Categories: Stock Market NewsThe Alpha Investor Letter Hotlines

Markets Pause for Breath as Three Positions Hit Yearly Highs

Global markets had a solid week, as a number of your positions hit highs for the year on Tuesday, including the iShares MSCI Taiwan Index (EWT), Freeport-McMoRan Copper & Gold, Inc. (FCX) and Market Vectors Russia ETF (RSX).

From a risk-management standpoint, our overall investment strategy remains the same. If a position has fallen below its 50-day moving average, I am moving it to (or keeping it at) a HOLD. If a position rises back through its 50-day moving average, then I have moved it back to a BUY.

At the same time, a number of your positions have fallen through the critical 50-day moving average level, including Market Vectors Brazil Small-Cap ETF (BRF), the Claymore/BNY Mellon Frontier Markets (FRN) and the Market Vectors Indonesia ETF (IDX). I’ve now moved these to a HOLD.

Las Vegas Sands (LVS), however, is back to a BUY, after bouncing sharply on good news from its Singapore operations.

Overall, I have turned cautious on your Global Stock Investor portfolio for the first time in several months. Some of your positions are starting to break down technically, and are showing a lack of buying support. Although odds still favor a strong January, current high levels of optimism in global financial markets often are followed by sharp sell-offs. Most technical indicators show that the S&P 500 is overbought in the short term, and is due for a pullback.

And when that pullback happens, you can expect the retreat to be even sharper in global markets.

For now, enjoy the ride… but as always, keep an eye on your stops.

In addition, I will be taking a holiday break to enjoy time with family and friends next week. I wish you happy holidays and a profitable New Year. Watch for my next hotline during the first week of 2011.

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Portfolio Update

Market Vectors Brazil Small-Cap ETF (BRF) dropped 1.37% this past week. Having pushed back below its 50-day moving average, this bet on Brazil’s domestic economy is back to a HOLD.

The WisdomTree Dreyfus Chinese Yuan Fund (CYB) dropped slightly this week. Standard Chartered Bank expects the yuan to appreciate about 6% next year. CYB is a HOLD.

iShares MSCI Malaysia Index (EWM) was flat this past week and has been hugging its 50-day moving average very closely. EWM remains a cautious BUY.

iShares MSCI Taiwan Index (EWT) rose 1.73% this past week, again hitting new highs for the year. Technology remains one of the hottest sectors around. That’s bullish for technology-heavy Taiwan. EWT remains a BUY.

iShares MSCI South Korea Index (EWY) rose slightly this past week, even as military tensions with North Korea failed to really ebb. EWY is a BUY.

Freeport-McMoRan Copper & Gold, Inc. (FCX) ended the week 2.06% higher, and is closing at yearly highs. A combined play on both copper and gold, FCX remains a BUY.

Claymore/BNY Mellon Frontier Markets (FRN) fell back slightly this week. Slipping below its 50-day moving average, FRN is back to a HOLD.

Market Vectors Indonesia ETF (IDX) ended the week 1.23% lower. Slicing back under its 50-day moving average, IDX is now back to a HOLD.

Las Vegas Sands Corp. (LVS) rose a solid 8.64% this past week. Singapore’s Resorts World Sentosa and Marina Bay Sands may post $2.8 billion in casino revenue this year and $5.5 billion in 2011, surpassing Las Vegas in only its second year. Bouncing back off of its 50-day moving average, LVS is back to a BUY.

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Market Vectors Russia ETF (RSX) rose 1.16% this past week. Russia always seems to come through in Q4. RSX is back to a BUY.

Universal Display Corp. (PANL) rose 2.55% during its first week in the portfolio. With Android phones like Samsung’s Galaxy outselling Apple’s iPhone, this bet on AMOLED (active matrix organic light-emitting diode) display technology remains a BUY.

Vale S.A. (VALE) fell slightly this past week. Still above its 50-day moving average, the world’s biggest iron ore producer is a BUY.

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Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.