With Friday's declines, major U.S. indices are close to giving
back all of their post-Federal Reserve gains that were accrued
Weakness in U.S. stocks after the Fed-induced, no tapering
surge is not surprising. History shows that equities often hit a
rough patch in the weeks immediately following a big Fed day and
Wednesday certainly qualifies as that.
No Post-Fed Party For Insurance ETFs
Possibly making the near-term forecast for stocks all the more
gloomy is October is right around the corner and the tenth month
of the year is mediocre at best for the bulls. It is actually the
worst month for the Russell 2000 and the fourth-worst month for
the Nasdaq Composite. With October near and enthusiasm for the no
tapering rally all but gone, traders may want to consider the
Direxion Daily Gold Miners Bear 3X Shares (NYSE:
) DUST has
been a champion for much of this year
as gold's bull market appears to be ending. Yes, the yellow metal
got some help from the Fed Wednesday, but in indication of just
how week the miners are, DUST is following up a strong showing
Thursday with a Friday gain of almost 19 percent at this
DUST's bullish outlook is confirmed by the fact that even when
it rallied last month, the Market Vectors Gold Miners (NYSE:
) was never able to
to crack critical resistance at $31
Direxion Daily Energy Bear 3X Shares (NYSE:
) Talk about a post-Fed dud: The U.S. Oil Fund (NYSE:
) is on pace to finish the week with a loss of about 1.5 percent.
Bolstering the case for the Direxion Daily Energy Bear 3X Shares
is the fact that September is usually a good time to short oil
stocks, but that has not been the case this month as the Energy
Select Sector SPDR (NYSE:
) was up 3.6 percent heading into Friday's trading session.
With Syria concerns all but extinct for the moment, a
disappointing no tapering performance and seasonal trends at
play, the energy sector is not a screaming buy at the moment.
Perhaps the Direxion Daily Energy Bear 3X Shares is for
ProShares UltraShort Financials (NYSE:
) SKF has an ugly chart, as do many leveraged bearish ETFs this
year, but this fund
has had some moments in the sun
There is risk with SKF because it is possible that large-cap
banks will respond positively to falling interest rates, if that
scenario occurs. However, there are reasons to believe SKF can go
higher in the near-term. The fund is the double-leveraged,
bearish answer to the iShares U.S. Financials ETF (NYSE:
IYF has a six percent weight to J.P. Morgan Chase (NYSE:
), a company that generates more bad news than good these days.
Additionally, IYF's exposure to regional banks and life insurance
providers, albeit slight, is not a favorable trait if 10-year
Treasury yields do decline in earnest.
For more on ETFs, click
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advice. All rights reserved.
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