Monday, January 05, 2009

20090105 PM, APL DZZ MFC PPD TRAK TLT VIX XLF Fund Rebalancing

DJIA 8,952.89 -81.80
NASDAQ 1,628.03 -4.18
SP500 927.45 -4.35. Can short S&P 500 down to 850s area. May be a fast move down - in a week. Watch the volume going into 900 to 850s.
Metals lower, oil up. Oil will find good resistance at 49 and 50. Yearly commodity fund rebalancing is blamed for gold/oil sell-off.
GLD 84.48 -1.75. Looks to go lower over next week.
DZZ 26.04 +.97. Gold double short.

APL 7.97 +.64. Took partial profit this morning. Look to take all profits soon, or hedge by selling covered calls.
UCO 17.16 +1.5. Took proceeds from APL and went long UCO today for swing trade.

VIX 39.08 -.11. Lower price than last three months of trading. If market volatility increases and indices sell off over the next week, the VIX price can go higher. Can get to 50 quickly.

MFC 19.16 +1.97. Watch how this acts when financials pull back. Potential buy if it acts OK.
XLF 12.45 -.21. Can short down to 11.5 area.

SWC 5.94 +.09. Relative strength in this miner. Wait to buy.
TRAK 12.86 +.52. 52 week range 8.84 - 30.38. After hours announced will lighten staff by 8% including CFO. Fundamentally, selling software and services to auto dealers is a business that will see fewer sales and compressed margins. Look to short this if it goes higher.
PPD 37.01 -.15. Can easily retrace to 35.

US long-dated bond:
TLT 113.35 -3. Over the weekend, Barron's had an article calling for a top in these long-dated US government bonds. Fundamentally it is difficult to understand how they could go much higher.
TBT 41.52 +2.52. Last few days this has moved. Expect it to retrace the gains over this month.



Put this on the reminder calendar for next year!
Beware, commodity index rebalancing ahead
Posted by Izabella Kaminska on Jan 05 15:34.

The major commodity indices rebalance their respective asset weightings once a year (or occasionally more) — and with that comes a mass dose of buying and selling. The 2009 rebalancing is expected to start sometime this week.

Luckily, JP Morgan has produced its best guess of how the 2009 reweightings of the DJ AIGCI and the S&P GSCI indices will impact the market.

The weightings for both indices are released ahead of time, but begin to kick in the first few working days of the new year.
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