- Moving the markets
The stimulus effort by the People’s Bank of China to combat the economic impact of the coronavirus set a positive tone for world markets early on, with the domestic ones opening sharply higher aided by another short squeeze. It was simply a matter of investors gaining confidence in that central bankers will take measures to stabilize economies, which in turn supports a move back into risk assets again.
Politics supported equities today as Trump is expected to be cleared of impeachment charges on Wednesday, while the State of the Union address tonight is anticipated to be one of positives, thereby further supporting bullish sentiment.
Despite the coronavirus being far from contained, traders have simply reacted in an upbeat manner based on nothing more than efforts by the Chinese to limit the spread and the injection of funds to stem any economic fallout.
I think this debacle is far from being over, but right now, we are enjoying the rebound.
2. ETFs in the Spotlight
In case you missed the announcement and description of this section, you can 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:
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 Trend Tracking Indexes (TTIs) jumped sharply with today’s action pretty much recouping last Friday’s losses.
Here’s how we closed 02/04/2020:
Domestic TTI: +6.70% above its M/A (prior close +5.15%)—Buy signal effective 02/13/2019
International TTI: +4.11% above its M/A (prior close +2.61%)—Buy signal effective 10/29/2019
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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