Holiday Rally

I used the proceeds from my Currency ETF trade to take a rather large position in DIA - Diamonds (Dow Jones Industrial Average Index ETF). I also topped off my long term holdings in FSPTX - Fidelity Select Technology Fund, FSPHX - Fidelity Select Health Care Fund, and FIGRX - Fidelity International Discovery Fund.

We've just had a 10% correction and we're heading into the traditional holiday rally season. I think the prospects are good through the first of the year. I don't expect too hold DIA after the first of January.

Currency ETFs

I sold my currency ETFs, FXE (Euro) and FXY (Yen), today. I believe the bulk of the U.S. dollars decline is over and I want to raise some cash as we go into a historically strong season for the equity markets. When fashion models and rappers pick up on a trend I take it as a sign to get out.

As an investment, currency ETFs have two profiles. First, they hold cash and invest with banks for dividends based on foreign interest rates. Second, and most importantly, is the floating exchange rate as measured in U.S. dollars. The dollars decline has made foreign currencies more valuable; beats sitting in a U.S. money market.

Here's a short list of Currency ETFs, my favorites first…

FXE - CurrencyShares Euro Trust
FXY - CurrencyShares Japanese Yen Trust

and some others…

FXC - CurrencyShares Canadian Dollar Trust
FXA - CurrencyShares Australian Dollar Trust
FXB - CurrencyShares British Pound Trust

Proshares UltraShort Oil & Gas ETF

With oil hitting over $92 a barrel as I write this I find myself wanting a way to hedge my energy portfolio from the inevitable pull back, without selling off positions that have taken a lot of time to accumulate. Here's a solution...

DUG - Proshares UltraShort Oil & Gas ETF

Remember "Ultra" means that for every 1% loss in the oil and gas index, DUG will gain 2%, and vice-versa. I have not placed a trade yet, but I'm watching and ready. More on Proshares UltraShort ETFs.