Mexico Fiesta, U.S. Siesta
The tradable
Mexico fund threw a fiesta Monday as Mexican financial
markets cheered Vicente Fox’s presidential victory,
overturning 71 years of one-party rule in the country. The
tradable U.S.-focused funds had a good day as well, although
the low volume of the market siesta renders those moves
suspect.
The Mexico WEBS
series
(
EWW |
Quote |
Chart |
News |
PowerRating) surged 9.9%, blowing past its mid-level of
17 3/8. It was the day’s biggest gain among the
exchange-traded funds.
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Momentum traders
who trade for the intermediate pull should avoid stocks or
tradable funds that are priced below their mid-levels, the
point where a recently corrected stock has made up half the
point loss of the correction. Stocks below their mid-level
are presumed to face heavy overhead supply, the
amount of shares in the hands of shareholders with paper
losses. Wall Street calls these buyers weak holders because
they tend to look for exits and sell into rallies, blunting
further share-price progress. You can find a stock’s
mid-level by summing the pre-correction high and the
post-correction low, then dividing the result by 2.
WEBS, or World
Equity Benchmark Shares, enable you to trade foreign markets
like individual stocks while enjoying the diversification of
an index mutual fund. Barclays Global Fund Advisors operates
17 WEBS funds. Each one tracks a country index compiled by
Morgan Stanley Capital International. For an introduction to
WEBS, check out my
For the most part,
the U.S. tradable funds remained in ranges. The
Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) pulled higher, trying to put
an end to the recent decline. But let me stress again that
one should give none of these moves much weight, given
absence of real volume. The Semiconductor HOLDR began
trading May 5 on the American Stock Exchange.
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The interest-rate
sensitive funds responded to further signs of a slowing
economy. The National Association of Purchasing Management
manufacturing index registered a 51.8 reading in June.
Economist forecasts gathered by Reuters averaged out to a
53.5 reading.
The Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) reversed and gained 1.8%. The Utilities SPDR
(
XLU |
Quote |
Chart |
News |
PowerRating)
picked up 3.0%.
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