ETF Tracker StatSheet
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FED SPEAKS: MARKETS DROP LIKE A ROCK
- Moving the markets
To be fair, it wasn’t just Fed chief Powell’s Jackson Hole speech that put the markets in a sour mood. The hammer came down hard, after Trump unleashed a verbal tirade, first towards the Fed:
As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great. My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?”
If that was not enough, he upped the ante in response to China’s threat to levy new tariffs on the US:
“We don’t need China and, frankly, would be far better off without them“, and ordered “Our great American companies… to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
“I will be responding to China’s Tariffs this afternoon.”
Not much else was needed to shift the computer algos and traders into selling mode and down we went. There was no looking back with all major indexes closing deeply in the red, and that reaction did not even include Trump’s mystery “afternoon” announcement.
The war of words can’t get much uglier, and we may see more fallout next week when the rhetoric is sure to continue. In the meantime, the G-7 meeting is on deck for this weekend in France. Last time, the get-together was such a disaster that the seven nations could not even agree on a common communique. I don’t expect much more this time.
This week’s wild swings in the market have left their mark on our Trend Tracking Indexes (TTIs). As posted, the International one headed into bear market territory on 8/15/19, while the Domestic one bounced off its trend line and has held steady until today.
The Domestic TTI has now slipped slightly below its long-term trend line (see section 3) and may very well signal a move to the sidelines next week. We are also approaching the notoriously volatile month of the September, where anything is possible.
Stay tuned!
2. 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 regarding 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.
For this current domestic “Buy” cycle, here’s how some our candidates have fared:
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 Trend Tracking Indexes (TTIs) took a dive, as the markets got slammed with the Domestic one now hovering slightly below its trend line. Of course, I need to see more of a downside piercing, along with some staying power, before I declare this ‘Buy’ cycle to be over.
Here’s how we closed 08/23/2019:
Domestic TTI: -0.10% below its M/A (prior close +2.83%)—Buy signal effective 02/13/2019
International TTI: -2.40% below its M/A (prior close -1.00%)—Sell signal effective 08/15/2019
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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