ETF Tracker StatSheet
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S&P 500 NOTCHES A 4TH STRAIGHT WINNING MONTH
- Moving the markets
As we’ve seen before, an early bounce hit the skids mid-day and accelerated towards the end, however, the major indexes managed to eke out a green close with the S&P 500 scoring its 4th straight winning month.
For May, the Dow added 1.9%, the S&P 500 gained 0.6% but the Nasdaq was the odd man out and lost 1.5%, which was its first down month in seven.
Inflation continues to be with us, as a key indicator, namely the core personal consumption index, rose 3.1% in April and exceeded expectations of a 2.9% increase. But analysts were quick to point out that this was not as bad as Wall Street had feared, which means that interest rates and bond yields should remain low—at least that’s how the wishful thinking goes.
Looking at the big picture, the US Dollar has slumped to its major support level set it 2018, and it remains to be seen if the bears will continue to have it their way. If Gold’s recent advance of over 7.5% in May is any indication, the dollar may very well visit its next support level set in 2014.
During the month, the 10-year bond yield raced from a low of 1.46% all the way to 1.7% and settled at the higher end of the range—just below 1.60%.
As mentioned above, Gold performed very well in May, which clearly confirms that, despite officialdom jawboning to the contrary, inflation is here to stay and may get worse. It should be clear to anyone that inflation cannot be simply turned on and off at will, just like you can’t push the toothpaste back into the tube.
Despite the much touted and discussed Fed toolbox, they really are limited to one major option, which is eventually to sharply hike interest rates a la 1980, should the problem get out of hand.
If that measure is enacted, you can kiss the bond-, stock- and housing markets goodbye.
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 slipped a tad but still ended the month higher.
This is how we closed 05/28/2021:
Domestic TTI: +17.04% above its M/A (prior close +17.75%)—Buy signal effective 07/22/2020.
International TTI: +15.41% above its M/A (prior close +15.72%)—Buy signals 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.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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