Monday, September 24, 2007

Currency Harvest Moves with the S&P 500

The Currency Harvest fund (DBV) is a great fund to own during a bear market, but it turns out to be a poor defensive fund during a bull market.
Looking back at its historical performance, DBV has experienced corrections of its own around the same times that the S&P 500 did. Such paired bull-market corrections include: 1998, 1999, 2004, 2006 and this year's July-August correction.

I require a defensive fund to go up during a correction more often than it goes down, and unfortunately DBV doesn't fit the bill.

Tuesday, September 18, 2007

A very good day

The S&P 500 closed near 1520 today, its highest point since July 23. That's only 2.2% below the S&P all-time record close of 1553, meaning we're out of correction territory.

Meanwhile, SSO is up 5.9% today and 14.9% from its correction low on August 15. There will still be some bumps along the way, but we should be in good shape as long as everybody else remains gloomy.

My indicators tell me S&P will reach at least 1600 in the next several months, which is a 5% gain from here and a 10% gain for SSO.