ETF Tracker StatSheet
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SLOW AND STEADY
- Moving the markets
The major indexes continued their upward trend, slow and steady, as we’ve seen all week, which is preferable over fast and furious moves followed by quick and sharp corrections.
Today’s melt up was in part caused by quadruple options expirations creating more volatility than we’ve seen during the recent past. You could say that the options market “tail” was wagging the US equity market “dog” once again as ZH quipped.
While not earthshattering but market pleasing, was the final Q3 GDP revision, which remained unchanged at 2.1% and represents a fractional rise from the 2% in Q2.
The always present fears of a potential downward adjustment have now been alleviated, which contributed to market stability. Also helping the indexes push higher was a report that Personal Incomes, after a slowdown in October, grew at the fastest pace of 2019, while spending accelerated as well.
Mixed news came from the “Retailpocalypse” with data showing that so far 9,300 stores have closed across the US in 2019, which is a 59% increase over 2018. This clearly represents a change of the times we are living in, during which the physical department stores are only of limited value for shoppers with the many online options being the preferred mode of operation. Sad or not, it is a fact.
In the end, the major indexes touched record intraday highs before fading into the close. This Friday marks the fourth straight week of gains with the S&P 500 adding +1.6% over the past 5 trading days. Right now, the bull looks to be alive and well, while the bears seemed to have gone into hibernation—at least for the moment.
Why is that? You should know by now, that the driver of this relentless melt up has been and remains global liquidity, as this chart from Bloomberg shows. Otherwise, how would it be possible for the S&P to have gained so substantially this year, while earnings expectations have slid almost 5%?
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 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.
For this current domestic “Buy” cycle, here’s how some our candidates have fared:
Click image to enlarge
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%.
3. Trend Tracking Indexes (TTIs)
Our Trend Tracking Indexes (TTIs) inched higher with the major indexes closing the week on a positive note.
Here’s how we closed 12/19/2019:
Domestic TTI: +7.79% above its M/A (prior close +7.25%)—Buy signal effective 02/13/2019
International TTI: +6.30% above its M/A (prior close +6.04%)—Buy signal effective 10/29/2019
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 specified guidelines.
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