For GT Blog February 26, 2009
More on the beaten up Financials
As of mid week the Canadian Financials are down about 55% from their June 2007 peaks – and the US Financials are down a stunning 85% from their June 2007 peaks
We can explain away the severe US financials under-perform by arguing the Canadian banks are in better shape – but – there could be another reason for the US debacle – undeclared shorting via the ProShares UltraShort Financials ETF otherwise known as the SKF
Over the past several weeks the average daily dollar volume on the SKF is about $7.1 billion which equals the summed dollar volume of the SPDR Financial index top 4 stocks by weight. Money flowing in and out of the larger ETF’s can move the underling asset be it stocks or gold – as observed when the SPDR Gold Trust ETF (GLD) is subjected to bullish and bearish stampedes
Note the failure of the SKF to make new highs through February – a bad omen for the US Financial bears
The Double Short Financials SKF in action – What?
More on the beaten up Financials
As of mid week the Canadian Financials are down about 55% from their June 2007 peaks – and the US Financials are down a stunning 85% from their June 2007 peaks
We can explain away the severe US financials under-perform by arguing the Canadian banks are in better shape – but – there could be another reason for the US debacle – undeclared shorting via the ProShares UltraShort Financials ETF otherwise known as the SKF
Over the past several weeks the average daily dollar volume on the SKF is about $7.1 billion which equals the summed dollar volume of the SPDR Financial index top 4 stocks by weight. Money flowing in and out of the larger ETF’s can move the underling asset be it stocks or gold – as observed when the SPDR Gold Trust ETF (GLD) is subjected to bullish and bearish stampedes
Note the failure of the SKF to make new highs through February – a bad omen for the US Financial bears
The Double Short Financials SKF in action – What?
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1 comment:
If Put Options are included in the fund (I don't know if that is the case), the losses may be due to the impact of a sideways market move on the dollar value of Puts.
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