7 ETF Model Portfolios You Can Use – Updated through 11/22/2011

Ulli Model ETF Portfolios Contact

Since last week’s report, the S&P 500 took a pounding at the rate of -5.56%, and our portfolios retreated as well, but to far lesser degree due to only limited equity exposure.

Monday’s drop triggered our 7% trailing sell stop for VTI, and the positions were liquidated on Tuesday morning. All ETF model portfolios with VTI holdings were affected. Weakness in the equity markets is getting worse, which is confirmed by our Trend Tracking Indexes (TTIs).

This is most apparent by our Domestic TTI, which has come off its high and remains in bullish territory by only a meager +0.96%. On the international side, things are much worse, as our International TTI has sunk further into bearish territory by -11.07%.

Take a look at the latest update:

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No Major ETF Movements, But Still a Negative Outlook

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

Markets finished moderately to the downside as the S&P 500 finished down 0.41% in a less volatile trading session. The dollar remained steady at $1.35/Euro, while commodities didn’t fluctuate much. Also, the VIX dropped 2.86% to 31.97.

However, the closing numbers don’t do justice to intra-day volatility. Our trailing sell stop in VTI was triggered after Monday’s market tumble, and this holding was liquidated this morning as the major indexes headed further south. You can see the details in my latest ETF model portfolio update, which will be posted tomorrow morning.

Once again, the 10-year Treasury dipped considerably, falling to a yield of 1.94%. While we haven’t seen an en masse flight to safety yet, there are signs that developed European and Asian investors as well as emerging markets investors will flock to U.S. Treasures if Europe goes to down.

Most likely influenced by the capital inadequacy of some major European banks and U.S. bank exposure to European debt, the Federal Reserve is set to conduct its 4th round of stress tests in 2012. Bernanke has made it clear that a contagion emanating from Europe could cause a deep capital shortfall if all goes wrong.

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Perhaps the Start of a Rough Week for Equity ETFs

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

The week started off rocky as European fears set in, pulling the S&P 500 down 1.86%. Europe indices took an even harder hit with the DAX down 3.35% and the CAC 40 dipping 3.41%. In government bonds, the 10-year Treasury fell 2.49% to 1.96 as investors sought safety. Nevertheless, the dollar was unchanged versus the Euro, staying at $1.35/Euro.

Despite weakness in equities, gold had a rough day as well, falling 2.39% to drop below 1,700. Although the VIX only rose 2.84% today, there is a lot of risk still on the table. An indication of overseas tension, foreign banks have more than doubled their deposits at the Federal Reserve from $350 billion to $710 billion since late last year. While the U.S. has its fair share of troubles, it’s proving to be a relatively safe haven compared to Europe or Asia.

Following European ineptitude, the U.S. Super”dud”committee failed to agree on a deal to reduce the budget deficit. As if there wasn’t enough global political turmoil, Congress has added insult to injury. Looks like markets are going to be quite uneasy over the next few days.

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ETFs/Mutual Funds On The Cutline – Updated Through 11/18/2011

Ulli ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 397 ETFs, of which currently 45 of them are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher.

These ETFs are generated from my selected list of some 90 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. Only 9 ETFs have managed to hang on in bullish territory after last week’s drubbing.

The third report covers Mutual Funds on the Cutline. There are currently 34 above the line and 828 below it out of the 862 that I follow.

Take a look:

1. ETF Master Cutline Report

2. ETF High Volume Cutline Report

3. MF Cutline Report

Last Week In Review: ETF News And Blog Posts To 11/20/2011

Ulli ETF News Contact

In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 11/20/2011.

Europe’s lack of progress to solve its debt issues affected the global markets, and the S&P 500 surrendered some 3.8% last week.

Judging by the daily news announcements, things seem to be worsening as no clear plan is being put forth that could be interpreted as a step in the right direction. The band aid and putting-out-the-fire approach prevails, and it’s just a matter of time before reality sets in causing a negative market reaction.

This week, we covered the following:

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Heading into Uncharted Territory: European Breakdown

Ulli Market Commentary Contact

As markets erred to the downside this week, it’s clear that Europe has its back up against the wall. Italian and Spanish bond yields have reached new heights as the contagion appears to be spreading. Not only are all Eurozone nations linked together with debt holdings, but so is the U.S. as well as many Asian countries. Although we didn’t see a huge single day drop in markets in the last several days, there is an uncomfortable amount of risk still lingering.

Political cohesion and smooth governmental transitions are necessary to spearhead economic progress and inspire confidence among investors that European leaders can come to a consensus concerning a bailout strategy. However, getting 17 nations to agree in a timely fashion is a tall order when time is of the essence.

In the meantime, this week’s interview between CNN’s Fareed Zakaria and PIMCO CEO Mohamed El-Erian provides a solid run down of recent Eurozone developments and what to expect going forward:

http://www.pimco.com/_layouts/PIMCO.GLOBAL.UI/BroadcastModal.aspx?broadcastId=/EN/Broadcasts/Pages/Mohamed-El-Erian-on-CNN-11-13-2011.aspx