Smoking Securities

Half Baked High Finance

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

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Here is the weekly rundown of the 5 least correlated liquid ETFs.
DBC is showing some signs of life on minuscule volume. Intuitively, I’m bullish commodities, but since they remain in a technical downtrend, I remain cautious.
Emerging markets are bouncing within a newly formed downtrend. EEM looks capable of rallying from this point, and may be forming the right shoulder of a HS pattern.
The small cap value sector is showing a light volume bounce, but remains in a downtrend. Short term optimism for IWN isn’t unwarranted, but stay cautious.
IYR still looks like an unmitigated disaster, but it is putting in some upside work. Real estate remains incredibly volatile, so a run up to the upper Bollinger may be in the works.
Treasuries have started to show some convincing weakness, a new low would be a boon for equities. Though PLW is in an uptrend, I’m preparing to buy TBT.

Equity markets are incredibly weak, but the potential for a rally abounds. Although few stocks are in bullish formations and volatility remains high, a bounce through inauguration is not out of the question. This remains a day trading environment as weakness in the financial sector can turn a 3% rally into a 4% dip.
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Written by chucklesamadeus

January 18, 2009 at 5:44 pm

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

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