T.F.’s, like consumer staples, global materials and technology, as well as an E.T.F. that bets against real estate investment trusts. “That has been a radical change for me,” she said.

One thing she likes about E.T.F.’s is their trading flexibility. Unlike mutual funds, E.T.F.’s can be traded just like stocks.
A PASSION FOR CASH
Paul Speargas, a senior client adviser at WMS Partners, a family office and wealth advisory firm in Towson, Md., is looking in some unlikely spots for investments – notably those that do not move in line with the market.

His firm has purchased streams of cash – or discounted cash flows – from people who have been awarded large sums of money, like lottery winnings or court settlements, but receive them as annuities.

A TRADITIONALIST STANDS FIRM
Rick Ferri, founder of Portfolio Solutions, remains a die-hard buy-and-hold investor, scoffing at many notions that some other advisers now subscribe to.

Investors can achieve adequate diversification with a handful of index funds and E.T.F.’s, he said, though he is quick to acknowledge that the current market is a rough one. But it has not altered his view on asset allocation, and his investment philosophy remains intact: Don’t take more risk than you need to achieve your financial goals, and calibrate those needs with what your stomach can handle.

Source: Tara Siegel Bernard

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Year to Date Country Returns; US Lags

With global equity markets still in rally mode, below we highlight the year to date performance of the major indices for 83 countries around the world.  After nearly every country was down earlier in the year, 62 out of the 83 are now up in 2009.  Peru is up the most at 72.92%, while Costa Rica is down the most at -39.94%.  And the BRIC (Brazil, Russia, India, China) countries are significantly outperforming the developed G-7 countries.  Russia, India, and China rank 2nd, 3rd, and 4th in terms of year to date performance, and Brazil isn’t far behind in 10th place.  Canada has been the best performing G-7 country with a gain of 12.62% in 2009, but it ranks 35th out of 83.  The rest of the G-7 countries are bunched up in the 0%-5% range, which is closer to the bottom of the list than the top.  And the US is the worst of the seven with gains of less than 1%.  While the markets here in the states have rallied nicely off of their March lows, most other countries have bounced back even more 2009.

Source: Bespoken Research

India Has Biggest One-Day Change Ever – Trading ETFs

Get exposure to India’s Senex with ETFs,  Exchange Traded Funds.

India’s Sensex rallied 17.34% yesterday on unexpected election results for its biggest one-day gain ever in its 30 year history.  As shown in the bottom table below, the next biggest one-day gain came in March 1992 when the index rallied 13.14%.  From its peak in January 2008 to its recent low, the Sensex dropped 60.91%.  From its low, however, the index has now rallied 75.04% in just over two months.  Even after this 75% gain, India needs to rally another 46.13% to reach its old highs.

Source: Bespok Research

Exchange Traded Funds: Trading Funds Like Stocks

One of the hottest investment trends right now is the use of exchange traded funds (ETFs). ETFs are distinguished by their low costs, diversification and the ease with which they are traded – like stocks. ETFs are known for their “average Joe” appeal, as well as their ability to cater to high-end investors. Because ETFs are traded like stocks, there are no minimums and you can buy only one share if you like. For the average investor, this makes ETFs easy and, with the advent of low-cost online brokerages, cost-efficient. Dollar cost averaging is now something that can be profitable for ordinary folks who want to invest in ETFs. For the sophisticated investor, ETF strategies include options, pairs trading and even a bit of side-stepping that can help you avoid the wash-sale rule.

What are exchange traded funds?

An ETF is a collection of stocks. However, that entire collection is traded on a market as if it were a single investment. A large investment institution – such as Vanguard or Fidelity – takes some of its holdings (in our example we’ll use stocks) and put together a basket of investments from a specific index. This could be from a clean energy index, the S&P 500, the Wilshire, the Russell, the Dow or any other index that one wants to track. The shares are deposited with a holder. The holder issues what are called creation units. It’s way for big institutional investors to buy into a fund without having to use cash. This creation unit that the firm now owns contains a block of shares of the ETF. For a creation unit, a block of 50,000 shares is pretty standard. The institutional investors break up the creation units into individual ETF shares that hold small portions of each of the different stocks in the unit. Now, each individual ETF share can be sold like a stock. This means that when you buy and sell an ETF, you will be charged the same fees/commissions as with any other stock trade.

ETFs don’t just come in stock varieties, however. There are bond, commodity and currencies ETFs as well. It is possible to build a diverse investment portfolio entirely with ETFs, using different types of these funds to create an asset allocation that you prefer. For the average investor, ETFs consisting of stocks and bonds are generally used to create the asset allocation desired. For more advanced (and risk tolerant) investors, it is possible to add faster growth to a portfolio by mixing in currencies and commodities, and adding ETF options. Because ETFs are traded just like stocks, day traders can become involved, buying and selling whenever they want. (With mutual funds, you only buy at the end of the day for the net asset value – NAV.) It is even possible to short when investing with exchange traded funds. Exchange traded funds are no longer just for investing in indexes, they can now be actively managed as well.

Exchange traded notes (ETNs) appear to be similar to ETFs in most characteristics but there are some key structural differences. ETNs are basically debt instruments issued that may track an index and as such do not impart any fractional ownership of the portfolio of companies in the index. With ETNs, an investor is not only taking on the investment risk of the index, but also the issuer risk, meaning the issuer of the ETN may not be able to pay up when the note matures. ETNs therefore do not have a NAV technically as there is no underlying portfolio, just an indicated value which is kept close to the index it tracks by offering arbitrage possibilities to large investors (similar to ETFs).

ETFs: Dividends and taxes

One of the things many people like about mutual funds is the automatic dividend reinvestment options. With ETFs, that ability is not available. Yes, you can receive dividends from ETF investments. However, just as is done with a regular stock, the money shows up in your brokerage account. When you reinvest that money, you will be charged a fee, since you will have to execute another trade. It is possible to get around this by looking for a brokerage that allows you to reinvest dividends at no charge to you. They do exist.

There are myths that ETFs offer you a tax-free option. This is not true. While you can use ETFs in a tax-advantaged retirement account (reduce costs by investing quarterly instead of monthly), there are still other considerations. You have to pay taxes on capital gains and dividends received. Happily, though, ETFs generally do not have the sort of selling that would result in undistributed capital gains. Changes to underlying indexes, though, or massive sales of underlying holdings, could cause tax issues down the road. Still, ETFs that track an index do offer tax efficient investments as the funds are typically passively managed. Unlike traditional mutual funds, redemptions from some investors will not trigger capital gains implications for other investors in the ETFs so they can also be more tax efficient than an equivalent mutual fund.

ETFs can make solid additions to an investment portfolio. However, realize that there are risks involved, and that there are costs – albeit usually low – and taxes involved. There are multiple resources on the internet to research ETFs. Morningstar can be used to research ETFs in addition to traditional mutual funds. ETFConnect is another website that is dedicated to ETFs.

 Source: Personal Dividend

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Broader Market Technical Analysis Update

by Roy Martens

The big picture hasn’t changed much this past month. The most surprising news, at least for the ones in the dark, was that China is hoarding Gold. Their reserves have risen a lot and they intend to expand their stockpile even further. Although this is very good news for Gold in the long run it didn’t really have a big impact on the Gold price last month, which is kind of surprising.

Such news is huge because the monetary reserves of China are enormous and although they say they will not shift their reserves into Gold at this time, I wonder if they will still hold that position if the dollar should tank.

Most likely this positive news was put aside by the announcement that the IMF intends to sell a lot of its Gold in order to raise cash and support the various countries that are in trouble, which should have a negative impact. We, however, have to look past this negative force for Gold because once the Gold reserves of the IMF (and other Central Banks) are gone there is nothing left to cap the price of Gold!

Due to the selling of the IMF ,Gold could suffer in the short term but it is my opinion that this fall (should it happen) will be a very good entry level for people that don’t already own the yellow metal.

As the Gold chart will show from a technical point of view, Gold is currently at an important stage and this upcoming month could be the set up for a rise to the highs or a fall to retest the $700 level (Impact of IMF selling Gold).

Whatever the outcome, Gold bulls are certain that Gold will reclaim its power further down the road. Will China be the only one to see the light? I don’t think so, there will be many other countries that will follow in China’s footsteps and I wouldn’t be surprised if a few of them, for example the other BRIC (Brazil, Russia, India) countries are already doing the same as China.

All charts are courtesy of Stockcharts.com

GOLD

The picture for Gold hasn’t changed much this last month. The flag pattern is still intact.

However, this pattern can’t continue for much longer because it will get too big to remain a valid flag, rather, it will then change into a channel. For now the blue lines are the most important ones to watch. They have to support Gold together with the 34 w. MA at $859.

If this level fails we can brace ourselves for a big fall, because the $700 will then be the next target again. As long as the $850 holds we expect Gold to break out of the flag pattern and start a new run at the highs.

SILVER

The Silver chart remains fairly positive. The flag pattern is still intact and completion doesn’t seem that far off.

The current correction wave could be a wave 2 but it is still too early to tell so this EW count isn’t valid yet. The chart is improving further with the 24 w. MA starting to curl up in support of an upcoming move. This move could be the wave 3 higher triggered by a breakout from the pattern.

The RSI and MACD are in perfect position to move higher and a new buy signal in the DMI (cross of buying power over selling power) will follow quickly if Silver moves higher from here on.

OIL

Oil is taking a breather after the first breakout attempt failed. It successfully re-tested the

17 w. MA for support and is moving higher again towards the resistance zone and the 34 w. MA.

The 17 w. MA is rising and should support Oil in the upcoming attempt to break the heavy resistance zone. If Oil succeeds it will trigger a huge buy signal because it will automatically mean a break above the 34 w. MA, a new LT buy signal. The first target after a breakout will be the $80 level ($78 is a 38.2% monthly fibo level shown in last month’s chart).

The technical conditions are improving slowly but are still in negative territory (RSI, MACD) while the selling power remains in charge, meaning that the current move higher is still ‘just’ a correction in the ruling downtrend.

USD

The Bulls are doing a good job supporting the USD. They have manage dto keep it above the 34 w. MA and the uptrend is still very much intact.

The downward pressure is still there and keeps building so the bulls aren’t out of the woods yet. As long as the 34 w. MA holds firm the bulls remain in the driver seat, but once it is taken out we will see a big sell signal and a trigger for a huge fall towards the 72 level.

The technical conditions are still positive but this can change very quickly. The RSI is a whisker away from triggering a sell signal and the MACD is on its way towards the 0 line. This upcoming month will be very interesting to watch.

COPPER

The chart for Copper is coming along as expected and the presented EW count fits nicely into the monthly chart that was shown last month.

The technical conditions have improved further and are in perfect position to get this wave 5 underway. The RSI is back above the 50 level and should start rising from here, the buying power in the DMI is trying to take over and the MACD is steadily rising towards the 0 line and the magenta resistance line.

If copper breaks above the resistance zone the indicators all turn positive at once and could trigger a very big move higher. The $300 level could then come within reach very fast.

iShares ETFs on the ASX

A world of Exchange Traded Funds now trading on the ASX.

Fund Name

ASX Code

MEF

Total Net Assets* (A$) (000)  As at  01 May, 2009

Monthly Holdings As at  30 Apr, 2009

THE TRADING SCREEN FOR iShares® EXCHANGE TRADED FUNDS

Although iShares Exchange Traded Funds (ETFs) trade like shares on the ASX, there are key differences to consider when looking at the trading screen. With shares, it is reasonable to assume that the greater the market depth, the more liquid the stock. This, however, is not the case with iShares ETFs.

The fundamental concept, unique to iShares ETFs, when viewing the order book is:

The trading screen accurately represents the market price of an iShares ETF, not the larger volumes which are able to be bought or sold.

Below is a snapshot of a trading screen for iShares MSCI EAFE (ASX: IVE). On first glance, and by applying the same reasoning as you would when buying shares, the iShares ETF may appear thinly traded and therefore potentially difficult to sell. But, given this is an iShares ETF and by applying the correct reasoning, the screen tells a different story:

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Country ETFs Overbought

From our daily ETF Trends report at Bespoke Premium, below we highlight various country ETFs and their current trading levels.  An ETF becomes overbought when it trades more than one standard deviation above its 50-day moving average.  The % overbought number is how far the ETF is currently above this initial overbought level.  This is the first time in quite awhile that all country ETFs have been overbought at the same time, and it’s a sign that markets around the world are extended from their normal trading ranges.  The Taiwan ETF is the most overbought at 13.32%, followed by Italy (8.34%), India (7.92%), Brazil (7.14%), Sweden (7.08%), and South Korea (7.08%).  Japan is the least overbought at 1.4%.

Source: Bespoken Research

Key ETF Performance

Below we highlight the 1-day, 1-week, and 1-month performance of key ETFs across all asset classes.  As shown, the last month has been huge for equity ETFs across the globe, as stock indices everywhere have rallied from 20% to 40%.  In the US, the Financial ETF (XLF) has been the best performing sector ETF with a gain of 50%.  Health Care (XLV) has rallied the least at 10%.  Internationally, India (INP) and Italy (EWI) have rallied the most at 38%.  Japan (EWJ) has rallied the least at 19%.  The oil ETF (USO) is up 5.5% over the last month, but natural gas (UNG), gold (GLD), and silver (SLV) are down.  And fixed income ETFs are pretty much flat.  With gains like these in such a short time frame, it wouldn’t be a bad thing for stocks to take a breather, as long as the prior lows aren’t breached.

Source: Bespoken Research

Commodity ETFs

Commodity EFTs available on Tricom Trader

Investing in China and other Emerging Markets through ETFs

Tricom Trades gives investors the ability to invest in the emerging markets such as China, India, Brazil, and Russia, while still keeping their capital in Australia.

This is done through Exchange Traded Funds (ETFs). These funds are designed to track the stock exchange of the nation that it represents, moving up or down with the underlying index. ETFs have become increasingly popular with investor wanting to catch the next wave of growth in these emerging markets.

Two commodity ETFs about to reverse their downtrends

The stock market took a breather from its recent upward sprint yesterday, as a round of afternoon profit taking reversed morning gains. All the major indices finished lower, but divergence among the main stock market indexes was quite evident. The Dow Jones Industrial Average slipped just 0.1% and the S&P 500 lost only 0.4%. However, relative weakness in the tech arena weighed on the Nasdaq Composite, which fell 1.9%. The small-cap Russell 2000 similarly declined 1.7%, while the S&P Midcap 400 receded 1.4%. All the major indices closed at their intraday lows.

Under the surface, the worst thing about yesterday’s session was the higher volume that accompanied the pullback. Total volume in the NYSE swelled 17%. Turnover in the Nasdaq rose 3% above the previous day’s level. The higher volume losses caused both the S&P 500 and Nasdaq Composite to register a bearish “distribution day,” the first instance of institutional selling since the current rally began. Although an occasional “distribution day” is normal in uptrending markets, a round of higher volume losses so soon after the start of a developing rally is negative. Just one more “distribution day” this week could kill the broad market’s fledgling short-term uptrend, but stocks could just as easily shake off yesterday’s bearish impact of institutional selling if the major indices see another round of higher volume gains instead. We’ll be closely monitoring the volume patterns of the market over the next several days, as volume is one of the few technical indicators that never lies. Furthermore, volume patterns tend to predict price, making volume analysis a leading, not lagging, indicator.

For the past week, U.S. Oil Fund (USO) has been consolidating just below pivotal resistance of its 50-day moving average, holding above support of its 20-day exponential moving average. On March 9 and 10, USO probed above its 50-day MA on an intraday basis, but failed to close above it. But yesterday, USO closed just forty cents below its 50-day MA, positioning it to breakout above its 50-day MA for the first time since July of 2008. Shown on the chart below, we like USO for buy entry above the $29 area:

Another commodity ETF that may be in play this week is DB Commodity Index Tracking Fund (DBC). After forming a base at its lows over the past month, DBC rallied to close just above the high of that month-long consolidation yesterday. If it gains another thirty cents in today’s session, DBC will have also moved above its 50-day MA. This would break the intermediate-term downtrend line, shown on the daily chart below:

A scan of several hundred ETFs last night revealed very few bullish chart patterns. Likewise, quality short setups were not that plentiful either. Specifically, the issue is that last week’s rally caused a majority of stocks and ETFs to move into “no man’s land,” trapped between resistance of their intermediate-term downtrend lines above, and support of their short-term hourly uptrend lines below. Since longer-term trend lines hold more weight than shorter-term trend lines, and the intermediate-term downtrends have not yet reversed, aggressively buying at current levels would carry a negative reward-risk ratio. Conversely, since short-term sentiment has definitely changed over the past week, we’re not yet thrilled with the idea of new short positions into the current upward momentum. The daily chart of the S&P 500 below illustrates the present “no man’s land” position of the index:

Overall, our plan remains the same as we’ve been detailing for the past several days. We simply want the market to prove its ability to recover from a downside correction of the current short-term rally, something it’s been unable to do in past months. If the major indices register another day of losses today, but subsequently rally back to their preceding highs later in the week, better buy setups should start to arise. If so, we would begin to enter new long positions in anticipation of a bullish reversal of the broad market’s intermediate-term downtrend. In the event stocks fail to pull back any further this week, we’ll at least look for a couple days of sideways price consolidation, then plan to buy a subsequent breakout above the high of the consolidation. Don’t worry about missing “the bottom,” as there will be plenty of opportunities to profit if the short-term rally materializes into a tradeable, intermediate-term uptrend.

Long – DGP, SLV, UGA
Short – (none)

Are platinum, palladium and silver prices sustainable?

“Investors searching for a safe haven have pushed gold prices to $950 a troy ounce. In their rush to safety, they have also boosted the price of silver, platinum and palladium.

“In fact, the well-reported 7.5% rise in gold prices this year pales against the 20.5% gain in silver, 14.5% rise in platinum and 15.6% increase in palladium.

“Are the gains in these three precious metals sustainable? Part of the surge is a correction from last year’s crash, which saw platinum plunging from more than $2,000 an ounce to less than $800 in three months.

“Gold spikes traditionally boost other precious metals and this time is no exception, with a surge in exchange-traded funds’ holdings of silver, platinum and palladium. But investors should note that, even if usually grouped under the precious metals umbrella, these three resemble industrial metals more closely, albeit expensive ones.

“Platinum and palladium are used for catalytic converters in the automotive industry, accounting for 60% of their consumption. And for silver, electronics is a large consumer.

“For these three metals, demand for jewellery is less important than for gold. The supply side, which last year boosted prices – particularly for platinum – now looks less supportive, too. As HSBC says: ‘After many years of deficit, we anticipate that the platinum market will swing into a surplus  …  in 2009.’ Silver and palladium face a similarly loose market.

“Against that backdrop, investors will need to corner the market and sharply increase their holdings if silver, platinum and palladium prices are to sustain their upward trajectory. Further price gains are possible as long as the metals benefit from safe-haven buying. But without the support of industrial demand, any upside is probably limited.”

Source: Javier Blas, Financial Times, February 16, 2009.

Market is Bottoming, Equities VS Gold Bullion

by Chris Vermeulen
Stock market looks like it has bottomed forming a similar pattern as it did in 2003. What is the better investment during an opportunity like this if this is the bottom: Stocks, Gold Bullion or Mining Stocks? The charts below will really open your eyes as to how similar today’s W looking bottom is to the W shaped bottom in 2003. Of course 6 years later the markets trade and move faster than ever before because of technology allowing traders to track and trade stocks from anywhere with a click of a button. So this years bottom formed much quicker. Traders, individual investors, hedge funds, financial institutions and even some of the guys on CNBC are starting to buy stocks and etfs (exchange traded funds) at these price levels. I remember the market bottom in 2003 and it was much similar to the type of energy buzzing these past few weeks. Of course there is a lot more drama with Obama as president, Printing US Dollars, Scandals and bad news hitting the market day after day. But what makes all this normal is that it cannot get much worse in the news and everyone is expecting it for months to follow. Traders and investors don’t even flinch when bad news comes out anymore and to top it off the SP500 has formed the same pattern it did during the last bear market bottom in 2003. Check out these charts below. Performance Chart of SP500, Russell 2000, Gold Bullion and Gold Miner Stocks This chart shows how well different investments performed during the last bull market. The SP500 was the steady gainer posting a 95% gain; Gold Miners Stocks posted a whopping 210% gain but had wild swings which were big enough to shake out even the best traders. Gold bullion and the Russell 2000 performed very well providing a 130% profit with manageable price swings. The Market Bottom Pattern – 2003 & 2009 Compared Take a look at these charts as I compare the current stock market bottom to what we saw in 2003. The charts are shown from the all time high before the bear market started. Currently Bear Market Melt Down Pattern – 2008-2009 2002-2003 Bear Market Melt Down Pattern Today’s SP500 Chart Pattern Feb 2 2003 SP500 Chart Pattern Stock Market Bottom Pattern Conclusion: As you can see from the charts above, it’s pretty amazing how similar things look between the two bear markets in the SP500. I don’t know if that’s what’s really interesting or the fact that both bear markets had the light volume Christmas Rally just before things reverse? Or that the bear market could end in the same month as it did last time? Either way I though this was worth pointing out to everyone. I recommend you start thinking about putting some long term money to work giving it at least 4 years to mature. Today I started investing some long term money with some great looking Canadian ETFs for dividends, Growth and commodities. There are tones of ETFs in the USA for picking what you think will perform nicely during the next bull market.