Wednesday, September 13, 2006

What I'm Watching

Commodities. Especially oil and copper. (link to chart over at Chairman Mao)



Mid-term elections. Get the latest rundown from the Wall Street Journal's Morning Briefing (sub required). Bush and Rove are working hard to regain momentum. Most experts agree it's hard to see the Democrats turning over very many seats, as both parties enjoy extremely high re-election rates among incumbents anyway. But I still think the mood is shifting.

Advance/Decline line.

Short Interest still very high.


Gaps faded. I'll get more concerned when I see the pre-market/market open higher, only to close lower. That pattern is frequently a tip that momentum and individual traders are anxious to get in early, while the smart money lightens up through the rest of the day. There have been times in the past where this pattern persisted for some time before the market rolled over ugly.

Sentiment surveys still bearish (although this week should change that). Businessweek explains.

Hedge Funds closing in on Fiscal Year End. This Heard on the Street column mentions some of the most expensive money market funds available to wealthy investors.
Some of the most hallowed names in the hedge-fund world are producing very human returns this year.

They've been dogged by confusion about where interest rates, stocks and commodity prices are heading, and poor bets on emerging markets and housing-related shares...

Overall, hedge-fund returns are in line with markets. Merrill Lynch's hedge-fund index is up about 4% through Aug. 28, compared with a 7.2% gain for the DJ World Index, a rise of 4.3% for the Standard & Poor's 500-stock index, and a gain of 2% for the Lehman Brothers bond index. But hedge funds that focus on stock picking -- so-called long-short managers who buy some stocks and bet against others -- are up a meager 1.4% so far this year, according to the Dow Jones Equity Long/Short (U.S.) Index.


Jubak: I'd like to see more articles like this. And fewer like this. (No offense, Mr. Jubak.)

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