Matt McCall

International Opportunity You CANNOT Pass Up

Thu, 08 May 2008 20:09:00 GMT

THE FINAL NUMBERS

NEWS: The major indices were able to hold onto modest gains today after both testing negative territory and a mid-day rally. The Dow closed up 53 points or 0.4%. The S&P 500 gained 5 points or 0.4%. The NASDAQ had a solid day, adding 12 points or 0.5%.

THE BOTTOMLINE: The S&P 500 is sitting just below the important 1400 level and really close enough to consider it at the support/resistance area. As long as the index can hold in this area it proves nothing on the upside or downside. The next high volume move in either direction will be the first signal of the coming trend.

Looking at the PFG Breakout Scan at today’s close there were 141 stock/ETFs that made the cut and a few that caught my attention. A number of oil & gas stocks such as Chevron (symbol: CVX) and Canadian Natural Resources (symbol: CNQ) {we own CNQ for clients]. A few big-name steel stocks were on the list along with aluminum company Alcoa (symbol: AA). There were three indices on the list and they tell the story of where money has been made recently. The Dow Jones Steel, Coal, and Oil Equipment & Services Indices all hit new all-time highs today.

For more on PFG’s Portfolio Management services please call 1-877-ETF-PENN.

McCALL’S CALL - CONSUMER IN RECESSION?

NEWS: The Retail Sales for the month of April were released today and for the most part they were a mixed bag. Overall the numbers beat analyst’s estimates and were an improvement from March. The retail numbers go along with the theme we have been seeing recently for economic numbers - not good, but not bad, and most importantly, Improving.

THE BOTTOMLINE: If the consumer were in the midst of a recession as most want you to believe, than explain to me how the numbers improved over last month and are better than estimates? Sure I will hear a bevy of reasons why, from where consumers were shopping to the calendar versus last year. Maybe they are solid bearish arguments, but the bottomline is that the consumer is holding up well, which would not be the case if they were heading into a recession.

The retail stocks began the day strong, but faded as the market traded in a narrow range and gave up most of the gains by the time the closing bell rang. The Retail HOLDRS ETF (symbol: RTH) fell 1% on the day. Some of the winners included: Wal-Mart (symbol: WMT), Dollar Tree (symbol: DLTR), Limited Brands (symbol: LTD), and Ross Stores (symbol: ROST).

DAILY ETF BULLETIN - BIG GAINS OVERSEAS & NEW RECO

NEWS: The international ETFs were the big winners today with Russia leading the way. The Market Vectors Russia ETF (symbol: RSX) surged 4% to close within pennies of a new high. Russia is one of the 4 BRIC countries (along with Brazil, India, and China) and has been one of the best performing countries over the last few years.

THE BOTTOMLINE: Russia is a country that is rich in commodities, especially energy and metals. Over 36% of the ETF invests in the oil & gas sector, followed by 26% in steel & iron. With the commodities the place to be recently it is not wonder why RSX and Russia have been doing so well. RSX is a high risk play due to the political situation as well as the volatility in commodity prices. However, long-term the ETF is attractive on a pullback.

Today we decided to email a NEW ETF ALERT to all subscribers of The ETF Bulletin for a BUY RECOMMENDATION. The ETF invests in emerging market countries, but specifically in one region of the world. The ETF has been on our radar for a few weeks and today felt the opportunity was ripe and decided to put some money where our mouth is. As of today’s close it is not too late to buy the newest recommendation. If you have been pondering signing up for The ETF Bulletin - today is you LUCKY DAY!

I woke up in one of those moods today so I want to share with you a Special Offer that only comes around a couple of times per year. An annual subscription to The ETF Bulletin is normally $299, BUT for the next 48 hours the annual subscription will be $100 OFF - Only $199!

You must take advantage of this offer in the next 48 HOURS! Keep in mind you will receive a weekly 5-page newsletter as well as Real-Time Email Alerts to when we are buying and why! When you sign-up today you will receive a copy of the Email Alert that was sent a few hours ago. PLEASE go to www.etfbulletin.com to take advantage of the offer today or call 1-877-ETF-PENN.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

Two RSI Sell Signals TODAY!!

Wed, 07 May 2008 20:14:00 GMT

THE FINAL NUMBERS

NEWS: A mildly weak open turned into one of the worst days in weeks for the US stock market. The Dow finished the day lower by 207 points or 1.6%. The S&P 500 took a bigger hit, dropping 25 points or 1.8%. The NASDAQ tumbled 44 points or 1.8%. Oil closed at a new record high, finishing up $1.69 at $123.53/barrel. Gold fell $6.50 to $871.20/ounce after the US Dollar rose.

THE BOTTOMLINE: The market was due for a pullback, but I am not happy with the magnitude of today’s drop that took the S&P 500 back below the 1400 breakout level. I expect a quick snap back above 1400 by the end of the week if the bulls want to remain in control of this market. A failure to get back above 1400 on the S&P 500 is very negative in the short-term and will result in technical selling, especially in the financials. The financial sector was the major culprit of the late-day selling with the SPDRs Financial ETF (symbol: XLF) dropping 3.9% on the session.

For more on PFG’s Portfolio Management services please call 1-877-ETF-PENN.

McCALL’S CALL - FALSE BREAKOUT?

NEWS: One day after I was praising the breakout of the major indices, the S&P 500 fails to hold above 1400 and is in danger of more downside in the coming week.

THE BOTTOMLINE: Not only has the S&P 500 failed to hold above very important support, the index also triggered a sell signal on the RSI indicator. When the RSI falls out of overbought territory it triggers an RSI Crossover Sell Signal; this occurred today. At the same time the RSI created a Negative Divergence. When the S&P hits a new high, the RSI should follow with a higher high. When the price continues to increase as the RSI does not, it creates a divergence; in this case it is negative. The combination of the 2 RSI sell signals is concerning in the short-term and could lead to more downside on the index. I will look for support at the 1375-1380 area, approximately 1% below today’s closing price. The chart below gives you more insight into the 2 RSI sell signals.

DAILY ETF BULLETIN - THE DIFFERING WORLD OF ENERGY ETFs

NEWS: With oil topping $122 today, the energy sector has attracted investors with varying degrees of market knowledge. This can be dangerous because not all stocks are created equal and the same can be said for the energy ETFs.

THE BOTTOMLINE: The HOLDRS Oil Service ETF (symbol: OIH), PowerShares Energy Sector ETF (symbol: PXI), and PowerShares DB Energy ETF (symbol: DBE) all sound similar to me. So for the novice investor it may result them buying the energy ETF that happens to pop into their head first. When in actuality, the three energy ETFs could not be any farther from the same.

OIH is composed of a basket of energy stocks that deal with equipment, services, and drilling. PXI on the other hand has an array of energy stocks that include the major integrated companies as well as the refiners. The top then holdings of each ETF are nearly 100% different. The performance year-to-date also varies; OIH is up 7% and PXI has gained 13%. DBE has blown the doors off both ETFs, gaining 32% in 2008. So why has DBE done so much better than its competitors? For starters, they are not competitors. Both OIH and PXI invest in energy stocks and DBE invests in commodity futures. DBE is made up of futures contracts in crude, gasoline, heating oil, and natural gas. Investing in an energy stock and energy commodity is like night and day to the astute investor.

The point I am trying to convey to you is that ETFs can be great tools for the individual investor, however they can be dangerous in the wrong hands. Before considering putting your hard-earned money into any ETF please consult a professional.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

America in Recession & Breakout in Africa

Tue, 06 May 2008 19:58:00 GMT

THE FINAL NUMBERS

NEWS: Early morning losses turned into a strong day for Wall Street. The Dow closed the session up 55 points or 0.4%. The S&P 500 rallied 10 points or 0.8% and the NASDAQ also jumped 0.8% or 19 points. Gold and oil were also on the rise today.

THE BOTTOMLINE: After early weakness on an oil report by Goldman Sachs and dismal earnings from Fannie Mae (symbol: FNM), the market turned around to close higher. FNM, which reported a loss of over $2 billion last quarter, was down as much as $2 before reversing course to close up $2 for the session. A report from Goldman Sachs highlighting the possibility of $200 oil might have caused a chuckle on Wall Street in the past, but today it was taken on a serious note. Last year when Goldman wrote a similar report predicting oil could hit $100, most thought they were out of their minds and looked the other way. With oil hitting $122/barrel today, now who is laughing?

As the day went on the record oil price was forgotten and investors were willing to forget about the recession fears and continued to buy equities. The S&P 500 traded below the 1400 support level today before rallying back to close well off the low. The other indices joined in the late day surge that has now confirmed the breakout of last week and I am going on record of becoming more bullish. The short-term neutral stance has been shifted to bullish to join the intermediate-term and long-term views. I will look to put more of our Portfolio Management Clients’ cash to work in the coming days on pullbacks in individual stocks and ETFs.

For more on PFG’s Portfolio Management services please call 1-877-ETF-PENN.

McCALL’S CALL - WE ARE IN A RECESSION

NEWS: That is what most of Americans believe. According to a national study by CNN/Opinion Research Corp, 79% of the respondents believe the US economy is currently in a recession. In March the number was 74%, in February 66%, and 46% six months ago.

THE BOTTOMLINE: According to the official definition of a recession, the GDP must be negative for two consecutive quarters. With the first quarter preliminary number at 0.6% and the economy strengthening so far in the second quarter, it appears a recession is a wild dream of the bears. Sure I am one sided because I have been preaching for months that the US would not fall into a recession. However, it is irrelevant what I believe or the numbers say if the masses believe we are in a recession. What could happen is that the panic of the masses brought on by the media and the fact many Americans are naïve will result in a self-fulfilling prophecy. The numbers may not show a recession, but for most it will feel like a recession and therefore they will act as if it is a recession. The vacations may become less often and shorter, going out to dinner will not be as frequent, the new car purchase will be put off, etc. If this becomes reality due to the self-fulfilling prophecy, it could be a major issue that investors must recognize. I do not believe we are at the point of a self-fulfilling recession, but it does not mean it cannot happen this summer with gas and food prices expected to continue rising. From an investment opportunity viewpoint, I would look at commodity stocks and ETFs as a hedging strategy against such an event.

DAILY ETF BULLETIN - BREAKOUT IN AFRICA

NEWS: The two ETFs that have large exposure to Africa both broke out to new multi-month highs. The iShares South Africa ETF (symbol: EZA) and the SPDR S&P Emerging Middle East & Africa ETF (symbol: GAF) had solid a solid day, gaining over 2%.

THE BOTTOMLINE: EZA is trading just below the best level of 2008 and has been helped by strength in its top three holdings: Sasol (symbol: SSL), an energy play; MTN Group (symbol: MTNOY), a telecom stocks; Impala Platinum (symbol: IMPUY), the second largest platinum producer in the world. The top 10 holdings also include a couple of gold and financial stocks. From a technical perspective today was a buy signal and the fundamental story is also solid.

Despite the name, GAF is heavily weighted in South Africa (60% of the assets). Israel is second with 21%, followed by Egypt (7%) and Morocco (6%). MTN Group, Sasol, and Impala Platinum are in the top 5 holdings with the number one holding, Teva Pharmaceuticals (symbol: TEVA). TEVA is an Israeli generic drug maker with operations around the globe; the stock has done really well recently, but is my least favorite of the four. The advantage of GAF is that it does not put all of its eggs in one basket, but on the other hand EZA has solid core holdings. Both ETFs move in similar fashion and could be considered interchangeable.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

Follow Buffett into Korea

Mon, 05 May 2008 20:01:00 GMT

THE FINAL NUMBERS

NEWS: The breakdown of the merger between Microsoft (symbol: MSFT) Yahoo (symbol: YHOO) over the weekend and a surge in oil to $120 sent the markets lower to begin the week. The Dow closed off 88 points or 0.7%. The S&P 500 lost 6 points or 0.5%. The NASDAQ also lost 0.5% or 12 points.

THE BOTTOMLINE: After a two-day winning streak for the market and a rally that lasted five out of eight sessions, the market was due for a pullback. The rotation of money back into commodities and out of equities was also well overdue. Today’s action is not worrisome at all and to be honest with you, we had a fairly good day at PFG. Our commodity investments did well and helped pick up the slack of some of our losers.

The key this week will be the technical levels for me. As long as the S&P 500 can remain above 1400 on a closing basis, all is good. The index closed the session at 1407 today. The Dow just remain above 12,750, its support level - the index closed at 12,969 today.

McCALL’S CALL - FOLLOW BUFFETT INTO KOREA

NEWS: Over the weekend Warren Buffett and Berkshire Hathaway (symbol: BRKA) had their annual meeting in Omaha. There is always a laundry list of sound bites from Buffett throughout the weekend, but there was one that caught my attention. The Oracle of Omaha referred to South Korea as one of the best international investment opportunities.

THE BOTTOMLINE: Over the last few years Buffett has been moving his attention to overseas investments because that is where he feels the best opportunity lies. Over the years Buffett has focused on investing in businesses that he can understand and that have strong models that lead to future cash flows. But the key to his investment style is patience. He will wait for the opportune time to put money into an investment and once bought, give it time to grow.

The mention of South Korea is important because I have also been following the country for some time and also find it attractive. That being said, many of the South Korean stocks that trade on the US exchanges have had a rough time as of late. The iShares South Korea ETF (symbol: EWY) has struggled in 2008, but in the last two months has rallied and closed Friday at the best level since mid-January.

In this week’s issue of The ETF Bulletin (www.ETFBulletin.com) I discuss Buffett, South Korea, and specific ETFs and stocks that will give investors a gateway into the country. If you are not yet a subscriber please check out the website and consider changing your investment future!

DAILY ETF BULLETIN - COMMODITIES RALLY

NEWS: Last Friday I wrote about material and mining stocks sitting on support and ripe for a bounce -- well today they did just that. A spike in oil to a new all-time high and gold rallying from oversold levels sent money into the commodity ETFs. Oil closed with a gain of $3.65 to $119.97/barrel. The black gold traded above $120 intraday for the first time ever. Gold gained $16.10 to finish at $874.10/ounce.

THE BOTTOMLINE: A handful of ETFs that track the price of oil closed at new historic highs today. The Coal and Steel ETFs also finish at new highs as the commodity rally that so many have written off is back going strong. What makes me think there is more upside in the short-term for the commodities is the RSI readings. Most of the ETFs in the top 20 today have great charts, are either bouncing off support or at highs, AND the RSI readings are neutral. This suggests the ETFs are not yet overbought and therefore have more upside potential.

** There is a good chance we will look to add one of the ETFs in the commodities arena to a Portfolio in The ETF Bulletin newsletter in the coming days. All subscribers of the newsletter will receive a real-time email when the recommendation is revealed. To sign-up today for the weekly newsletter please go to www.etfbulletin.com.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

The Fed and a Lack of Recession

Wed, 30 Apr 2008 20:33:00 GMT

THE FINAL NUMBERS

NEWS: High volatility was expected because of the Fed meeting. When the closing bell rang the Dow was down 11 points or 0.1% after hitting a 3 1/2-month high of 13,010. The S&P 500 also fell, losing 5 points or 0.4% to close at 1385. The index once again failed to close above the resistance level of 1400 after hitting an intraday high of 1404. The NASDAQ took the biggest hit, falling 13 points or 0.6%. Just like its peers, the tech-heavy index hit a new 3-month intraday high before dropping. Gold finished the regular session down $11, but rallied back after the Fed announcement to hit the $880 level. Crude fell again, closing at $113.46/barrel, off $2.17.

THE BOTTOMLINE: It appeared the market was finally going to break out with all three indices hitting 3-month highs after the Fed announcement. But just as all good rallies after Fed meetings, the market did a 180 and closed the session in negative territory. The failure of the S&P 500 once again at the 1400 resistance level is troubling to me in the short-term. But, the longer the index consolidates below 1400, the more dramatic the rally will be when the breakout finally occurs. The question that is on everyone’s minds is, “when will the breakout occur”?

My best educated guess is that the market will break out sooner rather than later and investors should be preparing for a rally. There is still a small chance the market pulls back about 4% before that occurs, but if that is the case - there will be more stocks on sale. The strategy we implement here at PFG is a Macro-to-Micro approach that will look at the market as a whole before moving down to individual sectors, ETFs, and stocks. Right now our view is neutral on the overall market in the short-term, we are bullish in the long-term, and believe a diversified portfolio of equities based in the US and abroad mixed with commodities is the best approach for the average investor.

McCALL’S CALL - THOUGHTS ON THE FED MEETING & GDP

NEWS: The 2-day FOMC meeting resulted in a 25 basis point rate cut, sending the Fed Funds rate to 2.0%. The vote was 8-2 to cut rates by 0.25% and they also cut the discount rate by the same amount to 2.25%. The comments indicate that inflation risks have been rising, but they continue to see moderate inflation in the future. As far as growth, the Fed it to firm in the coming months, but did say the housing market and consumer have continued to weaken.

THE BOTTOMLINE: The thought of most pundits heading into the Fed decision was a 25 basis point cut followed by verbiage that would hint towards a pause in the rate cut cycle. We got the 25 cut, but from my perspective the comments did not lean towards an end to the cutting cycle and if anything left the door open for more at the next meeting in 8 weeks. The language in regards to inflation outside of the core increasing and that they believe it will moderate in the future suggests inflation will not hold them back from lowering rates to help the economy. This is why the market did not hold the immediate gains after the announcement was made and gold rallied. By cutting 25 BP the Fed made the right move and luckily for Bernanke he did not have to mention a pause because the 8 weeks before the next meeting is a built-in pause. By the time he has to make his next decision on interest rates the liquidity from the cuts should continue to increase along with the jolt to the economy from the stimulus package.

The preliminary GDP for the first quarter was released today before the opening bell and the economy grew at a pace of 0.6%, slightly better than estimates. Let me remind you what the definition of a RECESSION is -- two consecutive quarters of negative GDP growth. If it turns out the first quarter remains positive, that means the second and third quarters would have to be negative for an official RECESSION to occur. I have said it many times and will say it again - I DO NOT BELIEVE A RECESSION WILL OCCUR IN 2008!

The economy is beginning to recover and with the stimulus package hitting in the second quarter, it will lead to more growth in the US. There is also the weak US Dollar (I discussed this yesterday) that will encourage foreigners to spend money on US goods and services.

DAILY ETF BULLETIN - PLAYING THE SOLAR STOCKS

NEWS: First Solar (symbol: FSLR), the most widely traded solar stock in the US reported blowout earnings that sent the stock up over $10 and within a few ticks of a new all-time high today. FSLR is a component of a number of alternative energy ETFs, but until last week there was no ETF available that concentrated solely on solar stocks. The Market Vectors Solar Energy ETF (symbol: KWT) was introduced last week and is traded on the AMEX.

THE BOTTOMLINE: When it comes to alternative energy stocks I am wishy-washy because part of me believes in the move towards solar, wind, nuclear, etc. That being said, many of the companies in the arena are not making money and may never move to positive cash flow. So instead of trying to pick the couple of stocks that will be the winners, investors can now invest in a basket (27 to be exact in KWT) of solar stocks and ride the craze of the entire sector.

The biggest holdings are FSLR, Q-Cells (traded overseas), Renewable Energy Corp (traded overseas), Solarworld (traded overseas), Suntech Power (symbol: STP), and JA Solar (symbol: JASO). Simply look at the charts of FSLR and JASO versus STP. FSLR and JASO are near highs and STP has another 50% to go to get back to its January high. This is why an ETF that invests in a basket is the better choice for investors. I hate to say it, but most individual investors will struggle to pick the winners of the group and in the end lag the ETF.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

The Irish Economy and Credit Cards

Tue, 29 Apr 2008 20:08:00 GMT

THE FINAL NUMBERS

NEWS: After a mostly negative day, the major indices moved into positive territory for a brief time in the afternoon hours. When the closing bell rang the Dow was down 39 points or 0.3%. The S&P 500 was off 5 points or 0.4% and the NASDAQ held onto a small gain of 1 point. Gold and oil both took beatings today as investors continued exiting commodities.

THE BOTTOMLINE: Today the trading range remained narrow as investors await the Fed’s decision on interest rates tomorrow afternoon. The consensus is looking for a 25 basis point rate cut down to 2.0% on the Fed Funds rate. Any number other than .25% will be a major surprise to the market. The other surprise could be in the comments that are released with the rate decision. The Fed will likely comment on its strategy for future meetings and analysts will read into every word to try and decipher if tomorrow’s meeting will mark the last in a string of rate cuts. Or will there be more rate cuts to come in the months ahead? I personally want to see if the Fed’s view on inflation has changed as the prices of food and energy continue to rise. Tomorrow I will have a complete recap of the Fed’s decision.

The Dow has broken above the 12,750 resistance level and retested the now support level several times and for the most part has held. The S&P 500 has struggled to get above its similar resistance level of 1400 and has failed the last few days. The failure to breakout once again at an old resistance level is concerning, but so is the RSI indicator. Not only is the RSI very overbought, it is also beginning to turn lower, which is often the signal of a short-term top. The combination of an RSI beginning to turn south with the S&P 500 failing at price resistance has kept my view on the overall short-term market at neutral. That being said one big volume day that sends the S&P 500 through 1400 on a close could change my view quickly.

McCALL’S CALL - THOUGHTS FROM IRELAND

NEWS: This past week I was out of the office on Thursday and Friday because I took a long weekend and hopped the 6-hour flight to Ireland. The trip was a holiday, but because I love what I do and am always looking for insight, I came away with a few thoughts on the global economy.

THE BOTTOMLINE: First of all, it amazes me how many people drink Guinness beer. One-half of all Guinness brewed remains on the island of Ireland! (Yes, I took the Guinness tour.) Even though drinking is a national pastime, the country continues to grow much faster than the US. GDP in 2007 grew at 4.7% and according to the Economist GDP should see an increase of 2.4% in 2008. Over the next four years the GDP is expected to grow between 2.6% and 3.9%. As you know, here in the US we are fighting to keep our GDP above zero.

The housing market was just as hot in Dublin and surrounding areas as it was in the US. Speaking with several locals at the pubs I came to find out it is near impossible for the average person to buy a nice place in downtown Dublin. I would compare the prices to the range of Chicago if I had to choose a US city I know well. The housing downturn and credit crisis in the US has not taken about the Irish economy as it did here in the US, but there has been an affect. Housing prices have fallen over the last six months and for the first time in 4 years, retail sales fell. So has Ireland caught the cold from the US? I would say yes and no. I would be crazy if I believed the US does not have an affect on the rest of the world. But, I believe countries such as Ireland will not be overly punished for the mistakes made by large financial institutions in the US. What I do believe is hurting Ireland is the weak US Dollar and strong Euro. My pint of Guinness was 5 Euros and that did not sound bad - but in reality it was costing me $8 US Dollars. So if you assumed I spent 4 days in Ireland and drank 10 Guinness per day, that would be a difference of $120 US Dollars. Throw in dinners and hotel rooms and suddenly it is very expensive for Americans to travel to Ireland or anywhere the Euro is the currency.

However, flip that in the other direction and the US companies that cater to foreign consumers should be benefiting the most. The Guinness that costs $5 in New York is only 3.2 Euros for the Irish visitor on holiday. The $250/night hotel room is a mere 160 Euros. You get the point. Look for the weak US Dollar to continue boosting our economy and keeping the US from recession. That is right -- the WEAK US DOLLAR WILL KEEP AMERICA FROM RECESSION.

EARNINGS CENTRAL - VISA AND MASTERCARD?

NEWS: MasterCard (symbol: MA) blew earnings out of the water today and the stock finished the day up 12.7% and closed at a new all-time high of $273.34. Visa (symbol: V) announced first quarter earnings after the bell last night and beat estimates, but it was not good enough for investors as the stock fell about 10% in after hours trading. After being down almost $5 in early trading today, the stock followed MA’s lead and closed the day up 7% at $80.88.

THE BOTTOMLINE: Two new all-time highs for the two largest credit card companies in the world. Visa is clearly the leader with approximately 50% of all transactions around the globe. With little competition outside of American Express (symbol: AXP), the future looks good for the two credit card processors. I personally rarely carry cash and if I do it is for tipping drivers or somewhere that does not take credit cards. In Ireland this weekend we used Visa for nearly every purchase because it gave us a better exchange rate and it kept track of the amount of Guinness being drank. But seriously, every pub and little we went into accepted Visa and MasterCard.

The younger generation is even more fixated on plastic and using it as a way to pay for everything through either credit or debit. In the future the use of paper money will continue to decrease and the biggest beneficiaries are MA and V. Add in the exposure the companies have to the global economies and they become even more attractive. Here in the US consumers are looking forward to their stimulus checks and because we always want more than we can afford, the $600 rebate will result in a $1200 purchase. Who will pay the $600 difference - likely V or MA.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

What's Next for Oil?

Mon, 21 Apr 2008 20:16:00 GMT

THE FINAL NUMBERS

NEWS: The indices closed mixed with the Dow closing down 24 points or 0.2%. The S&P 500 lost 2 points or 0.2%. The NASDAQ held onto a gain of 5 points or 0.2%. Crude closed at a new all-time high and gold gained $2.40 to close at $917.60/ounce.

THE BOTTOMLINE: The Dow held above the breakout level of 12,750 with a close of 12,825. What really impressed me was the pullback to 12,751 intraday before the index rallied to close 75 points off the low. If the action for the remainder of the week continues you can expect the S&P 500 to be the next index to breakout and confirm our next uptrend. BUT, if the Dow fails to hold 12,750 and the S&P cannot break above 1400 the tables will be turned in favor of the bears. If I had to make an educated guess I would go with the bulls in the next few weeks, but in reality I will wait for the market to tell me if the breakout is true or false.

McCALL’S CALL - WHAT’S NEXT FOR OIL $100 OR $125?

NEWS: The price of oil closed at yet another record high today after gaining 79 cents to $117.48/barrel. The price gasoline also hit a new record high.

THE BOTTOMLINE: With oil less than $8 from the $125 level it is tough not to predict $125 before oil hits $100. The momentum right now is so strong that it could hit $125 in a few days. That being said, if the short-term bubble burst the price of crude could fall sharp and quick, back to the century mark. Instead of trying to be “right” in the prediction game, I will concentrate on making you money instead. If oil rises to $125 I would either sell or place a tight stop-loss on any oil-related investments. On the other hand, if oil pulls back to the $100 area I would be a buyer of oil commodity ETFs and likely oil stocks. The long-term supply/demand curve favors higher prices in the years to come and you want to have exposure to the sector in your portfolio through either ETFs or stocks.

THE DAILY ETF BULLETIN - STRENGTH IN ASIA

NEWS: The last week a number of Asian ETFs have broken out to new multi-week highs and the charts are beginning to look attractive. The ETFs I am talking about are made up of stocks from a number of Asian countries and they are not single-country ETFs. The diversity allows for lower risk and the reward recently has been great.

THE BOTTOMLINE: In today’s top 25 list a number of Asian ETFs showed up and several were hitting new multi-month highs. Countries such as Taiwan and Singapore have shown great relative strength recently and are a great way to play both the international and technology themes. For example, the iShares Singapore ETF (symbol: EWS) is trading at the best close of 2008 and recently triggered a buy signal when it broke out of a Bullish “W” pattern. Even though EWS is strong, I prefer the Asian ETF that will offer exposure to Singapore and a host of other countries in the region. In this week’s issue of The ETF Bulletin I highlight our “FAVORITE” Asian ETF!

For more information on The ETF Bulletin please go to www.ETFBulletin.com.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

Dow Breaks Out as China Hits New Low

Fri, 18 Apr 2008 19:58:00 GMT

BULLS & BEARS THIS WEEK!

Catch Matt McCall this weekend on Fox New Channel’s “Bulls & Bears”. Matt joins the regular crew to discuss the stock market and individual stocks. This week the show will air at 2pm ET due to the Pope’s visit. Make sure to set you DVR’s for one of the most watched shows on cable news.

THE FINAL NUMBERS

NEWS: More solid earnings news from the likes of Google (symbol: GOOG), Caterpillar (symbol: CAT), Schlumberger (symbol: SLB), and Citigroup (symbol: C). The Dow finished higher by 230 points or 1.8%. The S&P 500 also gained 1.8% or 25 points. The NASDAQ surged with a gain of 61 points or 2.6%.

THE BOTTOMLINE: The big news is that earnings continue to roll out better than expected from all sectors, even the financials. The HUGE news is that the Dow was able to break above very important resistance at 12,750. For weeks I have been pounding the table about the 12,750 level on the Dow and 1400 on the S&P 500. I will stick to my original thought that a breakout above these resistance levels will swing my bias from neutral to bullish. Ideally there needs to be some confirmation of the breakout (at least two more days closing above 12,750).

Today’s rally off the news of Google last night and Citi this morning spurred a huge short rally that sent the Dow above the 12,750 level. Once 12,750 was broken another group of shorts began covering and thus a huge day for stocks. It is clear the bulls now have the upper hand and as long as earnings season proves to be at least average and we avoid any major negative announcements, the stock market should continue this rally.

WHAT TO DO NOW? What investors need to do now is begin looking to continuing the buying spree on all pullbacks into top-rated stocks and ETFs. Also, if you have any hedges on your portfolio, look to exit them in the coming week. Finally, the positions that are clearly laggards should be sold to raise cash for better opportunities.

McCALL’S CALL - CHINA FALLS TO NEW 52-WEEK LOW

NEWS: The Shanghai Index fell 4% to 3094, its lowest close since March 2007. The index is now off 49% from the high it set on 10/16/2007.

THE BOTTOMLINE: Growth remains high in China and so does inflation as prices skyrocket. The concern about a US slowdown spreading through the world and affecting the high growth countries like China has hit a boiling point. In the past the Chinese stocks were able to shrug off worries around the globe due to the high future growth potential. That same growth is now being questioned? In my mind the growth will continue at a torrid pace, but will the stocks demand a high multiple based on growth or will they come back down to earth?

The problem with the valuation question is that many Chinese stocks trade at average multiples. For example, China Mobile (symbol: CHL) has a P/E ratio of 28; Vodafone (symbol: VOD), based in the UK has a similar P/E ratio. The major difference is that CHL is growing twice as fast as VOD. So based on fundamentals CHL is cheap when compared to another wireless telecom company.

The point I am trying to make is that China may not be the best emerging market to be in right now, but it does not mean you should forget about the country all together. Investors can hold off on big investments in the country for now or hold onto what they have because the China story is not a 6-month or 2-year story, it is a long-term phenomenon that will change the world.

THE DAILY ETF BULLETIN - FINANCIAL BOTTOM?

NEWS: The financial ETFs rally on the better-than-expected earnings from Citigroup. Is this the bottom for the beaten down financials or is there more to come?

THE BOTTOMLINE: The news over the past week from the financial companies has not been good, but it is much better than it could have been. As I have said several times this year, the market has priced in a recession and the worst-case scenario. I believe the Bear Stearns debacle was the worst case scenario and that a recession “by definition” will not come. Therefore the financials should be good buys at current levels?

Yes and no. For the long-term investor that is willing to try and pick a bottom there are some opportunities in the financial ETFs. BUT, you must be aware that the possibility of another major write-down could spur on heavy selling in the sector. Buying a financial ETF today would not be your normal investment, but rather one in which buy and look at in five years. The better way to play a financial rally is the related ETFs because if the financial stocks rally it will spark a market-wide rally.

Have a great weekend,

Matt McCall

www.pennfinancialgroup.com

Google's Numbers

Fri, 18 Apr 2008 12:32:00 GMT

THE FINAL NUMBERS

NEWS: Market closed out the session mixed and not far from yesterday’s end of day prices. The Dow gained 1 point, the S&P 500 added less than 1 point, and the NASDAQ lost 8 points or 0.4%. Oil hit a new intraday high before pulling back to close the session down 7 cents at $114.93. Gold also gave back early gains to close down $5.40 at $942.90/ounce. Both were hurt by a rise in the US Dollar versus foreign currencies.

THE BOTTOMLINE: After a big up day it is promising to see the market hold steady and not give back any of the gains. The market internals continue to improve the longer the indices hold above the March lows and the bears are disappearing daily. The dagger to the bears will be a breakout above resistance for the major indices. The number to watch on the Dow is 12,750 and 1400 on the S&P 500. Until the breakouts occur I would suggest you be a selective buyer of stocks that have been on your Watchlist. Do not jump into this market head first because there is still the chance of another Bear Stearns situation that could have the indices retesting the March lows if not worse. The probability of that happening is not high, but there is that chance we must factor into our asset allocation.

We have been picking up shares of stocks and ETFs for our Portfolio Management Clients over the last few weeks when opportunities arise. We have been fortunate to pick a few big winners and will continue to put money to work when the long-term opportunities are presented. This type of market environment is when investors make money because they are buying quality stocks at bargain prices.

McCALL’S CALL - VALUING GOOGLE

NEWS: For all the doubters of Google (symbol: GOOG), tonight will not be a good one at the dinner table. The internet search company blew earnings estimates out of the water after the bell and shot up 50 points immediately.

THE BOTTOMLINE: My view on Google has been mixed recently, with my bearish side saying the story is over and it is time to find the next big winner. On the other hand, the little bulls in my head would argue the company is still growing and based on valuations is a bargain at current levels. What it comes down to is if Google can continue to grow earnings at a solid pace?

If they can continue to grow well above the market average it will result in a high valuation put on the stock. Investors do not care about a high P/E ratio as long as the company has high growth numbers. Basically the investors are paying more for future growth, which makes complete sense. If you currently use P/E ratios in your investment plan, there is similar formula you should consider. The PEG ratio takes the P/E and divides it by the annual growth rate. For example, according to Yahoo Finance, Google’s trailing P/E ratio is 34 and its PEG ratio is 0.8. That means the growth rate is higher than the P/E ratio, resulting in a number below 1.0, which is very attractive. Exelon (symbol: EXC) is a utility company that hit a new all-time high today with a P/E ratio of 21. But, its PEG ratio is 2.1. When comparing P/E ratios it is unfair for companies that are growing and are priced at a premium. When comparing an apple against an orange, try utilizing the PEG ratio.

Have a great night,

Matt McCall

www.pennfinancialgroup.com

Major Oil Breakout Signal

Mon, 03 Mar 2008 22:12:00 GMT

THE FINAL NUMBERS

NEWS: During the final hour of trading the Dow wiped out a 99-point loss to close with a modest loss. The industrials finished with a loss of 7 points at 12,258. The S&P 500 eked out a minimal gain of less than one point after being down as much as 10 points. The NASDAQ was the weak link, falling 12 points or 0.6% on the day.

THE BOTTOMLINE: A vey muted group of closing numbers today is overshadowed by the rally off the late session lows, a signal buyers were picking up some “value” plays in the final hour of trading. There are two key support levels you must watch this week on the S&P 500; 1310 is the closing low of 2008, set on 1/22 and 1270 is the intraday low, set the following day. The mid-afternoon sell-off brought the index to within 10 points of the first support level before it was able to bounce and finish at 1331. I expect the index to hold the lows this week as more consolidation occurs with the bottom at 1310 and top at 1385.

THE DAILY ETF BULLETIN

NEWS: As the Who once sang, “Meet the new boss, same as the old boss”. That was the theme in the world of ETFs once again today, as the commodity ETFs remain the big boss of the market. Agriculture was the name of the game today, followed by metals, and energy.

THE BOTTOMLINE: The question I have been fielding more than anything else recently has to do with commodities and how high they can go. Investors are more concerned about the rally in commodities, than they are with the stumbling equities market. This is scary and yet intriguing.

The average investor has so many more opportunities in 2008 than they did only 12 months ago. If a client came to me and wanted exposure to the wheat futures or wanted to play the rising price of aluminum, I had to turn them away or have them open a futures account. With the introduction of over 20 commodity-related ETFs and ETNs, it has made it as easy as $9 to buy exposure to the futures market. I do believe in the long-term story of most commodities, but in the short-term there is an issue with the parabolic rally. A short-term pullback is due, and at that time patient investors can begin buying commodities again.

FYI – Look for GOLD to hit $1000/ounce tomorrow!

OIL BREAKOUT – THE REAL DEAL?

NEWS: The price of oil hit $100 earlier this year only to fail and pullback 15% before it began its next attempt at the century mark. Last week for the first time ever the price of crude closed above $100 for consecutive days. This is not only a psychological milestone, but also an important technical signal.

THE BOTTOMLINE: The chart below shows the breakout of crude on the weekly chart. The pattern it formed is one of the most accurate breakout signals in our repertoire – the Bullish “W” Pattern. After falling short of $100 in November, the price of pulled back to $85. The next rally had the black gold hitting $100 in early January, only to fail once again and another pullback to $85 occurred. The most recent attempt at $100 was successful and this time the breakout appears to be the “real deal”.

The first step in a breakout is actually breaking out, which crude did last week with a close above $100. The second step is the confirmation phase; this typically consists of a week or so of closes above the breakout point, in this instance $100/barrel. So far so good. The price of crude hit a new record today, rising $2.11 to close at $103.95/barrel. The third step would be a retest of the breakout level; this would be the high reward-to-risk entry point.

Side note: the close today marked the highest close ever based on an inflation-adjusted price. The old high was $103.74, and that was surpassed for the first time ever and now we can honestly say, oil is at an all-time high.