MARKET COMMENT
November 22, 2006
Unless you care about GM, and we don’t, the markets that
impressed us today were energy, currencies and precious metals.
Phony rumors about a possible platinum ETF issue proved
costly to those sucked into this mess.
There will be some ugly falling action stories as a $130 two-way move in
two days will cause some serious margin calls no doubt. A “guilt by association” effect held back prices
of other precious metals today. In fact,
don’t be surprised to hear of some forced selling of silver and gold to cover
trading losses in platinum.
When stocks are on a run higher it’s because investors are
looking for “earnings” growth. Here are
two casualties [DVY and IBB] where earnings are only a secondary factor.
Everyone’s talking about the low VIX [Volatility Indicator]
which historically when this low means investors are “complacent” and there’s
little “fear”. With a brief exception last summer for example
the VIX has been in a steady decline.
Usually a reading below 20 indicates complacency and above fear. Many market technicians have been scrambling
to redefine the indicators relevance. To
date no one’s discovered anything very meaningful that makes sense of readings
over the past few years.
Elsewhere other sectors we’re pumping featuring include:
Okay, well that’s enough pumping coverage for one
day. Enjoy your Thanksgiving Holiday and
please be safe. For subscribers there
will be no Podcast on Friday unless “all hell breaks out”. But as co-host Greg Newton said: “The only place
all hell breaks out on Friday will be WalMart.” [Or, even Target? Good grief!
6 AM?]
Disclaimer: The ETF
Digest maintains positions in: GLD, SLV, CEF, FDN, HHH, IBB, DVY PAJ, PZI, PIV,
PBW, EWP, ILF, EWA, IFN, TRF and FXI.