Wednesday, April 04, 2007

There's strength in them internationals...

Just a real quick note here. Both EEM and EFA closed at all time highs yesterday and today the strength continued. This is to be respected even as I continue to expected a spill over from the housing sector. More on that later in a fuller post.

All the major indices, Dow, S&P, Nasdaq and Russell made higher highs, which meant upside testing is a lock. I reduced my short positions but kept the leap puts on XLF which remains weak. Utilities have been phenomenal through out this mini correction, and my ERH (Evergreen utility and high income fund) has been doing well.

Oil is down only a smidgen after Iran agreed to release the sailors. This was not unexpected; however, I was mistaken about the oil seasonals. April is actually one of the strongest months, with average gains of over 2.5% (4/3/07, ContrarianInvestor, subscription required). At the same time, oil stocks have done better than oil the commodity, so the jury is still out.

Gold's action has been unambiguous on the other hand. Gold stocks are looking intent on assaulting HUI 362 again. I've been disappointed too many times to get my hopes up, although my portfolio would really cheer that.

Overnight Asian markets are showing some red (10 pm). Mr. Market is doing its best to chop everybody up. Good luck and be safe!