ETF Tracker Newsletter For October 9, 2020

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[Chart courtesy of]

  1. Moving the markets

Despite Tuesday’s pullback, equities picked up steam and closed higher with the Dow sporting its best week since August, while the S&P 500 added +3.85% over the past five trading days, with the Nasdaq showing similar gains.

Despite the non-stop stimulus tug-of-war, today Trump indicated that “Covid relief negotiations are moving along. Go Big!” That is quite a turnaround from his Tuesday tweet of negotiations being postponed till after the elections. Well, you would need to read his book “The Art of the Deal” to make sense out of this and to see where he is coming from.

That also explains the reversal in the dollar, which has been freefalling and tumbling to three week lows. It comes as no surprise that the beneficiary turned out to be Gold, which has soared and comfortably recaptured its $1,900 level.

Added ZH:

Gold, meanwhile, has concluded that the now-imminent debt binge will indeed crush the dollar, sending capital pouring into safe havens. This sent gold to its best day since Aug 17th…

The act of creating reckless amounts of new money to fund deficits and relief programs is a hotly debated issue with analyst Peter Schiff seeing it this way:

“The problem is once you accept the false premise that government stimulus actually helps the economy – that it really is a stimulus – then you’ve kind of lost the argument. Because if borrowing and printing $1.6 trillion, if that’s a good thing, why isn’t borrowing and printing $2.4 trillion a better thing? Because you put the Republicans in the position of arguing that 2.4 trillion is too much of a good thing — that somehow, if we just create 1.6 trillion out of thin air and spend it, that’s really going to help. But if we push it to 2.4, it’s actually going to hurt. Why? I mean, when does something good suddenly become something bad?”

I agree with his analysis, which is why I look at the long-term effects and potential consequences and realize the significance of holding gold in anyone’s portfolio. Make no mistake about it, hyperinflation is the eventual outcome, the timing of it is just the big unknown.

Again, the short-squeeze continued unabated and has been a major driver of equities since late September, as Bloomberg’s chart shows.

Let’s see how this movie continues next week. For sure, it won’t be boring.

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 inched higher after yesterday’s jump.

This is how we closed 10/09/2020:

Domestic TTI: +10.95% above its M/A (prior close +10.79%)—Buy signal effective 07/22/2020

International TTI: +7.11% above its M/A (prior close +6.47%)—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.



Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details here.


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