Ratio Roundup

My indicator was down today, but not broken. One sector is in critical danger.

The financial sector made a new O today, indicating an increasingly volatile and bearish environment.

The buywrite/index ratio is rising (bearish), but it approaching a falling 10sma (bullish).

This breakout in the HUI/GOLD is bullish for gold stocks, so I'm buying the dip.

Long/short commodities vs long commodities looks attractive here, but keep a short leash.

Risk appetite has yet to return as treasuries still outperform junk.

Banks look ready to fall again. Tomorrow will be crazy, and though we may see a rally, I think the market is ready to roll over. Hopefully gold will pullback, but if the dollar can't find support by Thursday, I'll be rolling into shiny yellow bricks and yen.

Ratios to Reason

The Buywrite Index has been crushing Buy 'N' Hold strategies for months.

Will the BXM:SPX ratio find resistance @ the 10sma?

Gold miners haven't lost much ground to gold, which I interpret as a bullish signal.

Long LSC and short commodities is one of the best strategies I can see. Up almost 20% since this mention on Sunday.

If I could short JNK I'd give this pair a shot too. Treasuries are still holding strong, but boy does it feel bubbly.

Just because Treasuries are going vertical, doesn't mean they won't go to the moon. Long the 20 year and short the shiny yellow stuff is still paying off, and could continue to do so for months.

Defense wins the game, and over trading will kill the most skilled speculator. I'm watching with amusement and trading vicariously through new found Twitter friends. Good luck out there, but I suspect Brian Shannon has the right idea.

The Best ETN (and therefore the most dangerous)

Take a look at the spread between LSC and DJP starting in late June 08.

Clearly this post is a little late to the party, but... WOW.

LSC is an ETN that replicates a technically traded long/short commodities index. It offers a compelling advantage over other commodities ETN's like DJP, and thus I will keep an eye on it. To track the underlying, Bloomberg SPTICTR:IND.

Sadly, it is less liquid than DJP, and contains credit risk via HSBC USA.

Clearly the credit risk is very real as HBC is barely a week from its lows.

A debt product whose underlying is a technically managed commodity index is awesome for many reasons, but until HBC can get its act together, I'm too chicken to jump into this pool.