U.S. markets resumed their rally this week as the S&P 500 broke through the psychologically significant 1,000 level for the first time since November. The stock market’s latest winning streak has only added to an already impressive run since early March.
This is the environment in which your global equity picks are going to shine. Your latest pick, the Market Vectors Indonesia ETF (IDX), is on fire, soaring another 9.1% this week. It now is up 16% since we recommended it only three weeks ago. India’s ICICI Bank Ltd. (IBN) also rose 8.4% this past week, as it substantially beat earnings expectations and looks to resume its expansion. Your commodities play, Freeport-McMoRan Copper & Gold Inc. (FCX), soared 7.7% to hit a new high for 2009. And after sitting out much of the recent rally, the Market Vectors Gold Miners ETF (GDX) also joined the party, jumping 7.1%.
As I have said, the general market sentiment remains surprisingly robust as the cacophony of the economic Cassandras starts to wane. That said, by conventional technical measures, global markets are entering overbought territory. Such a strong move begs for a pullback, but, for now, the primary trend seems firmly on the upside. Also note that I have tightened the stops on a number of your positions below.
Portfolio Update
The WisdomTree Dreyfus Chinese Yuan Fund (CYB) was flat again this week. With China is relaxing restrictions and allowing the yuan to trade offshore with select neighboring, Asian countries, it has taken a first step to make the yuan a globally traded currency. CYB remains a defensive BUY.
iShares MSCI Taiwan Index Fund (EWT) pulled back slightly from last week’s record high of $11.43. Phone-maker HTC traded "limit down" two days in a row after posting disappointing third-quarter guidance, weighing on the overall market. The term "limit down" describes a situation when a security falls by a maximum allowable amount under the rules of an exchange. Nevertheless, with global economic recovery on the horizon, EWT remains a long-term BUY. Raise your stop to $9.40.
Freeport-McMoRan Copper & Gold Inc. (FCX) jumped 7.7% — slicing through the $63 level and hitting a new high for 2009. With the global economy bottoming, this bet on “Dr. Copper” remains a BUY.
ICICI Bank Ltd. (IBN) jumped 8.4% this week, as India’s #2 bank beat analysts’ forecasts with a 20.6% rise in net profit. Hitting 8.78 billion rupees ($182 million) in its fiscal first quarter ending in June, net profit substantially beat forecasts of 7.7 billion rupees. The volatile bet on India’s future is a long-term BUY. Raise your stop to $25.00.
Market Vectors Indonesia ETF (IDX) is red hot, soaring another 9.1% this week to a record high of $55.52, thereby confirming its position as one of the year’s hottest markets. The “new BRIC” remains a BUY. Raise your stop to $44.50.
Market Vectors Gold Miners ETF (GDX) jumped 7.1% last week. With the U.S. government committed to trillion dollar deficits as far as the eye can see, this hedge fund manager favorite remains a long-term BUY. Raise your stop to $32.50.
Chemical & Mining Co. of Chile Inc. (SQM) rose 2.7% this week as this stock struggles to break out of a narrow trading range. SQM remains a BUY.
UltraShort 20+ Year Treasury ProShares (TBT) fell sharply last week before bouncing back above the $50 level. Although the fundamentals supporting this position are still in place, this position is breaking down from a technical standpoint. I am temporarily moving TBT to a HOLD.
P.S. For the first time ever, I’ve scheduled a special private meeting for my subscribers of Global Stock Investor and Global Bull Market Alert on Friday, Aug. 21, at this year’s MoneyShow in San Francisco. Think of this as a quick boot camp where I’ll reveal special techniques and "tricks of the trade" that I use in the markets. This is the kind of hands on training that I can only offer you in person. I’ll discuss my secret technique for choosing customized exit prices, an easy-to-implement formula on how much to buy of each pick to maximize your returns, and why I think the biggest returns for 2009 are still to come. I also will make myself available to answer any specific questions that you may have about any of my current recommendations. Please join me at the San Francisco Money Show, Pacific room C (4th floor), on Friday, Aug. 21, from 1:30 p.m. – 2:30 p.m. by sending an RSVP.
