ETF Leaders And Laggards – For The Week Ending 11/25/2011

Ulli ETF Leaders & Laggards Contact

Here is a quick ETF review of the past week’s Leaders and Laggards from my High Volume ETF Master list:

Another horrific week, as the major indexes got hammered again with the S&P 500 losing some -4.7% despite the Thanksgiving holiday reducing the actual trading days to four.

Europe was front and center again, and the U.S. market was not able to separate itself from the events and daily EU headlines. The latest major agreement was that leaders will no longer engage in public bickering; well, let’s see how long that one holds…

On this week’s Leaders list, a couple of sector ETFs moved to the top (IBB and UNG), but the momentum numbers are not confidence inspiring, which supports my view that being out of equities at this point is a wise decision.

That is not only supported by the threat of more serious debt contagion in Europe, but also by the fact that our Domestic Trend Tracking Index (TTI) has reversed course and is peeking into the abyss called bear market territory.

On the Laggards side of the above matrix, things could hardly be worse, as the five listed candidates are not even close to showing positive momentum and remain deeply entrenched below the %M/A line.

Sure, it’s entirely possible that after 7 down days, a dead cat bounce may give the bulls some hope, but right now it appears that such a move may be ephemeral in nature.

Again, playing it safe, by being predominantly on the sidelines is the most prudent cause of action, since Europe’s issue are likely not to be solved overnight.

Disclosure: Holdings in TLT

11-25-2011

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ETF/No Load Fund Tracker Newsletter For Friday, November 25, 2011

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2011/11/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-11232011/

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Market Commentary

Friday, November 25, 2011

EUROPE KEEPS MAJOR MARKET ETFS ON EDGE — DOMESTIC TTI SLIDES INTO BEAR MARKET TERRRITORY

While a meager S&P 500 drop of 0.27% might have suggested that markets were loaded on valium, the news out of Europe should provide a jolt to wake investors up come next week. It was a truly ugly day in Europe, although the markets did not reflect it.

The dollar appreciated to $1.32/Euro on Eurozone worries. Interestingly, the 10-year bond increased to yield 1.97% despite the fact that yields have been sliding throughout the week. Regardless, risk is still quite high with little indication that it will recede any time soon.

Italy’s financial situation is becoming incredibly unmanageable as its 3-year bond auctions yielded over 8%. The Italians are in a serious danger zone that shows no signs of reversing. Additionally, 6-month bills increased from 3.54% to 6.50%. Plus, we’ve already seen Spain’s yields shoot up while even Germany had a difficult time selling bonds. This is without a doubt the sign of a panic.

As if enough European countries weren’t going down the tube, Belgium received a downgrade to AA from Standard and Poor’s as its banking sector is under immense pressure to stay afloat. Belgium has hit a wall after having to bailout Dexia, and a debt-to-GDP ratio of roughly 100% doesn’t help either.

Meanwhile, I’ve lost all hope in Greece as it shows absolutely no legitimacy or ability to overcome its debt problems. The Greeks today suggested that bondholders should accept a staggering 75% haircut after initially agreeing on a 50% haircut. It’s clear that Greece has no adequate plan to get out of its mess, putting in jeopardy whether it will get additional bailout funds, and upping its chances of default.

This downward spiral is also impacting EFSF plans. The original intention was to leverage the EFSF to $1 trillion while providing insurance for losses, but the spiraling yields across Europe mean there’s a good chance the EFSF will be significantly scaled back.

In regards to our trends, the Domestic TTI (Trend Tracking Index) dropped today below its long-term trend line by -0.42%, while its international cousin remains stuck bear market territory by -12.99%.

With the Domestic TTI having broken its line to the downside, I will wait another day or two before issuing the official ‘Sell’ signal for domestic equity mutual funds and ETFs in order to avoid a whip-saw signal, should the markets shift into rebound mode after taking a beating for 7 straight days.

The official ‘Sell’ signal, whenever it occurs, should not have too much impact on your positions, as you should have been stopped out of all domestic equity ETFs/funds as their trailing sell stops were triggered. You did execute your trailing sell stops, didn’t you?

While I hope you enjoyed your Thanksgiving, it’s time for us all to return to the reality that is a disintegrating Eurozone with the contagion starting to batter core countries. Safety is the key right now, and I’m not planning on straying much from my small holding in consumer staples and some bond ETFs along with a large cash position.

Have a great week.

Ulli…

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READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

A note from reader Steve:

Q: Ulli: I really appreciate your newsletter and blog; just a wealth of great information and a great perspective on preserving (!!) and growing investments. I have a practical question.

My funds are currently almost entirely in cash or bonds, but I did nibble in with a small ($10k) position in PRPFX at the beginning of November.  Obviously it is not behaving very well, and I fear I may hit a 7% sell point pretty soon.

I don’t see that there is a redemption fee, but I have had the experience before of getting “86ed” from a fund for short term trading in similar circumstances. I would like to be able to use PRPFX in the future if it reverts to form.  I am wondering if you have any experience with whether I might get shown the door if I need to sell soon?

Hoping this is all academic on my part, but boy, this market sure looks sour and unpredictable. Again, any insights would be most appreciated.

Thanks again.

A: Steve: It all depends on the custodian, but I don’t think a small $10k early redemption will get you kicked out from this fund. My custodian, Schwab, has a $50 early redemption fee for all mutual funds, so you may get stuck with an amount like that.

Should you run into a problem, you can always use the PRPFX ETF equivalent, as shown in my model portfolio #7.

Hope this helps.

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Back issues of the ETF/No Load Fund Tracker are available on the web at:

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ETF/No Load Fund Tracker Newsletter For Friday, November 25, 2011

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2011/11/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-11232011/

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Market Commentary

Friday, November 25, 2011

EUROPE KEEPS MAJOR MARKET ETFS ON EDGE — DOMESTIC TTI SLIDES INTO BEAR MARKET TERRRITORY

While a meager S&P 500 drop of 0.27% might have suggested that markets were loaded on valium, the news out of Europe should provide a jolt to wake investors up come next week. It was a truly ugly day in Europe, although the markets did not reflect it.

The dollar appreciated to $1.32/Euro on Eurozone worries. Interestingly, the 10-year bond increased to yield 1.97% despite the fact that yields have been sliding throughout the week. Regardless, risk is still quite high with little indication that it will recede any time soon.

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 11/23/2011

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, November 23, 2011

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

The domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities is in effect.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken above its long term trend line (red) by +0.10%. Tune into my blog for the latest updates.

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Domestic TTI Correction

Ulli Market Commentary Contact

The Domestic Trend Tracking Index (TTI) is currently hovering above its long-term trend line by only a scant +0.10% and not +0.43% as I posted in yesterday’s market commentary.

When reviewing the numbers, I noticed that one of the components had not been updated due to closing price unavailability.

Any further market pullback will likely push this indicator below the line and generate a Sell signal for all Domestic Equity mutual funds and ETFs.

I will keep you updated.

Eurozone Turbulence Won’t Stop Battering Equity ETFs Anytime Soon

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

It’s been a tough week for equity ETFs so far as the situation in European begins to nosedive. The S&P 500 dropped 2.21% while European and Asian indices also took a hit. And for the third straight day, investors headed for U.S. government securities as the 10-year U.S. Treasury fell to yield 1.88%.

Meanwhile, the dollar appreciated against the Euro to finish at $1.33/Euro. The Volatility Index also edged up 6.29% today as risk isn’t going away anytime soon. European fears have certainly risen considerably in the past week amidst uncertain governmental changes.

An indication that investor sentiment is falling to the wayside, Germany’s auction for 10-year bonds proved shambolic. Despite the fact that Germany is one of the fiscally responsible nations that others look to for financial assistance, it was only able to sell 65% of its bonds today. If Germany, the de facto Eurozone leader, is seen as risky, we better buckle up for a very bumpy ride. The contagion is spreading quickly, and no one is immune.

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