I’ve sent the first copy of my ETF newsletter (such as it is) out this Sunday. If you’d like to be added to the mailing list (free till the New Year), just leave a comment or email me.

Ultra Financials Proshares (UYG) is a big winner for the system… if you were long and sold out back in May, you saved yourself a lot of grief. If you were a real fancy pants and then shorted it, you’d be making out like a bandit. I urge subscribers not to look at any one ETF signal in isolation, but to consider the portfolio as a whole (there are big winners AND losers).

Las Vegas Sands Plunges on Default, Bankruptcy Risk

“The casino owner said it doesn’t expect to meet a maximum leverage ratio covenant in the fourth quarter. That would trigger defaults that might force it to suspend development projects and ‘raise a substantial doubt about the company’s ability to continue as a going concern.’”

You can see that the market has been worried about LVS for awhile now; the one-year credit default swaps have moved from 50 to 1500 over the past year. This may be another excellent opportunity for the Chinese and Singaporean governments to step in and take stakes in the Sands’ Macau and Singapore operations on the cheap.

U.S. Auto Sales Fall 32% to Lowest Total in 17 Years

“Last month Toyota offered no-interest financing on 11 car and light-truck models. That promotion will continue at least through November.”

Is this the first time Toyota has offered 0%?

Looking at that chart makes me think that the kids hunting for their first job will be as disappointed as those of us who graduated from college between 1990 and 1992… and I can’t imagine what it was like job hunting in the late 1970s. Can any readers share their experience from 1978-82?

I didn’t have time to put out a complete copy of my new ETF newsletter this weekend (sorry about that), but I did look through the most active bear funds and found that eight out of eleven of them gave sell signals:

• QID ~ Last Price 64.68 ~ Sell on 11/3/2008 at open ~ Bought on 9/8/2008 at 46.23
• SDS ~ Last Price 84.19 ~ Sell on 11/3/2008 at open ~ Bought on 6/23/2008 at 63.01
• SKF ~ Last Price 124.38 ~ Sell on 11/3/2008 at open ~ Bought on 10/6/2008 at 119
• DXD ~ Last Price 70.32 ~ Sell on 11/3/2008 at open ~ Bought on 5/27/2008 at 53.67
• TWM ~ Last Price 95.75 ~ Sell on 11/3/2008 at open ~ Bought on 10/6/2008 at 90.52
• SMN ~ Last Price 70.20 ~ Sell on 11/3/2008 at open ~ Bought on 6/30/2008 at 28.60
• FXP ~ Last Price 89.00 ~ Sell on 11/3/2008 at open ~ Bought on 5/27/2008 at 71.25
• EEV ~ Last Price 86.90 ~ Sell on 11/3/2008 at open ~ Bought on 8/18/2008 at 91.38

Also the Long Bond fund (TLT) reversed:

• TLT ~ Last Price 92.83 ~ Sell on 11/3/2008 at open ~ Bought on 6/16/2008 at 89.11

I’m not sure if this means a major bottom is in place, but it’s something for readers to consider. Drop me an email if you want to join the newsletter list — I hope to get a complete copy out next weekend.

Mizuho $7 Billion Loss Turned on Toxic Aardvark Made in America

“On Oct. 18, 2006, Rekeda and his team were offered an $11 million signing-on fee to defect to the Japanese bank … By the time the deal was consummated, the market was turning. On Dec. 11, 2006, the same day Mizuho announced it was setting up an office in the U.S. to create asset-backed debt securities, Fitch Ratings said the outlook for U.S. subprime mortgage bonds was ‘negative.’ It expected delinquencies on those loans to rise by 50 percent.

By December 2007, Mizuho had halted its U.S. CDO business. It fired Rekeda and at least four others on the team, putting an end to the bank’s one-year experiment.”

Sounds like the kid from Kiev timed it just about perfectly.

“In the prospectus, Mizuho pledged to back 87 percent of the [Aardvark] deal” — sheesh, one wonders if they had any idea what they were doing. Aardvark is mentioned here back in March 2007.

Hmmm, there’s something similar about all these funds, can’t quite put my short ultrashort 2x inverse finger on it though.

1. SDK | PROSHARES ULTRASHORT RUSSEL | +194.38%
2. EFU | PROSHARES ULTRASHORT MSCI EA | 189.8
3. SSG | PROSHARES ULTRASHORT SEMICON | 178.06
4. EEV | PROSHARES ULTRASHORT MSCI EM | 176.89
5. SMN | PROSHARES ULTRASHORT BASIC M | 172.81
6. SIJ | PROSHARES ULTRASHORT INDUSTR | 163.83
7. SFK | PROSHARES ULTRASHORT RUSSEL1 | 148.74
8. REW | PROSHARES ULTRASHORT TECHNOL | 142.9
9. RMS | RYDEX INVERSE 2X S&P MIDCAP | 142.15
10. SKK | PROSHARES ULTRASHORT RUSSEL | 141.67
11. MZZ | PROSHARES ULTRASHORT MIDCAP | 141.26
12. FXP | PROSHARES ULTRASHORT FTSE | 140.15
13. SJL | PROSHARES ULTRASHORT RUSSELL | 139.84
14. RSW | RYDEX INVERSE 2X S&P 500 ETF | 135.37
15. QID | PROSHARES QQQ ULTRASHORT | 133.92
16. SDS | PROSHARES ULTRASHORT S&P500 | 124.7
17. SCC | PROSHARES ULTRASHORT CONSUME | 111.98
18. RRZ | RYDEX INVERSE 2X RUSS 2000 | 109.91
19. DXD | PROSHARES ULTRASHORT DOW30 | 105.65
20. TWM | PROSHARES ULTRASHORT RUSSELL | 105.05
21. SJF | PROSHARES ULTRASHORT RUSSELL | 103.11
22. SDD | PROSHARES ULTRASHORT SMALLCA | 101.08
23. SDP | PROSHARES ULTRASHORT UTILITI | 98.84
24. EUM | PROSHARES SHORT MSCI EMERGIN | 95.99
25. EWV | PROSHARES ULTRASHORT MSCI JA | 95.72
26. SZK | PROSHARES ULTRASHORT CONSUME | 85.21
27. EFZ | PROSHARES SHORT MSCI EAFE | 83.67
28. SRS | PROSHARES ULTRASHORT REAL ES | 81.77
29. SKF | PROSHARES ULTRASHORT FINANCI | 79.04
30. SJH | PROSHARES ULTRASHORT RUSSELL | 73.84
31. RXD | PROSHARES ULTRASHORT HEALTH | 72.62
32. DUG | PROSHARES ULTRASHORT OIL & G | 67.29
33. MYY | PROSHARES SHORT MIDCAP 400 | 64.93
34. PSQ | PROSHARES SHORT QQQ | 63
35. SH | PROSHARES SHORT S&P500 | 59.79
36. RWM | PROSHARES SHORT RUSSELL2000 | 51.69
37. DOG | PROSHARES SHORT DOW30 | 50.43
38. SBB | PROSHARES SHORT SMALLCAP600 | +47.8%

I will soon start a new weekly investment newsletter based purely on trend analysis. (Oh no, not another attempt at a newsletter from the Chairman! Sad but true, lol.)

Writing the Box swing trading newsletter was too much of a grind because I had to kick it out every day, and I never want to do that again. I also think the market for long-term investment ideas is much bigger than the market for swing-trading ideas, so I hope to get several hundred subscribers for this new one (at its peak, I had around 100 subscribers for the Box ideas, which was another reason it wasn’t worth my time to continue). But I’m looking forward to writing something once a week that is valuable enough for people to pay for.

The big money is made catching big trends, like I did back in the dot com days (I wasn’t smart, I was just on the right side of things, and then I stupidly didn’t sell anything when it all reversed). And as I’ve learned recently, “value investing” is easier said than done. Day trading is fun and can be very profitable, but most people can’t sit in front of a screen all day, which is essential — trading can’t be a part-time “hobby.” Finally, I’m pretty darn sure that swing trading is for suckers.

The universe I plan to track will be around 100 active ETFs and will give specific long or short calls based on the weekly charts. (It’ll be a little bit like the old weekly trend tables.) The newsletter will be free until January 1, 2009, and then I’ll begin to charge for it (probably $6 an issue or or $125 for a half-year or $200 a year). I plan to write the first issue next Saturday and will shamelessly promote it until the end of the year (and less so ever after).

Here are the buys and sells for Gold (GLD) since it started trading back in 2004. The newsletter will be in table form with specific dates and prices shown. This post is just a half-assed announcement; I’ll have a sample done by next week I hope.

Greenspan Concedes to `Flaw’ in His Market Ideology

“Firms that bundle loans into securities for sale should be required to keep part of those securities, Greenspan said in prepared testimony. Other rules should address fraud and settlement of trades, he said. Greenspan opposed increasing financial supervision as Fed chairman from August 1987 to January 2006.”

I always found people’s reverence for Alan Greenspan a little weird and misplaced. Anyway, back in the real world, we see the Baltic Dry Index down 90%+ off the high it hit earlier this year. That’s a scary chart.

Related:

Oh Ship! No Financing Available, May 13, 2008
Baltic Exchange Capesize Index Moves to New High, April 27, 2007

I was reading that the credit crunch is putting the crimp on Harley sales (”Tight credit is a fundamental challenge for Harley because as much as 75 percent of bike purchases are financed with loans. That compares with 66 percent for new autos”). But the fact is that anyone who can read a chart knows that HOG peaked in 2002 and has been going down, relative to the S&P, for many years now. You have to keep your eyes open and constantly review relative performance charts to have the “correct” perspective.

Related: Chat Transcript: Using Relative Performance Charts

Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt

“The global financial crises sparked the collapse this month of Kaupthing Bank hf, Glitnir Bank hf and Landsbanki Islands hf with debts equivalent to as much as 12 times the size of Iceland’s economy. The three banks accounted for about 76 percent of the OMX Iceland 15 Index’s value prior to the nationalization. Trading in Icelandic stocks was halted since Oct. 9 after the OMX Iceland 15 lost 30 percent in nine days as the country’s financial system collapsed.”

Setting the price of the nationalized banks at zero in the index, eh? Back to basics, which in Iceland’s case means salted fish products.