ETF Tracker StatSheet
HOBBLING INTO THE WEEKEND
- Moving the markets
It was tough week with the major indexes struggling to not give back their gains made in the first 3 trading sessions. Even though we dumped into the weekend, stocks ended up in the green by a fraction of a percent.
All good things must come to an end eventually. This was the case with our favorite Semiconductor (SMH) holding, which had been dancing around its trailing sell stop for weeks.
As I mentioned yesterday, SMH had broken down and only a sharp rally this morning would have kept me from pulling the plug and exiting the position. The rally did not happen, and I liquidated.
This brings to an end a nice upward move over the past 14 months, which now allowed us to turn paper gains into real gains. To be clear, trailing sell stops are not just implemented to limit losses but also to take profits once a bullish movement has run its course and an ETF comes off its highs and drops past a pre-set percentage.
Helping to create the negative market sentiment were several actors. Technology and consumer staples showed weakness, which could not be overcome by the latest corporate earnings, despite them beating expectations.
I have long held the view that equities will be negatively affected once the 10-year bond yield crawls above 3%. While that did not happen yet, the previous old high of 2.94% (made in February) was taken out today with the yield hitting highs last seen in December 2014. That proved to be the nail in the coffin and down we went.
The rise in bond yields was attributed to higher inflation expectations. Had there been evidence of solid economic growth as a cause, we may have seen an accompanying rise in stocks. With the yield now knocking on the 3% level, we could see more downside in equities with the question remaining as to whether a crossing into 3% territory will bring about the demise of this current “Buy” cycle. Stay tuned!
- 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 in regards to 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.
Year to date, here’s how our candidates have fared so far:
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 -7.5% point has been taken out in the “Off High” column.
- Trend Tracking Indexes (TTIs)
Our Trend Tracking Indexes (TTIs) headed south as the bears ruled the session.
Here’s how we closed 4/20/2018:
Domestic TTI: +1.30% above its M/A (last close +1.80%)—Buy signal effective 4/4/2016
International TTI: +2.18% below its M/A (last close +2.83%)—Buy signal effective 7/19/2016
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 guidelines specified.
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