ETF Tracker StatSheet
You can view the latest version here.
ENDING THE WEEK TO THE DOWNSIDE
- Moving the markets
Yesterday’s rebound now appears to have been an outlier, as the major indexes, following an early bounce, lost their mojo and dropped into the close ending a week that turned out to be the worst since September. The S&P 500 lost 3.4% during this pullback.
Worries over continued rate hikes remained at the center of attention, primarily due to next week’s CPI print, and the Fed’s announcement on the magnitude of its next increase. Expectations are for +0.5%, but the dreaded +0.75% is also on traders’ minds.
Casting a shadow on the upcoming CPI number was today’s Producer Price Index (PPI), because it came in at +0.3% last month (+7.4% YoY), which was higher than the hoped for +0.2% MoM, but leaving the index at its lowest level since May 2021. The core PPI (without Food and Energy) soared +0.4% MoM, or twice the expectations.
Despite those increases, short-term inflation expectations dropped 4.6% to its lowest level since September 2021. However, that number could change quickly, once we have more clarity once next Tuesday’s CPI release.
Looking at the big picture this week, there simply was no place to hide as all sectors ended in the red led by Energy with a 7.8% plunge. Bond yields rose sharply today and erased all this week’s advances, the US Dollar climbed, and crude oil prices dumped 12% over the past 5 trading days, their worst week since the beginning of April, as ZeroHedge reported.
Gold was this week’s winner by ending unchanged and remaining above its $1,800 level.
Next week promises to be an interesting one, during which volatility is sure to reign—either to the upside or the downside, bringing up the question: Will the 2008-2009 analog remain on target?
2. “Buy” Cycle Suggestions
For the current Buy cycle, which starts on 12/1/2022, I suggest you reference my most recent StatSheet for ETFs selections. If you come on board later, you may want to look at the most current version, which is published and posted every Thursday at 6:30 pm PST.
I also recommend for you to consider your risk tolerance when making your selections by dropping down more towards the middle of the M-Index rankings, should you tend to be more risk adverse. Likewise, a partial initial exposure to the markets, say 33% to start with, will reduce your risk in case of a sudden directional turnaround.
We are living in times of great uncertainty, with economic fundamentals steadily deteriorating, which will eventually affect earnings negatively and, by association, stock prices. I can see this current Buy signal to be short lived, say to the end of the year, and would not be surprised if it ends at some point in January.
In my advisor practice, we are therefore looking for limited exposure in value, some growth and dividend ETFs. Of course, gold has been a core holding for a long time.
With all investments, I recommend the use of a trailing sell stop in the range of 8-12% to limit your downside risk.
3. Trend Tracking Indexes (TTIs)
Our TTIs retreated, as uncertainty about next week’s events kept the bears in charge.
This is how we closed 12/09/2022:
Domestic TTI: +0.92% above its M/A (prior close +1.65%)—Buy signal effective 12/1/2022.
International TTI: +2.10% above its M/A (prior close +2.07%)—Buy signal effective
12/1/2022.
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.
———————————————————-
WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?
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 to get more details.
Contact Ulli