Real Estate And Semiconductors Were Monetized By QE 2 … Where As Gold Stocks Were Decapitalized By The US Federal Reserve Purchase Of Debt

Financial market report for January 27, 2011

1) … Introduction
World stocks, VT, rose today as the Yen, FXY, was downgraded; that is yen based carry trades got a free ride and boost today, as the Yen, FXY was downgraded. Those who received the greatest benefit were those long the Swedish Krona and short the Japanese Yen, as seen in the chart of FXS:FXY. In as much as gold had a strong sell off today, a reversal is clearly at hand, with stocks falling lower and gold going up.  

2) … Real Estate and Semiconductors were monetized by QE 2, where as gold stocks were decapitalized  
Real Estate, IYR, + 1.4%, rose to a new high today and Semiconductors, XSD, 2.0%, rose strongly; both are very much the poster investment for moneyness coming from US Federal Reserve easing of monetary policy.

But gold stocks, GDX, continued to fall lower today; these are continuing to be deleveraged by falling US Treasuries, EDV, caused by monetization of debt by the US Federal Reserve and on profit taking and short selling of gold as is seen in the chart of EDV, GDX and GLD where disinvestment in the 30 Year US Government Bond, EDV, has decapitalized and depleted value from the gold mining stocks, GDX, relative to gold.

A … ETFs rising today included the following.
Semiconductors, XSD, 2.0%
US Health Care Provider, IHF, 1.7%
Nasdaq Internet, PNQI, 1.7%
Dow Jones Internet, FDN, 1.7%
Real Estate, IYR, 1.4%
Small Cap Information Technology, XLKS, 1.1%
Small Cap Health Care, XLVS, 0.9%
Environmental Services, EVX, 0.9%

B … Stocks rising today included
Automobile stocks F, JCI, AXL, ALV, MGA, TEN, TRW, moved higher today.

Fertilizer manufacturer, Potash, POT, rose.   

Home Improvement Stores, Home Depot, HD, and Lower, LOW rose.

Western Digital, WDC; it shows perfect symmetry in its Elliott Wave count

The Euro, FXE, rose on the downgrade of the Yen, FXY, causing the EUR/JPY, FXE:FXY, to rise taking European stocks, VGK, Germany, EWG, Italy, EWI, Spain, EWP, Belgium, EWK, and Austria, EWO, as well Siemens, SI, ENI, E, and Repsol, REP, higher.

3) … The Elliott Wave count on the S&P Weekly suggests that a market top is coming in; what follows will be a terrific loss of investment value.
Chart shows that the Elliott Wave count on the S&P Weekly, SPY Weekly, is cresting up into an Elliott 2 Up at 129.67, which will soon be followed by a Elliott Wave 3 Down. The Elliott 3 of 3 Waves are the most sweeping and powerful of all economic waves. They are the ones that build wealth on the way up and destroy wealth on the way down.

The chart of the S&P Daily, SPY Daily, shows a five of five completion at 129.67.

What is coming is the total destruction of fiat wealth. That is why I recommend that one purchase and take possession of gold bullion

4) … ETFs falling strongly today included the following
Junior gold mining shares, GDXJ, 3.0% and Gold Mining, GDX, 2.5%, due to ongoing deleveraging from US Treasury caused by monetization of debt bu the US Federal Reserve and on profit taking and short selling of gold.

Brazil Small Cap, BRF, -3.6%.
Brazil, EWZ, -1.5%
Brazil Financials, BRAF, -1.5%; Chart shows that it was the failure of the Brazilian Financials, BRF, that took the Brazil, EWZ, and Brazil Small Caps down which is in large part due to inflation destruction.

India Small Cap, SCIF, -2.7% on inflation destruction and extended and expanding governmental turmoil
India Infrastructure, INXX, -1.6%
India, INP, -1.3%
India Earnings, EPI, 1.7% Chart of all India ETFs shows the common destruction that has come with inflaton destruction and e3xtended and expanding governmental turmoil  

Turkey, TUR,  -2.2% on carry trade disinvestment

Latin America Small Caps, LATM, -1.7%, on carry trade disinvestment. It looks like its going to hasta la vista baby to Latin America leader, Grupo Aeroportuario del Suereste, ASR, as it manifested massively bearish engulfing today.

China Financials, CHIX, -1.6% on china tightening

Emerging Markets Financials, EMFN, -1.1% on inflation destruction
Emerging Markets Consumer Discretionary, ECON, -1.0% on inflation destruction

5) … A number of ETFs and stocks manifested bearishly today
Coal, KOL, manifested bearish harami, together with Coal Producers Arch Coal, ACI, and ANR Resources, ANR.

Steel, SLX, manifested bearish engulfing; and Schnitzer Steel, SCHN, and did US Steel, X,  manifested bearish harami.

Metal Manufacturing, XME, manifested bearish harami.

Energy, XLE, manifested a lollipop hanging man candlestick at the top of an ascending wedge.

Energy service, OIH, manifested a bearish harami at the top of an ascending wedge.

Basic Materials, IYM, manifested a lollipop hanging man candlestick.

American Water Works, AWK, manifested bearish harami at the top of an ascending wedge.

6) … Oil manifested bearish engulfing and gold fell lower.
Oil, USO, manifested bearish engulfing today, suggesting a fall lower is coming soon.

Unleaded Gasoline, UGA, -1.7%, has seen a lot of speculation buying, some took profit today.

Gold, GOLD, came under heavy selling pressure, and fell lower to close  2.5% lower to close at 1,311; next level of support is lower at $1,300.

The Gold ETF, GLD, closed at 127.93; next level of support is lower at 126.0

7) … The US Dollar, $USD, traded lower; and the Euro, FXE, rose to 136.86 while the, Yen FXY, fell to 119.24.

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