MARKET COMMENT
January 16, 2007
You wouldn’t want to be manning the phones at Claymore
Securities today since their new Macro Oil ETFs are
wildly out of phase with their intended function.
DCR [Claymore Macro Down
Oil ETF] hasn’t given investors the benefit of the risk assumed and the reward
realized.
Investors in DCR per Claymore’s
press release: “…give investors an excellent opportunity to capitalize on oil’s
upward or downward movement.”
That’s the
intention anyway.
Today crude oil prices
were down nearly 3%, but DCR was up 2%.
Say again?
That’s right.
And to make matters even more bizarre UCR was
also down over 2%.
What’s the problem?
According to executives at Claymore when queried about the
tracking errors on Friday they were pretty ticked off themselves pointing the
finger at specialist firm Bear Wagner [think Bear Stearns] for poor market
making.
[It wouldn’t be the first time
specialists have been accused of ripping off their customers.]
And, no, I don’t want to hear about crude oil
contracts being in “contango” or some such other
nonsense.
Claymore realizes it’s more
than just a problem and an embarrassment, it’s downright misleading.
They’re tying to add more AP’s [Authorized
Participants] for the stock.
But, I
guess they weren’t there today that’s for sure.
Therefore with some new ETFs
it’s better to stand back and watch their performance for awhile.
The big news story today beyond the continuing fall in
commodity prices was the poor manufacturing data from the New York region.
Also Symantec [down 12%] and Cisco’s [down
3%] downgrades didn’t help tech.
Frankly, it’s amazing that tech did as well as it did.
Unfortunately, after the bell Intel’s
earnings were a penny shy although their revenues were on the high side and
company outlook was positive.
Nevertheless, in the after hours, the stock is down 2.5%.
From all news and statistical data fresh money is enamored
by overseas markets.
That still seems the
case.
Judging by the reaction to Intel’s earnings this evening,
tech could have some problems tomorrow.
But things can change quickly.
There’s a lot going to happen this week from inflation data
to options expiration.
Stay flexible and
be patient above all.
Have a pleasant evening.
Disclaimer:
Among
other issues the ETF Digest maintains positions in: QQQQ, KCE, FDN, IGN, EEM,
IEV, FXI, INP, EWJ, EWM and EWW.