Darkhorse........I am interested in the movement of the plot on the chart of Emerging Markets, your last post: Did it surge with all the metals because Emerging Markets are generally countries--or maybe the ETF is heavily weighted with countries-- that are extractor countries of metals from the ground ? I am interested because in my last post, Guppy's article included his statement: "The weakness in the U.S. Dollar will hurt export dependent economies [countries] and companies [located overseas that export]." which seems counter to the Emerging Markets chart.
In a risk on melt-up everything (mostly everything) goes up. Algos and permabulls shoot first and ask questions later as shorts are forced to blanket cover. Subtleties of intermarket relationships are often thrown out the window until later. There are also long term scenario recalibration factors that can temporarily lead to large moves, and simple concentrations of buying or selling power on one side of the market absent from the other. In short, intricately assessed fundamentals don't always drive things. It's possible to overthink it.
Defense / Aerospace stocks are vulnerable, considering upcoming Pentagon spending cuts. Today, Rockwell Collins (COL) issued disappointing EPS and revenue guidance. From the CEO: "...our company will take swift and appropriate actions to size our infrastructure to reduce costs..." The question is whether they can cut costs fast enough to make up for declining revenue...
A break of support for the transportation index would cast an ominous shadow on the post-QE3 euphoria. We're already participating via our short position in United Parcel Service (UPS) which is hitting new lows today...
Remember this from Sept 9 post (see quote above...the chart) ? (above quote omitted verbiage for brevity here.) Just for fun....look at the plots today, mid-session. (link below) http://www.elitetrader.com/vb/showthread.php?s=&threadid=134253&perpage=10&pagenumber=277
Numerous high quality shorting opportunities in this market... YUM just one example via http://www.mercenarytrader.com/2012/09/okay-ben-now-what/