ETF Tracker StatSheet
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BOND YIELDS DROP, DOLLAR PUKES, GOLD SURGES
- Moving the markets
The futures markets showed continued bullish momentum with the S&P 500 racing past a new milestone marker, namely its 3,500 level, above which it eventually closed thanks to the last hour ramp during the regular session.
In the process it scored another all-time high, with the Dow being the laggard by finally erasing its 2020 loss, while the Nasdaq remains the dominant force.
As ZH pointed out, this is the S&P’s 7th straight daily gain, 5th straight weekly gain and 5th straight monthly gain, all thanks to the Fed’s reckless money creation efforts. Again, market strength continues to be concentrated in fewer and fewer stocks to a point of absurdity. How absurd? Consider that AAPL nears the same size as the entire Russell 2000! Ouch!
The Nasdaq closed in line with the other major indexes, but the star of the day was gold, which benefited greatly from slipping bond yields and a further collapse in the US dollar. GLD gained +1.75% for the session.
So, can this overvalued market head even higher?
“By any metric, valuations are in nosebleed territory, but there is this entrenched view that the Fed has your back, that the polls are wrong and there will be a Trump sweep, and that a vaccine is coming this fall,” said David Rosenberg, a long-time strategist now running his own firm, Rosenberg Research. “These are hardened views in the marketplace. That’s what’s triggering this ongoing rally in risk equities.”
If David is right it could, but you can never be certain, which is why I continue to pounce on the importance of not only having but also executing an exit strategy, should the need arise when this rally hits a glass ceiling and shifts into reverse.
2. ETFs in the Spotlight
In case you missed the announcement and description of this section, you can read it here again.
It features some of the 10 broadly diversified domestic 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 these ETFs are fluctuating 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 TTIs both jumped as today’s rally was broad based.
This is how we closed 08/28/2020:
Domestic TTI: +8.74% above its M/A (prior close +7.88%)—Buy signal effective 07/22/2020
International TTI: +7.22% above its M/A (prior close +6.54%)—Buy signal effective 07/22/2020
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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