Our speculation that the market is emotionally driven seemed to be proven on Tuesday, although there was some solid good news in the Empire State manufacturing report. The pre-market commentary was about an announcement from Barclays Bank that sent European shares much higher.

Everything in the Tracking Table was up except for JPS, currency, and natural gas. The strongest ETF’s were TAN, GUR, EWA, SLV, XME, FCG, USL, JRS, KOL, NLR, DBC, EWO, RQI,  and SEA, all over 3%.

We dropped puts on everything but FCG, the euro vs. dollar ETF. The dollar fell the way it previously has when stocks have rallied, but it is also getting buying pressure because of doubt about the euro. We are skeptical about Europe because the Greek problem is not resolved. There could still be a dispute–however, if you wait for resolution, the opportunity to profit will pass. You have to take risk to make money. The dollar vs. euro could quickly reverse if the squabble over fixing Greece continues.

We bought XME as a commodities play as it ran up 3.76%. We also bought IBB and JNK on the strength of their moves. We bought AOD to accumulate it, even though it did not move much higher. We have tight stops on everything. 

For information on the ETF Letter/our strategy, go to www.etfdiscipline.com

 Regards,

Paul Accampo