On January 23 of this year two new 3x leveraged ETNs were launched, comprised of FB, AMZN, AAPL, NFLX, GOOGL, BABA, BIDU, NVDA, TSLA & TWTR, and their descriptions are as follows…
- FNGU is an exchange traded note that tracks 3x the daily price movements of an index of US-listed technology and consumer discretionary companies. The index is highly concentrated and equally weighted.
- FNGD is an exchange traded note that tracks 3x inverse the daily price movements of an index of high concentrated and equally weighted US-listed technology and consumer discretionary companies. The note uses derivatives to achieve its -3 exposure.
They are both highly risky investments and are very thinly traded.
The consumer staples ETF, symbol XLP, is comprised of firms like Coca Cola, Pepsi, and Procter & Gamble. (As someone who never drinks the sugar water called soft drinks, I marvel at how the country absolutely lives off this crap…………but I digress). This ETF broke its extremely long-term channel a while ago and is perfected beautifully for a hard fall.
The Homebuilders ETF (XHB) is poised to make a new all-time high as it faces its peak set just before the 2007/08 financial crisis struck, as shown on the monthly chart below.
There are two interesting things I notice on this chart. The volume moving average has been steadily declining since September of 2013 as the momentum indicator is nearing its record peak set in May of 2013…hinting of potential profit-taking at current overheated levels.
So, whether, or not, we are about to see a rollover anytime soon should be revealed in coming days/weeks. Keep an eye on volumes and momentum, for possible clues. Furthermore, as the Fed considers 3 to 4 interest rate hikes this year, no doubt mortgage rates would rise, as well, negatively impacting this sector.
The S&P 500 Index (SPX) is shown in the background as the blue area. If the XHB rolls over, it may also bring the SPX with it, but, as I described in yesterday’s post, keep an eye on HYG, as well. (more…)
My broad disposition these days is (a) bearish bonds (b) bullish precious metals (c) WTF on equities. I will say, however, there are select equity sectors that I think are still able to (gasp) descend. One of them is real estate. The ETF below illustrates this nicely; it is the triple-bullish fund based on real estate, and as you can see, it’s in a terrific topping pattern. It did a fantastic job filing its gap, and now I think it’s going to be descend-a-palooza.
I’ve been yammering on quite a bit on my Tastytrade show about how the dollar’s weakness and the yen’s strength would finally give the gold bugs a much-needed rally. Well, it’s here, and GLD has cut above an important level of resistance, besides having already blown past its descending trendline.