[Chart courtesy of MarketWatch.com]
1. Moving the Markets
Today was a solid downward slide from yesterday’s gains on Wall Street, despite some good earnings reports from big players.
Inflation worries were spread all over news outlets today as we heard reports that April’s reading on consumer inflation (+0.4%) was the highest in three years. The move higher in inflation, due in large part to rising prices at the gas pump, is likely to heat up debate as to whether cost pressures are on the rise, a trend that could prod the U.S. Federal Reserve to raise interest rates at an earlier date than Wall Street now has priced in.
As I mentioned yesterday, this week is a big one for earnings reports and we heard some positive numbers from Home Depot (HD) today. The big home improvement retailer topped Wall Street estimates on both the top and bottom line and subsequently raised its full-year profit estimate. This somewhat suppressed fears sparked by weak retail earnings reports from Macy’s (M) and Nordstrom (NORD).
Still to come this week, is Target (TGT), Walmart (WMT), Gap (GPS) and FootLocker (FL) reporting later in the week.
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) reversed and headed south as the major indexes gave back about 1% today. The International TTI also took a dive and slipped deeper into bearish territory.
Here’s how we closed:
Domestic TTI: +0.85% (last close +1.37%)—Buy signal effective 4/4/2016
International TTI: -1.26% (last close -0.87%)—Sell signal effective 5/16/2016
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