RIMM and APPL Backtesting Of Buy and Sell Alerts

Speaking of RIMM and AAPL, I ran backtesting of INO's triangle alert tool on both going back for the last 5 years of signals. I always use long term signals (monthly).

These are the buy and sell signals given:




These are the results of $10k initial investment following the signals:

RIMM the ROI was +267.5%. For APPL it was +302.8%.

I have published several other backtesting results here in the past.

To run the tool yourself on any stock, use this link for a risk-free trial (2 months exclusive for ShockedInvestor readers). You can do your own due diligence!

Options For RIMM in 2010, Stock Moving Up or Down

RIMM was downgraded too and the stock dropped as a result. Here are straddles for 2010 for Feb, Mar, and June. Computed with StraddlesCalc.




Please do your own due diligence. Options are very dangerous and may cause 100% loss. This is not advice!

Profit With Citibank Stock in 2010 - Up or Down

Citibank has billions of shares outstanding. It is in deep trouble but too big to fail ($30T in derivatives, imagine if it went under), however, it is clear that something has to happen with it this year. Likely it will be split into smaller units. What will happen to the stock price is a wild guess. We'd like it to move, either way. Here is why.

Here are straddles for various timeframes in 2010. With these, an investor can profit whether the stock goes up or down (as long as it moves). Because C is sitting close to the middle of $3 range, the premiums are very low, but the moves required are around 20-30%. Beware that if C manages to stay in that 3-4 range, then the straddles will be a complete loss.

These are computed wiht our StraddlesCalc tool.

This is not advice. Please do your own due diligence.

The Top Commodity ETFs For 2010 For Medium and Long Terms

What do sugar and lead have in common? They are both overbought.

We computed the relative strength values of all commodity ETFs that trade in the U.S. We then sorted them according to two time periods: medium term (weeks) and long-term (months).

Here they are.

1. Long term, from most oversold to most overbought:



Only COW (agriculture) and DYY (powershares commodity double long) are oversold. The Elements RJZ is the most overbought, followed by the sweet ETF SGG (sugar)!

2. Medium term, from most oversold to most oberbought:

Note of the ETFs are really oversold in this timeframe. JJT is clearly overbought (tin). Note that JJT is screamingly overbought in the short term, with an RSI of 98+.

Please note also that we track all commodity ETFs and ETNs as one of our tracking live sites. You can clearly see which are the most overbought commodities in the charts there. LD (lead) has actually the top return in 2009.

(please click to enlarge)

Here the names of these ETFs:

Note: You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

Top Currency ETFs For 2010, For Short Term, Medium Term, and Long Term

To diversify away from the U.S. Dollar, investors today have many choices in the form of currency ETFs. There are ETFs for many different countries, as well as combos or baskets of currencies. We computed the RSI values of all currency ETFs on the market and analyzed the results on three different timeframes (short term, medium term, and long term). RSI values are very good indicators of overbought and oversold conditions.

Here are the results.


1. Short term:

ETFs are ordered by RSI7-daily. The results are of interest to those investors who look at trading periods of days (as opposed to weeks or months).




AYT (Barclays Gem Asia-8) is severely oversold. This thinly traded ETF seeks to provide investors with monthly coupons and a cash payment based on the performance of the US dollar investments in 8 currencies: CNY, IDR, INR, KRW, PHP, THB, MYR, and TWD. AYT, however has very low volume. So for someone looking for short term in and out (i.e, liquidity), it is not a good vehicle.

Next as most oversolds are JYN, FXY, JYF, all Japanese Yen. Next in line is YCL, an ultra Yen, so you get the idea.

The most non-Japanese oversold ETF is GBB, which corresponds to the Britsih Pound.

As for most overbought, the honor goes to DBV and YCS. We have written about DBV before (a wonderful guest post). YCS is an ultra short Yen, so this matches the oversold Yen funds.


2. Medium term:

In the medium term (weeks), the only oversold ETF is CYB, the Chinese Yuan, although the New Zealand dollar is not far behind.

There are no overbought currencies in this timeframe. The closest are UUP and DRR (double short Euro).

3. Long term

For long term investors (timeframes measured in months), there are no currency ETFs that are oversold or overbought. The closest to oversold is YCL (ultra long Yen).

Not surprisinly, the closest to overbought are BZF (Brazil) and FXA (Australia), definitely two currencies that were on fire in 2009.

We track all currency ETFs live here.




As always, you can receive buy and sell alerts of these currency ETFs by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Here are the currency ETF names and average trading volumes:

Stock and ETF Correlations For Q4 2009: How to Diversify Your Investments

2009 has ended, and with that it's time to look at the correlations in Q4 of 2009. Every end of quarter we analyze the correlations of major stocks and ETFs.

Correlations are very useful for diversification. To properly diversy, am investor should stay away from highly correlated stocks. That means both positively or negatively correlations.

The most uncorrelated stocks are highlighted in bold face in the table below.

(please click to enlarge)

You can see the best uncorrelated pairs below:

• XLF and DIA (surprise!)
• FXE (Euro) and VIX (volatility)
• FXE and ECH (Chile)
• GS and EWZ (Brazil), FXA (Aussie dollar), GDX (Miners), USO (oil)
• IWM (Russel 200) and FXA, as well as GLD and USO
• UNG and FXC (Canadian loonie)
• UUP (US dollar) and IWM (interesting!)

This is the way it was in Q4 2009. Note: Use the Technical Trend Analysis Tool to receive technical analysis and alerts of these stocks and ETFs.

Other correlations studies are forthcoming (currencies, commodities). Please stay tuned.

$293.3T, Current Amount of Derivatives That U.S. Banks Control: JPM $79.3T, BAC $75.0T, GS $49.8T

What's a trillion here or there... This is the latest report on derivatives held by U.S. banks and holding companies:


(please click to enlarge)

The top 5:

• JPMorgan: $79.397T
• Bank of America: $75.034T
• Goldman Sachs: $49.83T
• Morgan Stanley: $41.830T
• Citigroup: $34.473T

The top 25: $293.3T. Source: U.S. Treasury publication (page 23). Indeed, all trillions.

Do you think these can be allowed to go under?

Proper Diversification in 2010 Through Global ETFs

As another month ended, we computed the correlations of the global ETFs and ETNs that trade in the U.S. during Q4 2009. We track these ETFs live here.

Correlation is crucial for proper diversification. You do not want highly correlated stocks, either positively or negatively.

The chart below is color-coded. Red and green indicate high correlations. Bold face indicate lack of correlation (good).

(please click to enlarge)

There are lots of choices for diversification. These were some of the global ETF that were not correlated:

• (Japan and Canada), and EWI
• EWI (Italy) and ECH (Chile) and EIS (Israel)
• BRF (Brazil small cap) and EWO (Austria)
• EWJ and EWC
• EWO and EWS (Singapore)
• EWW (Mexico) and EWS
• HAO (China) and EWO, and EWI
• PJO (Japan) and EWO, EWO, EWY (South Korea), EZA (South Africa), THD (Thailand), TUR (Turkey)
• SCJ (Japan), and EWP (Spain), and EZA, TUR
• EWD (Sweden) and THD, TUR

We will be looking very shortly at the top global ETFs for 2010 as well, please stay tuned.

Note: You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

These are the ETF names:

Guide To Top Leveraged ETFs For 2010: Short Term, Medium Term, Long Term

We track all leveraged ETFs on the market here. We computed the daily, weekly, and monthly RSI values of all leveraged ETFs in the U.S stock market. We then sorted them based on three timeframes, short term (days), medium term (weeks), and long term (months).

Here are the top oversold and overbought ETFs for 2010 for all these timeframes.

Since leveraged ETFs are evil and have caused 'buy and hold' investors hundreds of billions of dollars in losses, they are not really indicated for medium and long time frames, they really should only be used in the short term. The lists below can help you get a good indication of what is overbought and oversold, i.e, what to buy and what to sell.

The lists show the ETF symbol, ETF name, last price, and RSI7 daily, weekly, and monthly values.

These are the 2009 returns, all ETFs in one huge chart (please click to enlarge):




1. Short Term

1.1. Oversold:



Clearly oversold in this timeframe are RTW (Rydex Inverse 2x S&P Select Sector Technology), YCL (ProShares Ultra Yen), and an oil ultra short ETN, DTO (PowerShares DB Crude Oil Dble Short)


1.2 Overbought:



In the overbought category here we have YCS (ProShares UltraShort Yen), UCO (ProSharesUltra DJ-AIG Crude Oil), and RTG Rydex 2x S&P Select Sector Technology).


2. Medium Term

2.1 Oversold

Clearly oversold here is RTW (Rydex Inverse 2x S&P Select Sector Technolog).

2.2 Overbought



Overbought includes ROM, RTG, LTL


3. Long Term

3.1 Oversold



Oversold: EEV (UltraShort MSCI Emerging Markets), CMD (ProShares UltraShort DJ-AIG Commodity), REW (ProShares UltraShort Technology)

3.2 Overbought:



The only overbought ETF is ROM (Powershares Ultra Technology). Again, please remember that these leveraged ETFs suffer from any longer timeframe holding. This is clearly reflected in the lact of overbought names above.


4. Top 10 ETFs based on Average RSI

Below is a list created based on te average of all three timeframes.

Top 10 Oversold:

Top 10 Overbought:

A new name here is BBD ETN (PowerShares DB Base Metals Double Long), and notice QLD (the ultra long QQQ version).

Please note that you may receive technical analysis and alerts of any of these ETFs by entering the symbols in the Technical Trend Analysis Tool, (powered by INO). Better yet, you can get two months of risk-free access to the real-time stock alert tool here (exclusive for Shocked Investor readers).

Please do your own due diligence.

Names

Here are the ETF names, as well as their average daily trading volume:


(please click to enlarge image)

The Top ETFs For 2010, 25 To Buy and 25 To Sell For Both Long and Medium Terms

There are nearly 800 ETFs that trade in the U.S. We computed the RSI values for all of them. We then sorted them by RSIs weekly and monthly, ascending and descending order. Below you will find the top 25 for each category, for the long term (measured in months) and for the medium term (measured in weeks). In total there are more than 50 ETFs listed.

The Relative Strentgh Indicator is a great tool that shows overvalued and oversold conditions. Typically, values over 70 indicate overbought conditions, and values below 30 show oversold conditions. The greater or lower than these thresholds, the more extreme and unsustainable the the conditions are.

Top 25 To Buy Long Term:

The most oversold ETFs in the long term category are EEV, ultra short emerging market, and CMD, Ultra short commodities.

UNG, the poor natural gas performer is in the list, as is DUG (ultra short oil co's). Interesting to see these two in the same list.

Other very recognizable names are FXP, the ultra short China ETF, as well as QID (ultra short Nasdaq/QQQ). QQQ is on the weekly to sell list (please see below).

Top 25 to Sell Long Term:

Here the most oversold are somewhat exotic instruments PVI (short-term tax-exempt variable-rate demand obligations ,VRDOs, issued by municipalities in the United States), and SHV (short treasury bonds). Unless you really know what these are, it's best to stay away. Another name on the list is PXR, which tracks "price and yield performance of S-Network Emerging Infrastructure Builders index, normally investing at least 90% of total assets in the securities and ADRs and Global Depository Receipts, GDRs.

PKOL tracks the largest and most liquid companies involved in the exploration for, and mining of coal, as well as other related activities in the coal industry.

RTR is in there as well, it's an interesting one ("is an exchange-traded fund that seeks to achieve its investment objective of outperforming the total return performance of the S&P ADR Index by investing in the constituent securities of the S&P ADR Index in the same proportions as the RevenueShares ADR Index.")

A collection of strange ETfs for sure.

Top 25 To Buy Medium Term:




RTW is a 2x bear (inverse) technology ETF. Similarly, TLL is an ultra-short telecom ETF. Sounds like a theme.

Top 25 to Sell Medium Term:

HYG is High Yield Corporate Bond ETF. JNK, you can guess what it means (junk bonds!), Barclays Capital High Yield Very Liquid Index. Same story for PHB, Powershares version, High Yield Corporate Bond Portfolio.

Perhaps the most recognizable name there is QQQ. its weekly RSI is 77.2 It's daily RSI is also very high at 74.53. The monthly is getting there at 65.43. These are scary (too high) numbers that reflect the general market valuations.

These are the ETF names:

(Please click to enlarge)

To receive technical analysis and alerts of these ETFs sent automatically to you, simply enter the symbols in the Technical Trend Analysis Tool.

Please do your own due dilligence.

2010 Options for Stocks, Gold, Miners, US Dollar and Currencies, Global ETFs (Brazil, Russia, Japan, China), Oil and Gas

2010: a brand new year where anything can happen with the markets. Will they continue to be pumped up, or will the next sovereign debt crisis cause a crash? Will Japan's financial situation finally cause them to declare a default - or devalue their currency? Or will this happen in Spain, Greece, Hungary, or Ireland? It is an extremely dangerous world at the moment. Something will happen, what it will be, it is likely something nobody expects.

The Shocked Investor does not make market projections, instead, we love compiling data andf using straddles to figure out where the best odds are. Below are mid year straddles and strangles that allow an investor to profit whether the markets go up or down - as long as they move. These are for June, July or August 2010.

The straddles were computed with our StraddlesCalc tool, which shows the number of calls and puts to buy for a $1,000 investment on each straddle branch (you can use any $ amount). The tool also shows what the maximum move needed to profitability is. Because there are 6 or more months to expiry, the actual move needed may be far smaller as there will be residual value left on the wrong side of the straddle.

1. General Stocks and Financials: IWM, SPY, XLF



Our favorite is always IWM, for liquidity and speed of execution. Will it move 16% in 6 months?


2. Gold and Miners: GLD, AUY, GG



If you believe gold will move by 15% in 6 months versus the US dollar then those are for you. You can clearly see the leverage and implied volatility on the miners too and their options are a lot pricier.

We track miners ETFs live here.


3. U.S. Dollar, currencies (Brazil, Australian dollar, Yen)



Will the US dllar carsh for good, or will it receover, bring the markets up? Only around 7% move is needed for the Yen, Aussie dollar and UUP, and 15% for the Real. It is an election year in Brazil, expect volatility.

We track all currency ETFs live here:


(please click to enlarge)


4. Global markets (Brazil, Russia, Japan, China)



A 20% move in Brazil (in USD)? Remember that the 2009 move was 110%! (we track them live a here):




5. Oil and natural gas



It is hard to find an easier loser than UNG. Where else can you get an EF that loses 15-20% every month by doing nothing? (well, sure, there is always FAS and FAZ). Anyway, will the price of natural gas recover enough to compensate for the dreadful contango?

We track oil ETFs as well.

6. FAS

Speaking of FAS, some people still choose to lose their money on this and other leveraged ETFs. We track the losses on FAS and FAZ with our FAZ-FAS Loss-O-Meter. Here are July strangles. If the markets to down or simply oscillate, these could be great winners.

The mindboggling losses on FAZ + FAS as of Dec 31:




Note: You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

This is not advice. Please do your own due diligence. Options are dangerous and may cause 100% loss.

Happy 2010, Around The World In Pictures

Wishing all readers a great and happy 2010. Much health, happiness, and growth in your portfolios!

The celebrations around the world last night:

Brazil (Rio, Sao Paulo):





Rome:



New York:


Russia:



Singapore: