The reason for the market’s sudden surge? Over the past two weeks, U.S. companies across almost every industry issued better-than-expected earnings reports or forecasts for the rest of 2009. The ratio of positive surprises so far is impressive, with 111 companies beating expectations, 10 in-line and 21 misses.
And as you know, when U.S. markets jump, global markets tend to soar. Your bullish positions in your Global Bull Market Alert portfolio — the iShares MSCI BRIC Index ETF (BKF), the iPath DJ AIG Copper TR Sub-Idx ETN (JJC), the iShares MSCI Israel Cap Invest Mkt Index (EIS) and the iShares MSCI Hong Kong Index (EWH) all recorded gains that outpaced U.S. markets by a comfortable margin.
Your positions in the Claymore/AlphaShares China Real Estate ETF (TAO), iShares MSCI Chile Investable Market Index (ECH), and Shanda Interactive Entertainment Ltd. (SNDA) also ended the week higher.
Assuming that companies continue to beat earnings expectations this week, there may be legs in this market yet. That said, the market has moved very high, very fast. And when you see eleven-day, consecutive rises in the Nasdaq as you did through last Thursday, a correction is not a question of “if,” but “when.” So, although stock markets are trading up in Asia overnight, now is a good time to book (substantial) partial profits on your biggest Global Bull Market Alert gainers.
So, sell your September $12 call options in the iShares MSCI Hong Kong Index (EWH) to lock in a 244% gain. Also, sell half of your positions in the iShares MSCI BRIC Index ETF (BKF), the iPath DJ AIG Copper TR Sub-Idx ETN (JJC), iShares MSCI Chile Investable Market Index (ECH) and the iShares MSCI Hong Kong Index (EWH) to lock in gains of 41%, 36.3%, 34.2%, and 21.9%, respectively.
Also note that I have tightened your stops on many of your positions in the “portfolio update” section below.
Portfolio Update
The iShares MSCI BRIC Index ETF (BKF) jumped another 6.7% last week as the BRIC markets recovered across the board. Sell half of your position here to lock in a 41.6% gain. The rest of your position remains a HOLD. Raise your stop to $35.70.
The WisdomTree Dreyfus Emerging Currency ETF (CEW) jumped another 1.9% last week, as investors returned to emerging market currencies. This low volatile pick remains a BUY. Raise your stop to $20.30.
The iShares MSCI Chile Investable Market Index (ECH) rose slightly last week, as Chile uncharacteristically lagged its rival emerging markets. Sell half of your position to lock in a 34.2% gain. The rest of your position remains a HOLD. Raise your stop to $42.80.
The iShares MSCI Israel Cap Invest Mkt Index (EIS) jumped another 5.6% last week. EIS remains a BUY. Raise your stop to $39.50.
The iShares MSCI Hong Kong Index (EWH) jumped another 6% last week back to levels not seen since late August of 2008. With the market up another 1.8% overnight, it looks like Asia’s rally is continuing. Let’s not get too greedy here and sell your remaining options to lock in a 244% gain, and sell half of your position to lock in a 21.9% gain. HOLD your remaining position. Raise your stop to $12.95.
The CurrencyShares Japanese Yen Trust (FXY) fell back last week as markets continued to strengthen. This position moves inversely with the markets and remains a defensive BUY.
The iPath DJ AIG Copper TR Sub-Idx ETN (JJC) soared 4.6% — hitting the $35 level for the first time in 2009. Sell half of your position here to lock in gains of 36.3% and HOLD on to the rest of your position in “Dr. Copper.” Move your stop to $29.60.
Your Rydex Inverse Government Long Bond Strategy Inverse (RYJUX) ended the week slightly higher. Your bet against U.S. Treasuries remains a long term BUY.
Shanda Interactive Entertainment Ltd. (SNDA) soared over the $62.00 level last Wednesday on intra-day trading, before dropping back sharply. With this stock starting to underperform technically, I am moving this high-risk stock back to a HOLD. Raise your stop to $49.75.
Claymore/AlphaShares China Real Estate ETF (TAO) ended the week up 4% after hitting a record high of $18.77 for 2009 on Thursday. With Asian markets up overnight, this bet on the hottest sector in one of the world’s hottest markets remains a BUY. Raise your stop to $15.80.
Rydex Weakening Dollar 2x Strategy H (RYWBX) rose 2% as the U.S. dollar continued to weaken. RYWBX remains a defensive BUY.
P.S. The constantly changing market environment continues to present investors with some of the most challenging times in recent history. Not since the Industrial Revolution has the financial landscape seen such major shifts in how wealth is held today. The MoneyShow is the only forum where you’ll meet, hear from, and find out how to profit from leading experts. Join me at this year’s MoneyShow San Francisco, August 21-23, 2009, at the San Francisco Marriott, where I will address some of the most pressing issues facing us today and introduce you to the newest and most successful tools and strategies for managing your portfolios in these challenging times. I urge you to attend and I look forward to meeting you personally. Register FREE by calling 800/970-4355 (priority code 014319) or by going online at The MoneyShow San Francisco!
