Call it whatever you wish (Oversold bounce, short covering rally, or market
bottom), but the rally in the financials and the sell-off in oil was quite
impressive. With a tropical storm stirring around in the Caribbean, traders made
take that as a opportunity to trade the oil markets higher for the week. If this
happens, the stock market will digest last weeks gains, and traders will take
some short term profits.
The storm every will be watching is TC Dolly which is expected to cross the
Yucatan Peninsula, and enter the Gulf of Mexico over the next 24-36 hours. It is
expected to gain strength, but steer clear of the U.S., and make landfall just
south of the Texas border.
This week, our favorite financial ETF's and Funds
had nice gains. In addition, our oil & gas short, the Ultra Dow 30 Proshares
ETF (DUG) gained 16.2% for the week.
To take advantage of a potential market rebound, we added the Ultra Dow30
ProShares (DDM) double bull fund which also gained +8.81% for the week.
Our financial picks gained nicely as well;
KBE: KBW Bank ETF- +26.1% for the week.
IYF: iShares Dow Jones US
Financial Sector- +15.32% for the week.
FSRBX: Banking- +21.27% for the week.
FSVLX: Home Finance- + 20.41% for
the week.
Please keep in mind that all our investments in the financials are longer
term (2-3 years) contrarian plays, so we will be very patient with these
investments.
Here are our Top 10 ETF's for the week of July 21st:
1) DBA: Powershares DB Agriculture Fund- .359
2) EWZ: Brazil Index-
.347
3) SLX: Market Vectors Steel Index Fund- .343
4) FXF: Currency Shares
Swiss Franc Trust- .330
5) EEB: Claymore ETF BNY BRIC- .289
6) DDM: Ultra
Dow 30 Proshares ETF- Not Rated
7) DUG: Ultrashort Oil & Gas Proshares-
Not Rated
8) PGJ: PS Golden Dragon China Fund- .148
9) KBE: KBW Bank ETF-
Not Rated
10) IYF: iShares Dow Jones US Financial Sector- Not Rated
Here are our Top 10 Fidelity Sector Funds for July 2008
1) FSCHX: Chemicals
2) FSMEX: Medical Equipment
3) FSCGX: Industrial
Equipment
4) FCYIX: Industrials
5) FSPTX: Technology Portfolio
6)
FSCSX: Computers & Software
7) FSCPX: Consumer Discretionary
8) FWRLX-
Wireless
9) FSRBX: Banking
10) FSVLX: Home Finance
NEW BUYS:
None
NEW SELLS:
None
Honorable Mention (Holds):
None
The Week in Review:
After dropping below 11,000 this week for the first time in two years, the
DJIA rallied 764.61 points from Tuesday's low to close at 11.496.57. While the
"final" low how may not have been reached for the overall market, it looks as if
a panic bottom may have been made in the financials.
The bad news is lows like to be retested.
