Weekly Review and ETF picks for Jan 31 2011 Week.

On Friday, after trapping the bulls with marketing going above 1300, the market reversed with earnings miss from Amazon and weak PC sales from Microsoft and then CNBC and all media blasting out Egypt news and causing unnecessary worries (Suez canal shutdown, inflation caused by QE2, Protest spreading to Saudi Arabia, Iran etc),

As we had pointed out on Jan 26, that market was a bit over extended and going between 1280 and 1300 levels.

Weekly ETF Returns

Due to markets dropping, I got stopped out of FAS and TYH positions and returns for these two days were -4.6%.

Currently only ETF that was positive is ERX / USO / USL.

Markets are in correction and we will have to see whether we enter the Bear territory or this is just a 5% correction that everyone is expecting.

Couple of charts below give you the view on why we call these market in correction

Unless market reverses and closes above 1300, I am not taking any positions. I might take some short positions but I dont suggest my readers to do that as Shorting is much more stressful than buying.

Some of the stocks of interest this upcoming week
PWER, MGIC, SIMG, PDO, AFOP, CWCO, MBFI, CLR, ARAY (looks the best) and HES