ETF Tracker Newsletter For October 28, 2016

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Market Commentary

FBI Announcement Kills Market Rebound


[Chart courtesy of]
  1. Moving the Markets

The surprise came out of left field, as the markets were enjoying a modest rebound, in form of an FBI announcement that it will investigate new emails related to the Democratic nominee Hillary Clinton. That’s all it took and the S&P dropped about 1% before crawling back and limiting its losses for the day to -0.31% and -0.7% for the week.

FBI Director James Comey said in a letter to congressional Republicans that more emails had surfaced that “appear to be pertinent to its investigation” causing momentary panic that the outcome of the elections might be affected.

The latest GDP data showed a growth of 2.9% in the third quarter stoking fears that the case for an interest hike is still on the table. However, with the next Fed meeting being a few days before November 8, a potential hike will very likely be postponed until the December gathering.

Still, I expect volatility to ramp up as we move closer to Election Day. I also would not be surprised to see our Domestic Trend Tracking Index (see section 3 below) to break below its trend line and signal a return to bear market territory. We have now broken below the +1% level and things could accelerate from here. Stay tuned!

  1. 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.

  1. Trend Tracking Indexes (TTIs)

Both of our Trend Tracking Indexes (TTIs) slipped as the major indexes had a down week.

Here’s how we closed 10/28/2016:

Domestic TTI: +0.77% (last Friday +1.45%)—Buy signal effective 4/4/2016

International TTI: +2.64% (last Friday +3.24%)—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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