Saturday, February 21, 2009

ETF Rewind - Week 8 (02/20/09)

(Click Image to Enlarge/ Glossary)

Last week's performance looked just like the prior week's - albeit magnified - leaving the S&P500 (SPY) down -7.5% (note: 5-trading days). In fact, the Financials (XLF) lost a whopping -19.1% on nationalization fears (FT - Fears Rattle Markets; AP - White House Response). Only Precious Metals (DBP) and the Dollar (UUP) managed to post gains of +4.9% and +0.1%, respectively, on a global safety trade. The only other metric showing gains was the VIX (Implied Options Volatility), closing the week back near 50 and stretched +9.2% above its 15-day moving average.

In normal times, this would be a bullish indication, as would the majority of tracked securities showing near- and intermediate-term oversold price index readings (SPY RSI[2] = 1!). However, we are so overstretched to the downside -- this market is clearly broken. Some modicum of positive news flow will be required to turn this train wreck around going into the end of the month. Perhaps clarity on the banking situation will provide that; we'll just have to wait and see.

Week Nine of 2009 features the following reporting calendars, including Consumer Confidence, Housing Data, Durable Goods, and Preliminary GDP:

In addition to Geithner's "Stress Test" details on Monday (CNBC - No Lehman Weekends), market watchers will also be keeping an eye on developments overseas at HSBC (Independent - HSBC Considers Cash Call) and in Germany (BBC - $63B Stimulus Package). Meanwhile, many of our states continue to march towards effective bankruptcy (Bloomberg - Stimulus Fails to Fix States' Woes). Rest up this weekend!

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