Stocks Drop Before The New Year As Investors Secure 2014 Profits

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of]

1. Moving the Markets

Stocks pulled back from record highs today as both the S&P 500 and Dow closed lower. Utilities, which have been 2014’s best performing sector, led the decline with a drop of 2.1%.

Perhaps investors are closing out a profitable year, given the fact that the Dow edged above 18,000 and the S&P 500 hit record closes more than 30 times. With one more trading day left in 2014, the S&P 500 is up 12.6% for the year, or up 15.4%, including dividends. That gain is almost double what stock market strategists expected at the beginning of the year.

Contradictory to falling stock prices, oil prices recovered slightly today as the benchmark U.S. crude rose 51 cents to settle at $54.12 a barrel in New York. This price point, as you may well know, is still one of the lowest we’ve seen in the past few years.

In the latest news on the economy, we heard today that consumer confidence numbers for December came in slightly less than expected, while U.S. single-family home price appreciation slowed less than was forecast in October.

Let’s stay poised to see what happens in the last day of trading for 2014!

All of our 10 ETFs in the Spotlight slipped as the major indexes slid into the close.

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.

Here are the 10 candidates:


The above table simply demonstrates the magnitude with which some of the ETFs are fluctuating in regards to their positions above or below their respective individual trend lines (%M/A). A break below, represented by a negative number, shows weakness, while a break above, represented by a positive percentage, shows strength.

Year to date, here’s how the above candidates have fared so far:


Again, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point has been taken out in the “Off High” column.

3. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) slipped with the indexes and closed as follows:

Domestic TTI: +3.15% (last close +3.45%)—Buy signal since 10/22/2014

International TTI: +0.07% (last close +0.43%)—New Sell signal effective 12/15/14

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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