Smoking Securities

Half Baked High Finance

Portfolio Theory $DBC $EEM $IWN $IYR $PLW

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A weekly look at the five most liquid but least correlated ETF’s (excluding inverse’s).
Last week’s call made here is playing out rather well. DBC is in a great rally from it’s lows, and has a volume pattern that often appears during bottoms.
EEM has bounced nicely, and looks poised to breakout. Expect bulls to come late to the party if it makes a new high.
IWN has finally broken it’s downtrend, and has violated the upper Bollinger on increasing volume. Longs are sure to be interested next week.
IYR closed higher this week, but it continues to languish relative to other sectors. There are good fundamental reasons for this under performance, so there is little incentive to buy.
PLW got absolutely hammered this week, and you should probably buy TBT.

The weakness in Treasuries and strong bounce in oil suggests a major shift in market sentiment. If commodities can sustain a rally amidst increasing bond yields, the emerging market economies will be the greatest beneficiaries. As always, trade what you see and not what you think.

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Written by chucklesamadeus

January 4, 2009 at 12:15 am

Posted in DBC, EEM, IWN, IYR, PLW, Portfolio Theory

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