1. Moving The Markets
U.S. stocks were flat on Tuesday, with investors reluctant to make big bets before results of the latest Federal Reserve policy-setting meeting, which could give some clarity as to when the central bank will begin trimming its stimulus. The CBOE Volatility index VIX, a measure of investor anxiety, dipped 0.9 percent. Earlier, it rose 2.3 percent to its highest level since mid-October.
Major corporate news today centered on Facebook, 3M, Boeing and AT&T. The Wall Street Journal reported that Facebook will begin selling video ads later this week, which could raise the eyebrows of investors. AT&T said it would sell its wireline operations in Connecticut to Frontier Communications (FTR.O) for $2 billion in cash, partly to fund the expansion of its 4G network.
In the ETF world today, notable attention was paid to insiders buying in to the First Trust ISE-Revere Natural Gas Index Fund (FCG). Magnum Hunter Resources Corp (MHR), which makes up 4.54% of FCG, has seen 3 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The ETF holds a total of $21,701,338 worth of MHR, making it the #3 largest holding of Magnum.
Our ETFs in the Spotlight slipped with the indexes but remain on the bullish side of their respective trend lines:
2. ETFs in the Spotlight
In case you missed the announcement and description of this section, you can read it here again.
It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.
In other words, none of them ever triggered their 7.5% sell stop level during this time period, which included a variety of severe market pullbacks but no move into outright bear market territory.
Here are the 10 candidates:
All of them are in “buy” mode meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).
Now let’s look at the MaxDD% column and review the ETF with the lowest drawdown as an example. As you can see, that would be XLY with the lowest MaxDD% number of -5.73%, which occurred on 11/15/2012.
The recent sell off in the month of June did not affect XLY at all as its “worst” MaxDD% of -5.73% still stands since the November 2012 sell off.
A quick glance at the last column showing the date of occurrences confirms that five of these ETFs had their worst drawdown in November 2012, while the other five were affected by the June 2013 swoon, however, none of them dipped below their -7.5% sell stop.
Year to date, here’s how the above candidates have fared so far:
3. Domestic Trend Tracking Indexes (TTIs)
Trend wise, our Trend Tracking Indexes (TTIs) reversed from last week’s sell off and headed further into bullish territory:
Domestic TTI: +3.51% (last close +3.59%)
International TTI: +4.40% (last close +5.03%)
Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.
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