Portfolio Theory $DBC $EEM $IWN $IYR $PLW
Momentum in emerging market’s waning, and the bounce in EEM is beginning to look like a dead cat. Perhaps the fiasco at Satyam is just a glimpse of the Madoffness abroad.
The small cap value sector suffered a failed breakout and has pulled into support. Although the IWN technically remains in an uptrend, nearly 40% of this ETF is allocated to financial service, so it’s fragile and may be a short.
The markets propensity to fluctuate, neatly described by the VIX, is beginning to rise and that poses a significant danger to nervous investors. Moreover, the selling on Friday was strong ~9:30 and ~4, suggestive of a broad desire to GTFO. If you’re looking for a tip, take your money, put it in a MMA, go play with the kids, and come back next week.
That said, how about a gap up on Monday to make some bears shit, and then a fade to lows below Friday to demoralize the rest? Volatility is rising and the market will spoon feed excrement to those who fail to adapt. We are entering the fifth wave, assume the position.