Uncertainty Reigns; Dollar Gets Pummeled

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

Uncertainty and volatility reigned supreme as Secretary of State Tillerson’s meeting in Russia initially generated a small relief rally in the dollar with bond yields shooting higher. Then the hammer came down as Trump commented on a variety of issues including China and the overvalued US dollar. That was all it took, and the greenback headed south losing -0.50% as measured by the ETF equivalent UUP.

The morning spike in US Treasury yields came to an abrupt stop, reversed and rates dropped sharply with the 10-year yield ending at a 5-month low of 2.28%. The S&P 500 surrendered a milestone, namely its 50-day M/A, as it retreated by -0.38%. This was the S&P’s first close below its 50-day M/A since the election and is a sign of a weakening intermediate trend.

The big bank stocks (JPM, BAC, GS, MS) remained in tumble mode along with the tech sector, which has dropped now for the 9th straight day, its 2nd longest losing streak in 28 years. Hat tip goes to ZH for this stat. And the winner remains gold, which added another 1.15% to hone in on the 1,300 level.

  1. ETFs in the Spotlight (updated for 2017)

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified and sector ETFs from my HighVolume list as posted every Saturday. 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.

The below 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 2017 candidates have fared so far:

Again, the %M/A column above shows the position of the various ETFs in relation to their respective long term trend lines, while the trailing sell stops are being tracked 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)

Our Trend Tracking Indexes (TTIs) slipped as the major indexes were in retreat mode all day long.

Here’s how we closed 4/12/2017:

Domestic TTI: +2.16% (last close +2.32%)—Buy signal effective 4/4/2016

International TTI: +4.92% (last close +4.93%)—Buy signal effective 7/19/2016

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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