A New Theme

Home builders, Semiconductors, Biotechnology, Water and Natural Gas… a strange assortment of market leaders for the day.
ITB is a home builders index and like its better known brother XHB, it has taken a beating over the last two years, down nearly 60%. After finding a low ~13.50 on January 9th, ITB has shown remarkable strength, and is trading ~20.
USD is ProShares double long semiconductor etf. It traded as high as 100 some time last year, but after a shocking drop into the mid 30’s in January, it is trading at 46.
Similar stories can be found in XBI (bio tech), and PIO (water).
UNG (natural gas) was the strongest commodity of the day, and has a very good looking chart.
Precious metals are struggling again, and the banks are in need of a catalyst for further downside.

Blah Blah Blah Blah… This market is so unexciting, I wish there was something newsworthy to scare the shit out of everybody.

Looks like one of the best places to put money in times of panic is in .foreign government debt. BWX is an assortment of inflation sensitive treasuries from countries like Germany, Japan etc. It is outperforming the domestic alternative TIP, and makes fundamental sense from a dollar bear perspective.
A lazy portfolio could assign weightings to EEB and BWX based on moving average relationships to further reduce volatility. If EEB and BWX were bought in equal proportions at EEB’s Halloween high, the pair would show a 12% decline today. Compared to EEB’s 30% fall, this certainly offers a great deal of downside protection. Unfortunately, there isn’t any trading information for BWX during EEB’s bull market phase, so the upside impairment cannot be quantified. A similar test of QQQQ and TIP shows a 15% decline, giving us 3% of out performance in favor of foreign exposure.
Plenty of statistical manipulation was done to maximize a desirable result, but the facts speak for themselves.