ETF DAILY NEWS TAKE:  Stocks gave up big gains a day after ETF Daily News posted The Bear ETF’S Are Getting Ready For “Sell In May And Go Away”!  The big winners today were the bears, but will the blood in the street continue to put the bulls away for the summer?

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After six strong weeks, stocks had a very difficult day. As we’ve said previously, a decent-sized pullback after such a big run-up seemed likely. How the market responds the next few days will be important in setting the near-term trend as we hit the busiest part of earnings season. There will be a lot of company data and projections to chew on over the next two weeks, but that will just be an appetizer to what the government has to say about its bank stress test on May 4th.

Stocks plunged to start the week. The Dow fell -290 points to 7,842, while the S&P dropped -37 points to 832. The Nasdaq, meanwhile, lost -65 points to 1,608. Oil nosedived -$4.45 to $45.88 a barrel, while gold climbed $19.60 to $887.50 an ounce.

The Leveraged ETFs was the top performing tickerspy Index on the day, led by Direxion Shares Etf Trust Financial Bear 3x (NYSE: FAZ – News) with a 31% gain.

Full Story:  http://finance.yahoo.com/news/Deals-Offer-Bright-Spots-But-indie-14977119.html?.v=1

NYSE:FAZ

One of the world’s biggest financial services firms has decided to throw its hat into the ETF marketplace. On Jan. 30, Charles Schwab & Co. (NASDAQ: SCHW) filed with the Securities and Exchange Commission for exemptive relief that would allow it to create ETFs.

The fund described in the filing would track the Dow Jones U.S. Total Stock Market Index, which according to the filing, covers all publicly traded U.S. stocks with readily available pricing information. The Schwab filing makes reference to other possible index-tracking ETFs, but only specifically names the one fund.

Full Story:  http://www.indexuniverse.com/component/content/article/7-news/5718.html?Itemid=19

ETF BASIC NEWS

Here is a list of the top-10 ETFs that experienced the largest percentage increase in value traded for the week ending April 17, 2009.

To create the list, I first screened for ETFs and ETNs that had an Average Daily Value Traded (ADVT) of at least $1 million for the past 21 market days.  This includes only those products in the upper ETF Liquidity Tiers and represents approximately 45% of the universe of US-listed ETFs and ETNs.  This step eliminates many of the peculiarities associated with low volume securities.

Next, I compared the ADVT of the past week to the 50-day average to determine which ones had the largest spike in the past week – an indication of potential increased interest from investors and traders.

Full Story:  http://investwithanedge.com/etfs-with-surge-in-traded-value

ETF BASIC NEWS

The London Stock Exchange today admitted seven new iShares ETFs, taking the total number of ETFs on the Exchange to 200. First launched in 2000, the ETF market in London has continued its strong expansion in spite of difficult recent market conditions, with 18 new admissions and £12.2 billion worth of trading so far this year.

 

Pietro Poletto, Head of ETF and ETC Markets at London Stock Exchange Group, said:

 

“It is testament to the attractiveness of the ETF model that at time when equity markets are perceived as being quiet, the ETF market has continued to expand, with very strong trading activity, and regular new product issuance.”

 

The issuers on the Exchange’s ETF market are: Deutsche Bank, ETF Securities, Invesco Powershares, iShares and Lyxor. Between them, they issue 78 ETFs based on developed market equity indices; 21 fixed income based ETFs; 41 ETFs tracking emerging markets indices; 53 ETFs covering a broad range of industrial sectors or specific asset classes such as property, private equity or commodities, and seven ‘style’ ETFs that focus on specific investment approaches such as small caps or companies with a record of strong dividend payments. In addition, there are now 123 Exchange Traded Commodities and one Exchange Traded Note

 

Full Story: http://www.transworldnews.com/NewsStory.aspx?id=84563&cat=1

ETF BASIC NEWS

Each day we hear about how consumers world-wide are tightening their belts and spending less. Even the rich have pulled back, not a surprise considering, according to the Economist, high-net-worth individuals have lost a quarter of their wealth. Consumer confidence, which we charted a few weeks back has improved but is still historically bleak.

Yet, provided that government doesn’t completely kill capitalism outright, this pullback in shopping won’t always be the case. For contrarian investors looking for a diversified way of playing the global consumer, a lesser-known ETF has collected many of the top names into one simple play.

SPDR S&P International Consumer Discretionary Sector ETF (IPD: 18.37, -0.78, -4.07%) holds, as you might imagine, brand-name companies whose products you probably come into contact with every day.

Approximately 20% of the fund is held in automotive stocks, and even though General Motors (GM: 1.69*, -0.17, -9.13%) and Chrysler might be going away, the car business certainly isn’t. Honda (HMC: 28.00*, -0.50, -1.75%) (4.15%) and Toyota (TM: 75.76*, -1.38, -1.78%) (10.03%) are large holdings, along with Germany’s Volkswagen Ag (VLKAY) (3.14%) and Daimler Ag (DAI: 31.74*, -2.92, -8.42%) (3.01%). These are companies likely to gain even more market share as U.S. manufacturers shrink. You might recall from an earlier column that even the president’s own Auto Task Force drives mostly foreign cars.

Full Story: http://www.smartmoney.com/Investing/ETFs/Yes-Virginia-the-Consumer-Really-Will-Shop-Again/

ETF BASIC NEWS

The US Oil Fund (USO) is down more than 7%  today to trade at $27.37. The drop mirrors the fall in the commodity itself, but while the actual futures remain within the recent range, the USO exchange traded fund is now down to its lowest levels since March 16. The futures are 45% off the February low, while the USO is only 20% higher than its low.

Full Story:  http://www.minyanville.com/articles/energy-USO-oil-fund/index/a/22270/from/yahoo

 

USO

Alcohol ads urge us to “drink responsibly.” Cigarette packs are emblazoned with the surgeon general’s warnings about cancer. And the firms that sell leveraged exchange-traded funds keep begging individual investors not to buy the things because they are meant only for short-term trading and can have erratic long-term returns.

Nonetheless, roughly 13,000 people are killed in alcohol-related crashes each year, over 33 million Americans smoke at least once a day — and more than $2 billion has poured into leveraged ETFs so far this year, much of it from financial advisers and retail investors who hang on too long.

ETFs are funds that trade during the day like stocks. A leveraged ETF seeks to use futures and other derivatives to multiply the daily return of a market index. Some, called “ultra,” “2X” or “3X bull,” attempt to double or triple the market’s return each day. Others try to double or triple the opposite of an index’s return; on a day when the market goes down, these “ultra-short,” “inverse 2X” or “3X bear” funds should go up two or three times as much.

So why bother with a boring index fund when you could double or triple your money by using a leveraged ETF? And why helplessly watch your stocks wither away when an inverse leveraged fund could let you mint money in a falling market?

There are 106 such funds with $46 billion in assets, much of it “hot money” that flies right back out. On Wednesday, trading volume for Direxion Financial Bear 3X totaled 23.1 million shares on only two million shares outstanding — implying an average holding period of less than 34 minutes.

Full Story:  http://online.wsj.com/article/SB123578237239398181.html?mod=rss_Money#articleTabs%3Darticle

ETF BASIC NEWS

Given that I’ve already spelled out my thinking on the sector, I’ll use a “bullets” format here, pulling in ideas from recent reports by Goldman Sachs (GS) and Stifel Nicolaus, as well as information from a very well-placed broker in the Washington area:

1. In prime office markets, closings for trophy properties are being done at 7.5-8.5 cap rates; anything other than “trophy” quality is above 9.0 caps. Against a backdrop of halcyon-era deals, which happened at nominal 3-4 caps (in reality cap rates were at zero since under normalized financing terms there would have been no cash flows), and leveraged 75% plus, this means that many properties have now lost approximately 50% of their value.

To wit, Normandy’s $660 million foreclosure of Brodway’s Hancock Tower in Boston took place at 50% of the original price, but only because Normandy chose to assume the very favorable loan on the property. In a regular auction sale, the property might have pulled in less than $500 million (Stifel Nicolaus).

2. “CRE fundamentals will continue to worsen for the next 12-18 months; cap rates will rise another 3 to 5 points, to the low teens; secured financing costs will rise to the 8-10% range; unsecured financing will command double digit rates.” (Goldman Sachs).

I agree completely, and it matches the assumptions surrounding many troubled projects we’re familiar with……..

……..10. At the risk of being redundantly redundant, the ProShares Ultrashort Real Estate (SRS) remain an excellent trading vehicle to short CRE, and just as bad an investment tool to achieve that purpose. I continue to trade the former, but I’ve now started a short position in the IYR, looking for it to bleed slowly for an extended period of time.

Full Story:  http://www.minyanville.com/articles/GS-SRS-IYR-goldman-Sachs-Boston/index/a/22256/p/1

SRS

Full Story:  http://www.marketwatch.com/news/story/financial-sector-lower-after-b/story.aspx?guid=%7B92EF25A0%2D232F%2D45A4%2DB544%2DD7A013AF0773%7D&siteid=yhoof

XLF

The exchange-traded fund (ETF) boom has been one of the fantastic bull-market trends of all time. Unfortunately, it’s been one of those trends that we as investors haven’t yet been able to cash in on, but have been able to directly participate in by learning the business and understanding the players.

I started using ETFs years ago and have slowly evolved to a separate managed account (SMA) model that utilizes them exclusively. But interestingly enough, you wouldn’t believe the number of people with whom I discuss my SMA strategy who have never heard of an ETF. If you happen to be one of the few who don’t yet understand just what an ETF is, in simple terms, it’s a tracking stock that owns a basket of underlying securities. It allows you to diversify your holdings in the same manner as a mutual fund, but without the restrictions of buying and selling at 4 p.m., as ETFs trade when the market is open.

I believe one of the greatest strengths you can have as a trader is to know all the major ETFs intimately. When you see a sector or market moving, it’s helpful to know exactly how to play it via ETFs, rather than searching this out when it’s time. Being prepared is always worth more than you can ever imagine.

Observing this growing industry has been fascinating, and like old media versus new, I suspect it will still be several years before the dying, mutual-fund world, understands the competition that ended up cleaning its clock. Yet with this incredible market and unbelievable opportunity, I’m still not sure if all the players in the game understand their very own business and roadmap to success.

Full Story:  http://news.moneycentral.msn.com/ticker/article.aspx?symbol=US:QQQQ&feed=MY&date=20090420&id=9800889

ETF BASIC NEWS

The 401(k) market is the last frontier for exchange traded funds (ETFs) to fully break into, and the latest market upheaval may lead to an easier road for these funds to break into this segment of the market.

Many individual investors are switching their retirement savings plans over to a pure ETF platform. Murray Coleman for Index Universe showcases one example, the owner of Lafayette Copier Sales & Service Inc. in Lafayette, Indiana. The owner had been using a 401(k) plan only offering mutual funds. But about a month ago, the plan’s service provider worked out a system that allows participants to create their own portfolios and freely transact using any iShares ETFs currently on the market.

The retirement markets need the flexibility of ETFs, since they trade at any time of the day, have total transparency and the ability to buy in fractional shares. These plans are still few and far between, however, the more employers that see how ETFs can be useful to 401(k) plans, the more will switch over.

Full Story:  http://www.etftrends.com/2009/04/why-case-for-etfs-in-401k-plans-just-got-stronger.html

ETF BASIC NEWS

The bears have been hibernating for the past 6 weeks, giving the bulls some glimmer of hope.  The legendary saying “Sell In May And Go Away” is fast approaching and the bears are getting ready for an INVERSE ETF party.

Some investors do not beleive the worst financial crisis in history would lead to a recession only lasting 18 months.  This would make this recession the shortest on record for a financial disaster this big!  See chart link here:  http://etfdailynews.com/blog/?p=701

What has changed in the last 6 weeks?  Unemployment is still near 10%?  Foreclosures are still on the rise?  Banks are still not lending? The commercial real estate market hasn’t popped yet, or has it just started to?  See Link: www.cnbc.com/id/30239789

Here are some inverse ETF’s that are sitting at recession lows.  These ETF’s will make large upward moves if the bears plan to reunite at their May reunion!

• FAZ-The investment seeks to replicate, net of expenses, 300% of the inverse daily performance of the Russell 1000 Financial Services Index.
• DXD-The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones Industrial Average index.
• QID-The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the NASDAQ-100 index.
• SRS-The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Real Estate index.

By: David Bettencourt  ETF Daily News

GET A FREE TREND ANALYSIS  FOR ANY ETF HERE!

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NYSE:DOG, NYSE:FAZ, SRS

Electric utilities are left vulnerable to computer-based attacks from foreign countries and hackers, a government-authorized regulatory group recently reports; will this leave related investments and exchange traded funds (ETFs) unprotected as well?

President Barack Obama has just unveiled a $4 billion plan to fund new power-transmission technology, reports Ian Talley for The Wall Street Journal.  Obama wants to spur the development of a new artificially intelligent “smart” grid that could increase the efficiency of the nations electrical infrastructure.

Full Story:  http://www.etftrends.com/2009/04/what-obamas-power-grid-plan-means-utility-etfs.html

ETF BASIC NEWS

ETF BASIC NEWS

FORT LEE, N.J., April 16, 2009 /PRNewswire via COMTEX/ — The National Inflation Association today released the following statement to its http://inflation.us members: “Today, hyperinflation is the last thing on most Americans’ minds because they can’t see it yet and they don’t know it’s coming.

Imagine taking a bottle and putting into it a bit of bacteria that you can only see under a microscope. Now let’s say this bacteria doubled in size every minute and after 55 minutes, you still don’t see any bacteria. But then, five minutes later or one hour since the bacteria started doubling, the entire bottle is full of bacteria.

Massive monetary inflation is already taking place today. Nobody can see it yet because temporary forces have pushed consumer good and commodity prices down, which has tricked economists into believing deflation is the real problem.

However, almost every action President Obama, Congress, and the Federal Reserve take every single day is sowing the seeds for hyperinflation. You need to invest today as if hyperinflation is already here, because once it arrives it will be too late.

People often ask us, how to invest in gold and how much gold is too much to have. There is no such thing as having too much gold. Although you should never put all your eggs in one basket, it is much better to have all of your money in gold than to have it all in U.S. dollars. The U.S. dollar will inevitably return to its true value, which is zero. Gold will always retain its value; unless huge new gold discoveries are made, which is very unlikely.

Many Americans are afraid to invest heavily into gold because of its volatility.

Today’s volatility in gold is nothing but noise that should be ignored. Many short-term traders buy gold for the wrong reasons. They buy it as a safe haven from stocks, and when stocks rally they sell their gold to buy stocks.

Full Story: http://www.cnbc.com/id/30252116/

ETF BASIC NEWS, NYSE:GLD