Daily “Ways-to-Play” The News Before the Moves 2/18/2010

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More Americans Considering Community Banks

Bailouts and bonuses have many Americans frustrated with big banks. Some consumers think these giant institutions have lost touch with customers and basic good business practices. They’re so fed up that they’re holding these behemoths accountable by moving their money to community banks.
Check out how others are using ETFs to capitalize on this news or add your own opinion

Soros More Than Doubled Gold ETF Stake in 4th Quarter

Feb. 17 (Bloomberg) — Billionaire George Soros’s Soros Fund Management LLC more than doubled its holding in the biggest gold exchange-traded fund in the fourth quarter after bullion advanced 8.9 percent to a record.

buy streetTRACKS Gold Trust (GLD);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Contango Can Kill Commodity ETF returns: ETFDESK Provides Alternatives

Contango is a phenomenon in the futures market where, in simple terms, the price to deliver a commodity in the future is higher than the spot price, or far future delivery is higher than shorter future delivery. It is exemplified by a upward slowing forward curve. The issue is magnified in future funds like USO, where contracts need to “rolled” into more expensive future contracts.

buy Oil Services HOLDRS (OIH)

sell United States Oil Fund LP (USO)

buy First Trust ISE-Revere Natural Gas Index Fund (FCG)

sell United States Natural Gas Fund, LP (UNG);

Check out how others are using ETFs to capitalize on this news or add your own opinion

A Mechanical Approach to Merger Arbitrage

Merger arbitrage is a popular hedge fund strategy that can generate attractive risk-adjusted returns with low correlation to equity markets. Typically, merger arbitrage funds (both hedge funds and mutual funds) use fundamental analysis to select the deals in which they participate. Our research shows that the universe of target companies creates positive excess returns relative to the equity markets and that owning a broad cross section of deals exposes the portfolio to the positi

buy IQ ARB Merger Arbitrage ETF (MNA);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Muni Threat: Cities Weigh Chapter 9

The economic slump, however, is forcing debt-laden cities, towns and smaller taxing districts throughout the U.S. to consider using Chapter 9. As their revenue declines faster than expenses, some public entities are scrambling to keep making payments on municipal bonds. And that is causing experts to worry about the safety of securities traditionally considered low risk.

sell iShares S&P National Municipal Bond Fund (MUB);

Check out how others are using ETFs to capitalize on this news or add your own opinion

Small Reactors Generate Big Hopes

A new type of nuclear reactor—smaller than a rail car and one tenth the cost of a big plant—is emerging as a contender to reshape the nation’s resurgent nuclear power industry. Three big utilities, Tennessee Valley Authority, First Energy Corp. and Oglethorpe Power Corp., on Wednesday signed an agreement with McDermott International Inc.’s Babcock & Wilcox subsidiary, committing to get the new reactor approved for commercial use in the U.S.

buy iShares S&P Global Nuclear Energy Index Fund (NUCL);

Check out how others are using ETFs to capitalize on this news or add your own opinion

HHS Warns of Double-Digit Increase in Health Premiums

Proposed premium increases by Anthem Blue Cross for Californians purchasing their own coverage set off a wave of criticism and forced the company last week to announce a postponement. Now, the Health and Human Services Department says similar pressure on premiums is being felt in at least six other states.

buy iShares Dow Jones U.S. Healthcare Providers Index Fund (IHF);

Check out how others are using ETFs to capitalize on this news or add your own opinion

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