As of now, investors are more cautious than panicked. But with the markets up sharply and technically overbought since early March, the current scare may be an excuse for markets to take a breather.
This recent uncertainty notwithstanding, your Global Bull Market Alert portfolio had a solid week. Your two positions in emerging markets — the iShares MSCI Taiwan Index (EWT) and the iShares MSCI BRIC Index ETF (BKF) — rose sharply, and now are up 4.4% and 7.9%, respectively, since our initial recommendation.
Both the SPDR Gold Shares ETF (GLD) and the PowerShares DB Gold Double Long ETN (DGP) rose 5.3% and 11.44% last week, respectively, boosted by news that China has nearly doubled its gold reserves since 2003 to become the world’s fifth-largest holder of gold, behind Italy. Your other holding in metals, the iPath DJ AIG Copper TR Sub-Idx ETN (JJC), fell last week, but still is up 11% since my initial recommendation.
All of your other positions, with the exception of your short position in the CurrencyShares British Pound Sterling Trust (FXB), remain BUYS.
The iShares MSCI BRIC Index ETF (BKF) hit a high last week not seen since Oct. 3, as the big emerging markets continue to outperform their developed peers. BKF is a BUY.
The Market Vectors Double Short Euro ETN (DRR) dropped last week, despite continued signs that the eurozone is in worse shape than the United States. DRR is a BUY.
The iShares MSCI Chile Investable Market Index (ECH) was flat last week. With no sector accounting for more than a 15% weighting, and financials only accounting for roughly 10% of the index fund, this is one of the most emerging market ETFs around, and it remains a BUY.
The iShares MSCI Taiwan Index (EWT) got off to a solid start, jumping 4.4% this past week. Momentum in this ETF is supported by a combination of increased demand from a still fast-growing China and a heavy weighting in the relatively strong technology sector. It remains a BUY. Tighten your stop to $7.80.
The CurrencyShares British Pound Sterling Trust (FXB) ended the week flat, despite the announcement of a widely derided budget by U.K. Chancellor Alistair Darling this past week. Although the pressure on the British pound sterling remains all on the downside, I am keeping this short position in FXB at a HOLD.
Both the SPDR Gold Shares ETF (GLD) and the PowerShares DB Gold Double Long ETN (DGP) had big weeks, as gold breached the $914 level for the first time since March. Gold tends to perform well when nervousness in the market increases. With both of these positions sharply oversold, I am moving the recommendation on each of them back to a BUY.
Your position in the iShares iBoxx $ High Yield Corporate Bond (HYG) sold off slightly last week. Look for a dividend payment coming up next week. HYG remains a BUY. Tighten your stop to $65.50.
The iPath DJ AIG Copper TR Sub-Idx ETN (JJC) fell back under the $30 level last week. With JJC now as oversold as it has been in months, I am keeping it at a BUY.
Your Rydex Inverse Government Long Bond Strategy Inverse (RYJUX) jumped to $14.30, a level not seen since March 17. Your bet against U.S. Treasuries remains a BUY.
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