Just some quick words about what are the strong uptrends I'm seeing now. I think there are 3 of them worth noticing:
- Precious metals: I talked about it in more details at the last blog and this is the strongest bull market I firmly believe in for the long term. I have a quite strong hunch that it is coming out of its relatively long consolidation period in the past year or so and is heading up again with a strong force. For those more aggressive, DGP is a 2x leverage ETF for gold, which I personally had bought in the past and had no problem with tax on K-1 form reporting.
- It appears the housing market has bottomed and the home builders have shown some strong uptrend. If you want to bet for it, ITB is the ETF for this sector, which has performed very well in the past half a year or so, though I'm not sure now is the best time to get in given my view that there is some severe correction looming. But it should be a good idea to establish a position at any weakness.
- Another strong uptrend I'm seeing is the health care sector, especially pharmaceutical companies and biotechs. I have been in a biotech ETF for many years, PBE, which is picking up its upward steam quite a bit in the past few months. For pharma companies, RXY is the one to consider. Again maybe not be a good idea to get in immediately but wait for a pull back.
There is another strong trend but not upward. I have talked about it recently, that is the oil sector. I think there is some quite severe correction for it to come, which is not necessarily a short term trend. Not many people know and realize but the US is becoming a big oil producing country in the world but its demand has come down quite a lot. This is not a good condition to bet for a bullish oil.
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