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Weekly Writeup

The Final ETF Risk Alert Update

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It’s been my pleasure to offer generalized investing guidance over the past year. What’s more, if you followed my suggestions throughout 2010, you earned exceptional returns with less stress than holding-n-hoping-n-praying. At this time, I will be concentrating solely on my actively managed accounts. Personalized money management advice is not only what I do best… it is more lucrative. (You can’t fault me for that… can you?!) Feel free to give me a buzz if you’d like me to actively make investing decisions on your behalf….

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A Cautionary Tale For 2011

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Volatility is low and stock market uptrends are intact. Specifically, the price on the CBOE Volatility Index (VIX) is below its 50-day moving average, while the prices on SPDR S&P 500 Trust (SPY) and Vanguard Emerging Markets (VWO) remain comfortably above their near-term trendlines. Nevertheless, I think it is important to provide subscribers with some words of cautious wisdom for 2011. Indeed, I am somewhat concerned about stock assets in the immediate-term. Did the recent rate hike by China give me pause to reflect, or…

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Finishing 2010 On A Strong Note

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Honestly, how can anyone be disappointed with the progress of their portfolio in 2010? If you’ve been following my guidance here at ETF Risk Alert, you sidestepped summertime trouble and you profited handsomely from both domestic trends as well as emerging market trends. I wouldn’t expect much in the way of fireworks between now and year-end. The next round of “worry” probably won’t surface until January, where profit-taking and “sell-the-strong-earnings-news” might be the name of the game. Of course, only time will tell. For now,…

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Minor Resistance… Major Gains

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Both the Nasdaq and the S&P 500 closed out the week at 2-year highs. In fact, the Nasdaq needs just 8% more to reach its previous bull market peak in 2007. (The S&P 500 still needs another 25% to get back to 1565 from 1243.) There’s little reason to make a big fuss over stock market resistance. Yet I would be remiss if I didn’t point out the S&P 500’s inability to break through an intra-day high of 1246 on 3 separate occasions…

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Investors More “Afraid” Of Missing A December Rally

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Economically cyclical stocks have handily outperformed over the last 3 months. Technology, energy and consumer discretionary stocks have been leading the charge, and they are likely to continue leading the charge through Q1 of 2011. Indeed, the mere fact that defensive equities like staples, utilities and health care have anchored the rear suggests that December’s rally may be legitimate. Absent the known trials and tribulations (e.g., European credit concerns, China inflation, Korean tensions, etc.), investors expect corporations to keep earning and consumers to keep spending; others strongly believe…

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Santa Arrives In The First Week of December

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The S&P 500 had shed -4% in just 3 weeks. By November 30, the benchmark had dropped from 1225 to 1175. Short-sellers were celebrating the commotion caused by European debt contagion. Others were pounding the table over inflation in China. And bears were literally clawing at the walls in their caves over the North Korea-South Korea flare-up as well as the lame-duck Congressional stand-off. Ultimately, the doom-n-gloomers proved premature in their calculations. Beginning mid-day Novmeber 30, S&P 500 stocks reclaimed all 50 points to finish near the 52-week…

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Key Indicators Flash Warning Signs

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It is not unusual for trading volume to decrease during a holiday-shortened week. Similarly, it is not uncommon for volatility to pick up in the absence of full participation. Nevertheless, the overwhelming majority of exchange-traded stock funds fell for a 3rd consecutive week. Many International ETFs and Emerging Market ETFs have dropped below short-term trendlines. With Euro-zone debt fears reamining, rather than fading… with China inflation concerns lingering, not dissipating… 3 of the 4 key risk gauges are now elevated. Specifically, Vanguard…

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Short-Lived Correction?

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As recently as last Friday, markets rested on the precipice of a trend change. Most of our indicators were straddling 50-day trendlines. The ticker now suggests that the corrective activity may have been short-lived. The S&P 500 remains well above a short-term, 50-day MA. Meanwhile, Vanguard Emerging Markets (VWO) bounced definitively higher off of its support. Similarly, the CBOE Volatility Index (VIX) briefly broke above its trendline, then turned lower. And, not only did markets pursue a course of relative…

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Risk Levels Move Modestly Higher

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Yeah… it was a pretty bad week. The S&P 500 gave back 26 points and roughly -2.2% in value. The MSCI Emerging Market Index posted a disturbing -4.1% over the same 5 trading days. What happened? The financial markets said good-bye to the mid-term elections as well as the Fed’s easy monetary policy via quantitative easing. In so doing, Wall Street decided to welcome back a variety of old fears. What are those old fears? First, a developed country in Europe may…

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Only Add New Money On Market Pullbacks

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The stock market received everything it could have wanted… and more. The mid-term election gave business-friendly Republicans the House, but not the Senate. President Obama has signaled that he’s willing to extend the Bush tax cuts in their entirety for 1 to 2 years. And the Fed is buying just enough treasury debt to keep treasury yields low, while not spooking the markets with an extreme purchasing program. These three outcomes worked in concert to produce one of the best weeks…

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