June 4, 2009
The indices rose about 1% today. The NASDAQ
8,750.24, and the S&P 500 added 10.7
to close at 942.46.
The VIX slipped -0.84
to 30.18. Oil
closer to $70 a barrel, at $68.90
a barrel, while gold
This market behavior is what one might expect from a
market that has gone from the bottom of its short-term range to its
break-out at the top of its range. There must now be a bevy of claims that
the economy is getting ready to tank, and that the stock market is
prepared to follow suit. Otherwise, the stock market wouldn't climb a wall
of worry, but would immediately jump to its bull market peak. For whatever
reasons, it doesn't normally work that way.
Two ultra index funds that offer the prospect of
doubled gains (and doubled losses) are the Proshares Ultra Emerging
Markets, UUPIX, and the Proshares Ultra S&P 500 Exchange-Traded Fund,
SSO. (I've had major reservations about the recent performance of UUPIX,
but by now, it seems to have redeemed itself.)
The charts below show UUPIX and SSO plotted together
with their underlying averages.
Both of these funds might be expected to quadruple if
their underlying indices returned to their 2007 highs. I don't expect that
to happen, but profitable moves from here look plausible.
I plan to sell when their 50-day moving averages turn
The two charts below show these funds' 25- and 50-day