Portfolio Theory $DBC $EEM $IWN $IYR $PLW

A weekly look at the five least correlated ETF's.

Although oil made new lows, DBC has yet to do the same. If I see a X with volume, I may begin accumulating.

EEM is pulling back within an uptrend, and once I see a X, I'll get on board with a stop below last weeks low.

IWN looks poised to break the downtrend and violate the upper Bollinger for a second time. Last weeks low is a critical boundary.

IYR needs to stay above last weeks lows, otherwise we will see a sell off across the board.

Even with the brouhaha this past week, PLW didn't rise to new highs, which may signal waning momentum.

It is likely that equities from the Emerging Markets, Small Cap Value and Real Estate sectors will share a similar fate if they breach their weekly lows. If that should happen, PLW will continue to rise and DBC will probably fall some more. As always, stay flexible and manage your emotions.

Digesting Indecision

Not much action in the equities market this week.

According to my indicator, the SPX has managed to stay bullish, but it is very close to resuming a downtrend.

The buywrite/index spread is rising (bearish), but it is in a resistance area, and any turn around would be bullish.

 

The NAMO has turned positive, which is good for equities.

 

The summation index continues to rise, another reason to be positive on stocks.

 

Finally, the 30Y Treasury is beginning to show weakness relative to Gold.  This may signal an end of deflationary fears.

 

Until volume returns to the market, any move should be view with suspicion if you’re a trend trader.  Equities remain range bound, so I’m focused on opportunities in fixed income.  I suspect the primary direction of 2009 will be revealed within the first two weeks of January, so I will continue to sit patiently, watch Twitter and play the Ukulele during market hours.

Today's Twittered Tickers $AMZN $FCX $GLD $PLD $WMT

Here are the tickers making noise on StockTwits

The last time I mentioned AMZN was here, and contrary to my forecast, it has risen over 15%. Now that it is approaching the upper Bollinger, I'm technically more bullish, but I suspect this stock is an investment trap.

FCX remains in a vicious downtrend, but a bounce to the upper Bollinger looks like a potential trade in the coming week.

GLD is rising on non-existent volume, but a breakout would be a nice place to trade a long scalp, and then swing short on a pullback to the trend line.

PLD is experiencing a high volume rally with tons of momo, and though it looks due for a pullback, it is a dangerous place for shorts to play.

WMT continues to show strength, but like AMZN, I suspect that fears of fundamental economic weakness will reemerge and bring this stock lower.

GLD is the most interesting trade on my radar, because it is an indcator of global economic stability. Weakness in gold will reestablish deflationary fears, but if it starts to make a run for 1000, there will be talk of hyperinflation. AMZN and WMT have had nice bounces, but regardless of their sector out performance, they will be dragged down with their siblings if there is no sign of economic relief in 2009.