All ETF Daily News Articles

Wells Fargo Reports $3B Net Income, XLF ETF UP 7.4% Pre Trading

wellsfargo NEW YORK (Reuters) - Wells Fargo & Co on Thursday reported preliminary first quarter earnings of $3 billion, or about 55 cents per common share after preferred dividends, a stronger-than-expected result that sent the bank's shares up 28 percent in premarket electronic trading.  The results also bolstered the overall sector, sending the Select Sector SPDR Financial ETF 7.4 percent higher in premarket trading.  The following is reaction from industry analysts and investors:  WILLIAM SMITH, PRESIDENT OF SMITH ASSET MANAGEMENT INC, IN NEW YORK:  "There are good guys and bad guys, and we're not talking about the bad players here. Not all banks are good, and this is going to start separating the good actors from the bad actors."  "Still it's positive and it should be good for the entire sector. The tide lifts all ships."  CLEVELAND RUECKERT, MARKET ANALYST, BIRINYI ASSOCIATES INC. STAMFORD.  "It's definitely been taken well by the market - it's a very positive number. I'm not sure what the details are going to be but I suspect a lot of the stronger-than-expected earnings has to do with change in the accounting rules that were passed recently.  "Wells Fargo serves as good catalyst to get things going and hopefully we can have a fairly positive day."  "I think so (this is mainly down to changes in mark-to-market rule). The market reacted very strongly to number that came across. I'm sure that number will be scrutinized through out the day to really figure out what's going on there, because we've seen pretty significant discrepancies for actual earnings versus analysts estimates throughout this whole credit crisis so there's obviously stuff going on there that the bank analysts weren't aware of. We'll have to see what the details are but on the surface it's very positive."  MICHAEL FARR, PRESIDENT, FARR, MILLER & WASHINGTON, IN WASHINGTON  "They have been growing and expanding share. And that's what we had been saying that Wells Fargo would do and some of the stronger banks would do. They are probably one of the best positioned to expand and benefit from the particularly low mortgage rate environment. It's a huge portion of their business. So they are seeing some gains.  "I don't think that this is an all-clear for Wells Fargo because they have a considerable portfolio of loans on their books that are somewhat concerning. They have got a huge portfolio of home equity loans.  "The loans on the books are not getting the attention they deserve. It's true for most of the financials right now.  "It's a very solid operator. But with that huge portfolio of home equity loans and still a lot of mortgage loans on the books and some subprime -- we still got housing prices that are declining in this country, and that makes all of those loans problematic.  "Any respite from the torture chamber is worth hearty celebration. That our time in the chamber is done remains unclear."  MATT MCCORMICK, PORTFOLIO MANAGER AND BANKING ANALYST ATBAHL & GAYNOR INVESTMENT COUNCEL, INC:  "The table is set to exceed on the upside for a lot of these guys considering expectations are so low, and certainly Wells Fargo blew the cover off the ball.  "In this terrible environment, to exceed on the upside is going to raise the bar pretty high. Wells Fargo is clearly a dominant bank, one of the best operators out there, you're going to really see the cream rise to the top."  "Instead of this stress test the government is doing, you're going to see a real stress test come out now. This is the real stress test -- how people handled this environment, which was the worst in modern market history for them."  "The government is not going to be the type of business partner you want going forward. If these guys now have the ability to exceed on the upside and get out of the TARP restrictions, stand on their own two feet, wasn't that the goal in the first place?"  NICK KALIVAS, EQUITY MARKET ANALYST, MF GLOBAL RESEARCH, CHICAGO  "It is a surprise. It confirms some expectations that the banks were doing better with their charge-offs. Some lower-rated assets are rallying and the relaxing of the mark-to-market rule is also helping. This public-private plan is helping with the marking up of assets. No one expects them to be this good. It's possibly a good indicator for the market."  (Reporting by Richard Leong, Ed Krudy, Paritosh Bansal and Jonathan Spicer) Source: reuters
NYSE:GLD April 9, 2009 9:03am

Ratio Backspread and the ETF Explained

stockeducationJocelynn Drake from posted a very easy to read explanation of Ratio Backspreads. This option strategy is used with stocks and ETF's when investors are pretty certain the market will move in a particular direction, but want to limit their risk. We found this to be a very easy read and well worth sharing.  Please see the teaser below, followed by a link to the entire story:
Welcome back to another in a series of articles that examines the thought process behind a variety of option strategies using stock and/or exchange-traded fund (ETF) options. This column will examine a potential ratio backspread, the pros and cons of putting on a ratio backspread, and the profit and loss potential of this position. So, let's jump into this interesting strategy. Ratio backspreads are relatively complex strategies employed by investors who expect a big move from the stock, are relatively sure of the direction, but still want to limit their risk. The strategy is structured to allow for sizeable profits if the investor's projections on timing and direction are correct. In fact, the trader could potentially book a small profit, if the directional prediction is incorrect, The call ratio backspread, executed if a trader is bullish on the underlying stock, index, or ETF, involves selling a number of calls at one strike and buying more calls at a higher strike price. Typically, a 1:2 or 2:3 ratio is employed, but the ratio is always 2:3 or less. The position entered is bullishly aligned because more higher-strike (out-of-the-money) calls are purchased than lower-strike (generally in-the-money) calls are sold. The cost of the long calls is modestly offset by the sold call, which helps alleviate the cost burden and helps compensate for the impact of time decay. Meanwhile, a put ratio backspread is the exact inverse. In this bearish strategy, the options trader would buy a number of puts at one strike (usually in the money) and then sell a smaller number of puts at a lower, out-of-the-money strike. In both call and put backspread situations, all of the options involved should have the same expiration date. If a ratio backspread is structured properly, proceeds from the options sold will match or exceed the price of the purchased options and create a hedge. This hedge allows a trader to book a small profit or break even if the trade moves against him. The trade-off is that the upside breakeven point is higher compared to the outright purchase of a call that is naked. Full Story:
ETF BASIC NEWS April 8, 2009 4:40pm

Large Bullish XLF ETF Purchase; Investor Bet’s on a Financial Rally

spdr CHICAGO, April 7 (Reuters) - The Financial Select Sector SPDR exchange-traded fund XLF.P appears to have attracted a huge bullish stock and option combination trade during the last few minutes of Tuesday's session, according to one trader.  The trade involved the purchase of 100,000 May $8 XLF puts and the purchase of XLF stock at almost the same time, in what professional traders call a synthetic call option, said Jon Najarian, a founder of Web information site  In the last few minutes of trade, two huge blocks of May $8 XLF put options of 50,000 contracts were each bought for a premium of 43 cents a contract on the Chicago Board Options Exchange as the ETF shares fell, he said.  The XLF dropped 3.18 percent to $9.13. The put trade represented 10 million shares of stock. The exact number of shares bought in the ETF was not available. The fund's shares would have to rise to $9.58 by May expiration in order to break even on the trade. The strategy enables the investor to take a substantial bullish position in the XLF and could be same as buying a May $8 XLF call option, which gives the right to buy the fund's shares at $8 apiece. "This trader is expecting a resumption of the recent rally in the financial sector," Najarian said. An equity call option conveys the right to buy the company's shares at a fixed price within a specified time period while a put option gives the right to sell the security's shares at a given price and time. (Reporting by Doris Frankel; Editing by Diane Craft) Source:
NYSE:GLD April 8, 2009 9:13am

Understanding Triple Leveraged ETFs

3xMuch has been written about the math behind leveraged ETFs and mutual funds, yet most investors fail to realize the true impact. As a result, many of these products have been ridiculed for failing to meet user expectations. Contrary to popular belief, leveraged and inverse products that reset their exposure level every day are not new. Rydex introduced the concept with the launch of Rydex Nova (RYNVX) in 1993 and Rydex Ursa (RYURX) in 1994 (note: Ursa has since been renamed Rydex Inverse S&P 500 Strategy). However, as more and more leverage is applied in these products, the adverse impacts appear to grow exponentially. Direxion introduced 3x ETFs in late 2008, and now we have five months of data to look at. For this example, I have chosen two inversely related leveraged funds: Direxion Financial Bull 3x Shares (FAS) and Direxion Financial Bear 3x Shares (FAZ). The chart below illustrates the returns for the five-month period from 11/6/2008 through 4/6/2009 for the following four scenarios:
  1. Green Line: Buy and hold FAS = -86.3%
  2. Red Line: Buy and hold FAZ = -76.9%
  3. Yellow Line: Buy and hold equal amounts of FAS and FAZ with no rebalancing (what some might consider a perfect hedge) = -81.6%
  4. Cyan Line: Buy equal amounts of FAS and FAZ and rebalance every day (a lot of work) = -25.0% (not counting transaction fees and slippage)
click to enlarge
Chart and data by
Even if you go to the trouble of rebalancing every single day the market is open, you are still fighting a headwind of 25% for a five-month period. Most people would consider that impossible to overcome on any kind of continuing basis. I’ve said it before and I’ll say it again: Leveraged ETFs can be great short-term trading instruments, but make sure you understand the longer-term impact before holding any of them for more than a few days. All the ETF sponsors of leveraged and inverse products provide warnings and educational material. Here are links to such information for DirexionShares, ProShares, and RydexShares. Source:  Ron Rowland
NYSE:FAS April 8, 2009 7:58am

401kDIRECT and Mid Atlantic Trust launch new ETF program

401k401kDIRECT, a provider of retirement plan administrative services, has partnered with Mid Atlantic Trust Company to launch a new program that gives advisors and plan sponsors access to exchange traded funds. The ETFs will be available for 401k, 457 and 403b plans on the 401kDIRECT platform by means of the Mid Atlantic ETFxChange Program. The exchange traded fund (ETF) program offered through 401kDIRECT and Mid Atlantic Trust Company is expected to eliminate many of the administrative challenges that ETFs once brought to daily recordkeepers, creating a cost effective ETF program for daily valued retirement plans. Mid Atlantic Trust Company is an independent provider of trust and custody solutions for retirement plans. The program aims towards providing low fixed trading costs, ability to trade like mutual funds, providing virtually unlimited daily trading and ability to be offered alone or with traditional mutual funds. David Wade, president of 401kDIRECT, said: "We are excited to bring this program to our clients. Our Advisors and TPAs will now be able to take advantage of the benefits of ETFs and construct diverse investment portfolios using ETFs, Mutual Funds, CIFs or any combination of these investment vehicles. They will be able to build a portfolio that best meets the needs of their clients, and most importantly, will be able to do so in a low fixed cost environment." Source:
NYSE:GLD April 7, 2009 9:43pm

SEC Meets Wednesday to Discuss the Uptick Rule

As you may know Jon Najarian has been calling for a restoration of the uptick rule. Well, an important supporter may have just joined his ranks.

In his Congressional testimony Federal Reserve Chairman Ben Bernanke suggested had the uptick rule been in effect it might have had some benefit in preventing the current financial crisis.

As you might know, the uptick rule, which only allowed short sales when the last sale price was higher than the previous price, was repealed by the SEC in 2007 because the agency found that changes in trading strategies rendered it ineffective.

According to Investopedia, “By entering a short sale order with a price above the current bid, a short seller ensures that his or her order is filled on an uptick.”

And over the week-end the New York Times reported that new SEC Chief Mary Schaprio is considering reviving the uptick rule.

The Fast Money traders have mixed thoughts on the move, but overall they don’t think it will do much. Following are their comments.

“I think the uptick rule is just another way to legislate shiny happy people,” bristles Jeff Macke.

“Considering we trade on decimals now I think the uptick rule is a waste of time,” adds Karen Finerman.

“Oh come on,” counters Zach Karabell. “You have to have some regulatory framework or you'd have everyone in a mosh pit of trading and there would be no order to any of it.”

"If you make the margins a nickle or a dime wide, the uptick rules makes sense," adds Dylan Ratigan. "Without that it makes no sense."


ETF BASIC NEWS April 7, 2009 4:26pm

Index Funds, Where Are We Now? (SPY, AFK, EFA)

portfolioStaying on top of up to the minute news like President Obama’s trip to the G-20 conference or Madonna’s pending adoption of a child from Malawi can distract investors from taking a breather to look back in time in order to get a better direction of where their investments may be headed in the future. Let’s take a look at how a couple of major indexes and index funds have performed since the beginning of the year to determine if your portfolio has the right balance of risk and return.



Year to Date

U.S. Dollar PowerShares DB US Dollar Index Bullish (NYSE:UUP)


U.S. Equity SPDRS S&P 500 Index (NYSE:SPY)


Technology PowerShares QQQ (Nasdaq:QQQQ)


Europe, Australia-Asia iShares MSCI EAFE Index (NYSE:EFA)


Energy United States Oil (NYSE:USO)


Precious Metals iShares Comex Gold Trust (NYSE:IAU)


Fixed Income iShares Barclays 7-10 Year Treasury (NYSE:IEF)


Frontier Markets Market Vectors Africa ETF (NYSE:AFK)


As of market close, April 6, 2009.
When will the correction begin? Everyone wants to know when the economic situation will improve, but the truth is no one knows for certain. The U.S. is ending its first full quarter with President Obama and his administration in office. The call to repair the ailing U.S. economy has been met with the passage of a stimulus package. Time and the ability of businesses to serve existing and push forward into new markets will help drive the eventual economic recovery.  The S&P 500 index, as tracked by the SPDRS S&P 500 Index (NYSE:SPY) fund, has continued to fall downward over the last year; however, this fund did start to rise in recent months as investors moved in to take advantage of low indexes in early March when the Dow Jones Industrial Average fell below 7,000 and the S&P500 went below 700. (For a complete guide, check out our Index Investing Tutorial.) Pullbacks and Producers Gold futures prices, followed by the iShares Comex Gold Trust (NYSE:IAU) fund, have continued to trade just under $900/oz. IAU hit as high as $91.44 on April 1, and since then has dropped about 6% to close April 6 at $85.37. The U.S. dollar index, followed by the PowerShares DB US Dollar Index Bullish (NYSE:UUP) fund, was also up for the year nearly 4% until April, but has seen a slight drop in the last three trading sessions. Investors have sought out these two investments as protectors against the uncertainty in the markets.  Technology has jumped since the beginning of the year as top PowerShares QQQQ (Nasdaq:QQQQ) fund holdings like Apple (Nasdaq:AAPL), Qualcomm (Nasdaq:QCOM) and Google (Nasdaq:GOOG) all continued to trade in positive territory through April 6. Frontier Markets It’s interesting to note the performance of Frontier markets covered by funds like Market Vectors Africa ETF (NYSE:AFK) in comparison to traditional international investments covered by the iShares MSCI EAFE Index (NYSE:EFA) fund. Frontier markets include areas like South Africa, Nigeria and Morocco. Government corruption, hyperinflation and human rights abuses are a part of the story for the emerging economies of the African continent, but it is not the entire picture. Investors with a high-risk tolerance and an extended time horizon may consider doing more research in this region. Final Thoughts The point of this index fund exercise is a reminder to investors to constantly focus on maintaining a diversified portfolio of investments. In addition, investors should also adopt an investment process for rebalancing their holdings by selling a percentage of winning investments and reinvesting those earnings in whatever you deem important or back into the other investments in your portfolio lagging others. (Find out whether these funds can really deliver low-risk returns, read Enhanced Index Funds - Shiny Paper Or Sparkling Gift?) Source:  By Gregory S. Davis
ETF BASIC NEWS April 7, 2009 3:19pm

Soros “Very Concerned” About Rising Global Unrest, But Sees Positive Signs In Russia

george-sorosThere are always tensions somewhere in the world but the global economic crisis has billionaire financier George Soros "very concerned" about the potential for rising social unrest. "You have a collapse of the financial system that impinges on the life of ordinary people in a very big way," Soros says. "There's terrible human suffering and a lack of understanding why and where it comes from. It creates anger. People want to hit out." Signs of this anger and potential unrest were evident at the G20 meeting last week, as well as current protests against Ukraine's ruling party and attacks against the Gypsy population in Soros' native Hungary. Then there's Pakistan's internal battle against radical Islam, which Soros calls "probably the most dangerous situation" in the world. Pakistan needs "substantial financial assistance because American aide has done nothing for the people," says the author and philanthropist. Furthermore, President Obama needs to use the "utmost discretion" in approving military action against terrorists inside Pakistan because of the risk of civilian casualties, he adds. "Very often an economic crisis reinforces internal political divisions," Soros says. "It could lead to governments losing control." In his most recent book, The Crash of 2008 and What It Means, Soros warned the economic crisis could make Russia's Vladimir Putin "more repressive at home and more aggressive abroad." "But I'm pleased to observe, as of now, that hasn't happened," he said in our extensive interview this week. "In fact, more critical voices in Russia than before so far haven't been silenced by force. Maybe there is a chance of attitudes a change of maybe even a change in government slowly developing. " The outcome of the ongoing (second) trial of former Russian oil tycoon Mikhail Khodorkovsky - who was sentenced to prison in 2005 on charges of tax evasion and fraud - will be an "important test" for Russia, Soros says. The charges against Khodorkovsky are widely viewed as being politically motivated and designed to help Putin consolidate his grip on Russia's natural resources. "If he were found not guilty [that] would be very important sign there is change in the wind," Soros says. Source:  Aaron Task
ETF BASIC NEWS April 7, 2009 2:43pm

Could The VIX Be More Than A Volatilty Indicator?

vixVolatility has been measured for the past 20 years by the VIX, and it goes up when stocks and exchange traded funds (ETFs) drop and vice versa. So the million dollar question is why does the VIX move in the opposite direction of the markets?  The answer is options. Generally, when the market tumbles, speculators, hedgers and investors buy options for several different reasons.  As more buyers come into the market, there is upward pressure on option prices, states Mark Wolfinger of Minyanville.  The VIX generally increases during these times. The opposite is also true.  When the markets are rallying and gaining ground, there is no urgency to hedge and panic is absent, therefore bringing the trading volume in calls down.  This doesn’t mean that no one is buying calls, some are, but most are selling options, sending the VIX down. These are general rules and lately we have seen from divergence from the norm.  There have been bullish periods were the VIX increased and bearish periods were the VIX decreased.  As for right now, the VIX is around 43, which means that there is a 68% chance that the realized market volatility will be less than 43 and a 32% chance it will be higher than 43 30 days from now. The aforementioned is exactly what the VIX is supposed to represent: An estimate of future volatility in the options market.  Only time will tell if it more than just a measure of volatility and is a measure of fear in investors, as well. Kevin Grewal contributed to this article. Source:
ETF BASIC NEWS April 7, 2009 8:34am

Gold Rises For First Time in Four Days

gold2April 7 (Bloomberg) -- Gold rose for the first time in four days in London after a drop to the lowest price in 10 weeks lured buyers, and as a decline in equities increased the metal’s appeal as an alternative investment. Silver also gained. Bullion slipped 6.3 percent the past three days on speculation government efforts would revive the global economy, curbing demand for gold as a haven. The MSCI World Index of shares fell a second day as the euro-region economy contracted more than estimated. “We fell too much yesterday,” and some investors and physical buyers may be taking advantage of lower prices, Bernard Sin, head of currency and metals trading at Swiss refiner MKS Finance SA, said by telephone from Geneva. “We fell as much as 3 percent yesterday and a lot of people were hurt.” Gold for immediate delivery gained as much as $11.50, or 1.3 percent, to $880.40 an ounce, and traded at $879.75 by 10:47 a.m. in London. June futures added 0.9 percent to $881 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division. The metal rose to $879.25 in the morning “fixing” in London, used by some mining companies to sell production, from $870.25 at yesterday’s afternoon fixing. Bullion, trading 15 percent below the record $1,032.70 set in March 2008, has fallen 4.6 percent the past month while the MSCI Index has climbed 22 percent. Europe’s recession deepened more than estimated in the fourth quarter, the European Union’s statistics office said today. Gross domestic product in the euro region declined 1.6 percent from the previous three months, the most in at least 13 years. A worsening economy has pushed exchange-traded fund holdings to records this year. Inflation Concern Investment in the SPDR Gold Trust, the biggest ETF backed by bullion, was unchanged at 1,127.37 metric tons yesterday, after declining on April 3 for the first time since March 23. Bullion may climb back above $900 an ounce shortly should prices hold around $880, according to Pradeep Unni, an analyst at Richcomm Global Services DMCC in Dubai. Gains above $900 would be “supported by the inflationary concerns due to the large bailout funds that have been pumped into various economies across the world,” he said in a report today. “This, in addition to investment demand, could prevent gold from an aggressive selloff.” Among other metals for immediate delivery in London, silver rose 1 percent to $12.2563 an ounce. Platinum climbed 1.3 percent to $1,160 an ounce, and palladium was unchanged at $223.50 an ounce. Source: Author: Nicholas Larkin
NYSE:GLD April 7, 2009 8:14am

Gold up in Japanese Markets Tuesday

gold1 TOKYO (Reuters) - Gold prices edged up above $870 per ounce on Tuesday as technical charts suggested a sell-off, partly driven by a quick shift of investor money from the precious metal to riskier assets such as stocks, had been overdone.  FUNDAMENTALS  * Gold was at $871.40 an ounce at 0007 GMT, up 0.3 percent from New York's notional close of $868.80. Gold touched a low of $864.30 on Monday, the lowest since Jan. 23, as some investors unwound safe-haven positions, others sold as the dollar strengthened and some also unloaded gold along with other commodities including oil and base metals.  * The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,127.37 tonnes as of April 6, unchanged from April 3 and just below a record 1,127.44 tonnes. Source: Reuters
ETF BASIC NEWS April 6, 2009 10:06pm

How ETFs Have Dodged The Bullet And Prospered

etf-news1Despite the market crash and credit crisis of 2008, exchange traded funds (ETFs) have seen prosperity and made unconventional headway. The prosperity of the ETF industry has come at the expense of mutual funds. In 2008, there were 160 new ETFs launched as compared to a measly 21 new mutual funds.  Additionally, net inflow into U.S. equity ETFs were a positive $120.8 billion versus $162.4 billion net outflow for U.S. equity mutual funds. In March, the National Stock Exchange reports that more than $8 billion in net inflows went into ETFs. This reverses February’s anomaly, which saw $5.8 billion in net outflows, reports Murray Coleman for Index Universe. Additionally, there were 752 ETFs with $484.6 billion in assets by month’s end. ETNs also gained $4.6 billion in assets. Additionally, Joshua Lipton of Forbes reports the following numbers, statistics and facts on ETFs:
  • There are 737 ETFs that are offered to investors and range from everything as going short on gold to taking long positions on Malaysia
  • Over the past three years, ETF assets have skyrocketed 77%, while non ETF mutual fund assets climbed a mere 9%
  • ETFs account for 40% of all index fund market share, and this number is expected to increase in the near future
  • Most mutual fund providers are offering a vast array of ETF products.  Vanguard offers 39 different ETFs and holds $45 billion in ETF assets and Fidelity just recently broke into the ETF world
  • 2008 was the year the actively managed ETF was launched, building an empire of 13 actively managed ETFs and $240 million in assets
So why have ETFs become so popular?  The answer is fairly simple, investors and money managers have educated themselves on their benefits, which include tax efficiency, transparency, low costs, intraday trading, diversification and exposure to just about any sector or market. Additionally, the rise of ETFs will help accelerate the purging of assets from the mutual fund universe. In a market turnaround, look for ETFs to get more than their fair share of the assets. Kevin Grewal contributed to this article. Source: Tom Lydon
ETF BASIC NEWS April 6, 2009 8:18pm

Market Not Feeling Supportive

smileGreetings from the last day of my 30s, where, yes, everything is about me and my birthday. Nothing like a 4-handle birthday to make a guy more self absorbed than the Brawny Paper Towel man. It’s not for me to say whether that marks any sort of change from my normal view of the world. Here’s what I’m watching, when not mulling the idea of being half-way to 80:
  • With all due respect -- and remember, I said with all due respect -- Mike Mayo didn’t have a whole heck of a lot to do with today’s sell-off in banks. We’ve had a one-month equity feeding frenzy which started in banks and topped with a 350-point gap into Obama Mania last week. This was a pullback waiting for an excuse. If you’ve been playing the banks of fundamentals for the last year, with endlessly changing rules and still opaque balance sheets, you’ve been walking blind without a cane, sport.
  • So, having come into today with what felt like “way too much cash” as a percentage of my portfolio, today I’ve purchased: Apple (AAPL), Wells Fargo (WFC) and as an homage to the hair-bands of my youth, my favorite exotic dancer of an equity, the SDS 2x S&P500 Inverse ETF (SDS). Lower, higher and lower, for those who like to keep track of wins and loses at home. 
  •  So, Sun (JAVA) thought it had negotiating power with IBM (IBM), eh? Sun was trading $250 in 2000, back when it was SUNW. One wonders if JAVA shares board members with Take Two (TTWO), which has never been heard from again since turning down Electronic Arts (ERTS) mid-20s bid.
  • The Apple buy was a rebuilding move in the position. As mentioned many times previously, my prevailing strategy has been “selling rips and buying dips.” This is day one of the first dip we’ve had in a month.
  • Goldman Sachs (GS), another sold-down-to-the-bone long, is pummeling me today and nearing an uptrend line. As is the case with the whole market, where 25% gains in one month don’t really offer much in the way of “support,” Goldman moving 50% since March 9 doesn’t give a lot of footholds as we go lower. If and when the Company that Rules the Earth gets to $110, I’ll start rebuilding in earnest with a stop very near below that level (105-99). Tight stops and discipline; it’s my personal survival plan, and I’ve changed it not a bit in months.
  • Speaking of which, I was ruing having any Mosaic (MOS) on my books at all this morning. Frankly, it’s not trading too poorly and, at the size I’m playing it (recall we took a short-lived ag addition off the table by selling Potash (POT) entirely last week), I’d rather add to the name at $42 - $40.
  • Until midnight, I’m considering myself to be in my mid-30s. When full-bore middle age crazy hits in 11-odd hours, I’ll slightly modify my stance and buy a flesh-colored Maybach with light green racing stripes. And a motorcycle. I’ll also start wearing a toupee and taking more HgH than Sly Stallone. Beyond that, hey, age is just a number.
Source:  Jeff Macke
ETF BASIC NEWS April 6, 2009 2:53pm

ETF Securities Suggests A Sponsor Consordium

europeETF Securities is spearheading an idea to gather groups of financial institutions to sponsor ETF's collectively where as current ETFs are generally sponsored by one single institution. The danger of the current system is what may happen to the ETF should the financial institution fail. (That could never happen right?) See the below from reuters:
LONDON, April 6 (Reuters) - ETF Securities is launching a consortium of ETF issuers to boost liquidity and transparency in the market and help reduce risks, it said on Monday. ETF Securities said more than 15 global banks and financial institutions worldwide had shown "a strong desire" in joining the consortium. Previously all ETF issuers have been owned and run by single institutions.  "Under the current ETF issuance model, if the sponsoring/issuing financial institution fails, it is highly likely that their respective ETFs would be greatly disrupted and potentially liquidated," ETF Securities said in a press release.  "The current ETF issuance model by single financial institutions could be strengthened by diversifying index replication across a consortium of the strongest financial players and concentrating liquidity within a single platform." ETF Securities said members of the exchange would be able to participate in trading, market making, index replication, management fees and the equity value of the consortium and will be able to issue selected white label products. "From an investor's point of view we believe that there is a danger that every bank has an ETF Issuance business," said Hector McNeil, Managing Partner, at ETF Securities. "Currently there are over 10 different Eurostoxx50 ETFs. We don't need another 10. ETF Exchange will negate the need for banks to adopt this strategy." He said the consortium should be complete within the next few months. (Reporting by Rebekah Curtis; editing by James Jukwey)
ETF BASIC NEWS April 6, 2009 12:57pm

ETF Securities USA LLC Files For Platinum And Palladium-Backed ETFs

platinum2A unit of London's ETF Securities has filed with the Securities and Exchange Commission to register platinum and palladium trusts in the United States, according to a notice on the SEC's website. According to the website, ETF Securities USA LLC made an S-1 filing -- which companies use to register their securities with the SEC -- on behalf of the ETFS Platinum Trust and ETFS Palladium Trust on April 2. ETF Securities declined to comment. The company currently operates a range of exchange-traded commodities in Europe and Asia. If the filing results in a listing, the products will be the first platinum and palladium-backed ETFs in the United States. ETFs issue securities backed by physical stocks of commodities, and have formed a major component of demand for precious metals especially in recent months. Analysts say they fear strong ETF demand for platinum and palladium could cut supply for industrial users. "This is an audacious move by ETF Securities and one that could have a major impact on platinum and palladium prices, both in the near term (if investors anticipate approval of these products) and in the longer term if the ETFs squeeze physical metal availability," said UBS in a note on Monday. Source: reuters Click on the following link for the actual S-1 filing:
ETF BASIC NEWS April 6, 2009 11:31am

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