ETF Tracker Newsletter For October 14, 2016

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Market Commentary


[Chart courtesy of]

1. Moving the Markets

The day started on a positive with the major indexes bouncing higher by some 0.75% supported by stronger than expected results in the financial arena. However, economic data points were negative across the board ranging from rising producer prices (the most since 2014), retail sales growth slumping to its weakest point in a year to consumer confidence crashing to 2-year lows.

Not helping matters was the problem child of the year, namely Deutsche Bank, after announcing that they will fire another 10,000 bankers bringing the total layoffs to about 20% of their workforce. This task will most likely take several years to accomplish making me wonder whether they will actually be around that long to reduce costs to that extend.

But, pulling the rug out under today’s early rally attempt was Fed chief Yellen’s unnerving commentary on the economy. In a speech to policymakers and academics, she laid out the scenario that “the US economic potential is slipping and may need aggressive steps to rebuild it.” That sounds to me like the Fed plans on being accommodative a while longer despite traders having priced in a 67% chance of a rate hike in December.

In the end, it’s all one big guessing game, and we will simply have to wait and see how things play out once the election soap opera has finally come to an end on November 8th.

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 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)

Both of our Trend Tracking Indexes (TTIs) headed south as the S&P 500 surrendered around 1% for the week.

Here’s how we closed 10/14/2016:

Domestic TTI: +1.32% (last Friday +1.89%)—Buy signal effective 4/4/2016

International TTI: +2.76% (last Friday +4.12%)—Buy signal effective 7/19/2016

Have a great weekend.


Disclosure: I am obliged to inform you that I, as well as my advisory clients, own some of the ETFs listed in the above table. 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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