ETF Tracker Newsletter For November 30, 2018

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  1. Moving the markets

The computer algos had a field day and drove the markets higher based on the assumption that “something could maybe possibly happen” when Trump and Xi meet for dinner this weekend. That sparked a buying panic based on FOMO (Fear Of Missing Out), which put the fear factor that nothing might happen on the back burner. Thanks to the dovish Fed, the major indexes ended the week in the green, thereby recovering all the losses of the Thanksgiving week meltdown and ending the month slightly on a positive note.

The S&P 500 and Nasdaq had their best week in about 7 years but, as I have always said, and as history has shown, some of the biggest market recoveries happen while we’re stuck in bear market territory.

Much of this week’s activity was based on speculation whether the Fed “blinked” by bringing back lower interest rates and bond yields. Right now, it looks that way as the widely followed 10-year bond yield dropped the most in more than a year. It tumbled over 14 basis points in a month to end November at 3.02%.

For sure, that’s what stoked markets over the past week and, if this trend continues, the bulls may very well take the upper hand again. If an assist is thrown via a positive outcome from Trump’s dinner with Xi, and that is still a big uncertainty, we may find ourselves back in domestic equities very soon. Any defusing of trade tensions will get the bullish juices flowing, as we’ve seen in the past, but especially if a verifiable deal is made, we will be off to the races.

We will know more by Monday morning.

  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 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 regarding 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 our original candidates have fared:

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 -8% point has been taken out in the “Off High” column. For more volatile sector ETFs, the trigger point is -10%.

  1. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) remain bearish, but the Domestic one is moving closer to a potential trend line break.

Here’s how we closed 11/30/2018:

Domestic TTI: -0.52% below its M/A (last close -0.84%)—Sell signal effective 11/15/2018

International TTI: -3.09% below its M/A (last close -3.33%)—Sell signal effective 10/11/2018

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



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