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Tuesday, September 12, 2006

Tech Derivative Stronger Than Dow

Commentary – Semiconductor stocks experienced solid gains yesterday, evident by the 2.4% gain in the Philadelphia Stock Exchange's semiconductor index, its biggest one-day percentage gain in almost a month. I’ve viewed semiconductors favorably for several weeks now, with IGW being upgraded to a “buy” recommended sector derivative on August 16th.

Short-Term Technical Indicators – Six of the eight short-term, technical indicators weakened overnight with the S&P 500 On-Balance Volume % and 15-Day Relative Strength Index the only indicators improving. Three are higher than last week’s levels, seven are higher than last month’s reading and six are stronger than that of one year ago.

Long-Term Market Model – Bullish since August 23rd.

Investor Sentiment – According to the International Monetary fund, global financial markets remain strong, but risks of an economic slowdown continue to increase. Furthermore, the seemingly in-evitable pause in growth might trigger a market correction more severe than the one occurring in May 2006. However, William Poole, president of the St. Louis Federal Reserve Bank, commented yesterday that the economy is “robust” and that inflation appears to be in check. Needless to say, it’s difficult to establish sentiment with contrasting data and comments.

Asset Allocation – 75% to 85% invested within the actively-managed portion of the overall investment portfolio. 15% to 25% in cash or bonds.

Beta Exposure and Portable Alpha Generation

Top Rated Major Market Derivative – NASDAQ 100 (QQQQ)

Top Rated Style-Box Derivative – Large Cap Core (JKD)

Top Rated Sector Derivative – Dow Jones iShares Real Estate (IYR)

Today’s Top “Buy” Recommended Stocks
  • Veritas DGC Inc. (VTS)
  • Piper Jaffray Companies (PJC)
  • Sequa Corp. (SQA-A)
  • Cooper Companies Inc. (COO)
  • Apple Computer Inc. (AAPL)
Today’s Top “Buy” Recommended Rydex Mutual Funds
  • Rydex Real Estate (RYHRX)
  • Rydex Dynamic OTC (RYVYX)
  • Rydex Dynamic Dow (RYCVX)
  • Rydex Dynamic S&P 500 (RYTNX)
  • Rydex Consumer Products (RYCIX)

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