ETFs On The Cutline – Updated Through 06/14/2024

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (266 vs. 262 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For June 14, 2024

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

TECH TITANS TUSSLE FOR TOP SPOT AMIDST MARKET MELT-UP AND MAIN STREET MALAISE

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

Stocks fell right after the opening, as a decline in consumer sentiment gave the bears a reason to cheer. However, the S&P 500 ended only marginally lower but gained for the week.

The Michigan survey of consumers confirmed that the consumer is stressed, with the sentiment declining to 65.6 in June, which represents a sharp drop from April’s number of 69.1. Worse yet, estimates were in the 71.5 range, a huge miss.

This clearly shows the disconnect between Wall Street and Main Street and dampened enthusiasm about better-than-expected CPI and PPI figures from earlier in the week. Hope of a continued cooling of inflation were the main contributors to the S&P’s and Nasdaq’s advances.

As we know, all market action has been centered around tech and its seemingly never-ending melt-up, which ZH so aptly displayed in this graphic version. The Big Three, Nvidia, Apple and Microsoft, have been taking turns and swapping their position as the #1 tech company in the world. How long can traders play this game of musical chairs, before the reality sets in that this is all one gigantic bubble?

In the meantime, the broad market, as represented by the equal weight S&P index, has gone nowhere since late February. It shows the one-sidedness of the current rally, a theme that is not conducive to long-term gains.

Bond yields slipped a tad with the 10-year now at its lowest level since early May. Gold and Silver closed at session highs, but cryptos were clobbered for no apparent reason.

It was a week with wild swings, but the S&P 500 and the Nasdaq managed to eke out another win and kept bullish sentiment going.

The question is “for how long?”

After all, cracks in the economy are appearing in many places and, if the Fed eventually caves in and cuts rates, it will be over for the bullish crowd.

Why?

Because the reason for the cut will not be that inflation has been conquered, it will be that the economy is in total shambles, which will be a nail in the coffin of equities.

Read More

Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 06/13/2024

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, June 13, 2024

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— since 11/21/2023

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +6.32% and is in “Buy” mode as posted.

Read More

Inflation Eases, Equities Rally: Dow Recovers While Jobless Claims Hit 10-Month Peak

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The major indexes wavered with the Dow being the weakling of the day, despite more inflation data showing better-than-expected results.

May’s Producer Price Index (PPI), which was anticipated to rise 0.1%, came in lower by 0.2% from the month of April. That sort of confirms the Fed’s view yesterday that “progress has been made on the inflation front.”

Traders are now convinced that the CPI and the PPI have eliminated the always-present possibility of an interest hike, at least for the time being. That should help equities to grind higher and create the summer rally.

The Dow managed to wipe out most of its early morning losses, while the S&P 500 and Nasdaq knee-jerked and then rebounded to close at new record highs. However, breadth was deplorable and diverged from price action.

Initial jobless claims surged to 10-month highs, as joblessness soared with California leading the pack. First time applications rose to 242k, much above expectations of 225k and higher from last week’s 229k reading. Continuing claims also headed back above 1.8 million Americans, which was the highest level since January.

The most shorted stocks continued their decline, bond yields dipped, and the 10-year closed at three-months lows, as ZH pointed out. The dollar edged higher, while Bitcoin retraced yesterday’s gains.  

Oil prices zig-zagged but were not able to recapture their $78 level, as gold followed Bitcoins path by giving up yesterday’s advance.

That leaves us with another alligator snout, which prompted ZH to ask:

Which trades first—S&P down to 5,000 or the 10-year yield down to 3.5%?

Read More

Market Roller Coaster: CPI Stability Spurs Rally, Powell’s Caution Curbs Rate-Cut Fever

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The latest CPI report sent stocks higher and bond yields lower, as the index was unchanged for May vs. an expected 0.1% monthly rise. Year-over-year, the increase was 3.3%, which was also lower than the anticipated 3.4%.

Even the Fed’s favorite gauge, the core CPI, which excludes volatile components like energy and food, was in line with expectations. As a result, the 10-year yield dove some 14 bps to below 4.3% but gave some of it back late in the session.

As projected, the Fed kept interest rates unchanged, while indicating an improvement on the inflation front:

“In recent months, there has been modest further progress toward the Committee’s 2 percent inflation objective.”

However, these encouraging words were offset by remarks that the central bank only sees one rate cut taking place this year, which is quite a turnaround from the expected three at the beginning of 2024.

Here are some other clarifying comments, courtesy of ZH:

  • POWELL: FED PROJECTIONS AREN’T A PLAN, THEY CAN ADJUST
  • POWELL: WE ARE PRACTICING A SLIGHT ELEMENT OF CONSERVATISM ON OUR INFLATION OUTLOOK
  • POWELL: WE’RE ASSUMING GOOD BUT NOT GREAT INFLATION NUMBERS
  • POWELL: WE WELCOME TODAY’S INFLATION READING, HOPE FOR MORE

Rate-cut expectations soared after the CPI release, but Powell’s commentary pulled them back down to reality.

The major indexes followed a similar pattern, with the Dow not being able to maintain its upward momentum, as bond yields dropped sharply at first but rebounded into the close. The dollar ended the day lower but managed to cut its early losses late in the session.

Bitcoin rode the roller coaster and surrendered most of its early advances, with gold following suit but ending with modest gains. Crude oil pumped, dumped, and pumped again to assure a green close.

Hard data points are diverging from the S&P’s relentless move higher. Which way will this alligator snout snap shut?   

Read More

Investors Eye CPI Reading And Fed’s Rate Verdict Amidst Tech Stock Surge

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The major indexes started the session in the red, with only the S&P and Nasdaq being able to climb out of that early hole and close in the green, as buying picked up late in the session.

The Fed started its 2-day meeting on interest rates today with the verdict being announced Wednesday after 11 am PST. Traders are concerned that any rate reductions may not occur, but they will analyze every word of Powell’s press conference to find something positive to prop up bullish sentiment and keep the rally going.

Last week’s strong jobs numbers decreased the chances of an imminent rate cut, and traders now are expecting or hoping for the first cut in November. To me, it looks that the Fed will continue its “higher for longer” theme and not cave to the market’s wishes. That caused a jump in 2025 rate-cut expectations but not much change in 2024.

Adding more uncertainty will be May’s CPI reading, scheduled for release prior to the Fed’s announcement.  

Apple Computers saw a huge surge, with the company now overtaking Nvidia as the second largest market cap company. The MAG 7 stocks stayed their course and rallied.

Bond yields pulled back after the recent rally, the dollar rode the range, while Bitcoin surrendered yesterday’s reach for $70k but bounce off its $66k support level.

Gold staggered higher for the second day, and oil prices advanced but fell short of reaching the $78 level.

Tomorrow’s CPI and the Fed’s decision on rates will have an impact on market direction, the question is “will it be up or down?”

Read More