[Chart courtesy of MarketWatch.com]
1. Moving the Markets
Markets are feeling warm and fuzzy after returning to familiar 2015 stomping ground of 18,000 for the Dow and 2,100 for the S&P 500.
As was to be expected, some analysts are now even predicting that the Dow could climb to 18,700 over the next year and a half, largely driven by Goldman Sachs (GS), Apple (AAPL) and UnitedHealth (UNH). Yep, with the total disconnect of the market levels to underlying economic fundamentals, I won’t hold my breath for that to happen.
Crude oil prices advanced today as well, following a drop in the previous session despite a failure by oil-producing nations to agree on limiting output at a weekend meeting in Qatar. Analysts say oil is starting to lose its grip on the stock market as focus shifts back to first-quarter earnings season.
This afternoon we heard another lay-off story but this one was massive with Intel announcing that it was dismissing 11% of its entire workforce, or 12,000 people. I am sure that main stream media (MSM) can spin this into a positive for the economic recovery while the computer driven algos might use this headline to push the indexes to all-time highs.
I am being facetious, of course, but ZeroHedge commented this way:
Confused? Don’t be: it’s all part of the new normal recovery, and don’t forget the spin: don’t think of it as 12,000 highly paid engineers and tech workers fired, think of it as 12,000 brand spanking new waiters and bartenders.
For quite some time, I have been curious to see if there was any correlation between the events of 2008 and what we are experiencing in 2016. Today I lucked out and found this interesting S&P chart, also courtesy of ZeroHedge:
Sure looks like there is some correlation going on, at least for the first quarter so it will be interesting to see how this year plays out. I will publish an updated chart as time goes on and whenever one becomes available.
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.
For hundreds of ETF/Mutual fund choices, be sure to reference Thursday’s StatSheet.
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 Domestic Trend Tracking Index (TTI) inched a tad higher, while the International TTI closed on the bullish side of its trend line for the first time since 8/21/15. As I mentioned yesterday, I want to see a clear piercing of the line accompanied by some staying power before declaring a new Buy signal for that area.
Here’s how we closed today:
Domestic TTI: +2.06% (last close +2.02%)—Buy signal effective 4/4/2016
International TTI: +0.90% (last close -0.02%)—Sell signal effective 8/21/2015
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.Contact Ulli