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

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 roller coaster week shifted things around in the winners and losers columns. It’s interesting to note that, despite the equity ETF comeback of last two trading days, none of them gained enough to make it into the Leaders column.

Sector ETFs were the primary gainers, some of which just crossed their long term trend lines to the upside as the %M/A column shows. Along with positive M-Index rankings, they may be worth your consideration. I will post the corresponding updated High Volume ETF Cutline list on Monday morning, so that you can better evaluate those ETFs that have jumped into bullish territory.

Country ETFs were a mixed bag this week, as two of them made into the Leaders column, while three of them ended up on the losing side. Again, to be certain that upward momentum is rising, you want to enhance your odds of success by making sure that the %M/A column is positive; it shows the percentage an ETF has climbed above its trend line (positive number).

The idea here is not to engage in bottom fishing but to catch ETFs as they come out of the basement and cross the dividing line between bullish and bearish territory to the upside.

Disclosure: No holdings

11-11-2011

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, November 11, 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-11102011/

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Market Commentary

Friday, November 11, 2011

EQUITY ETFS HAVE A BREAKOUT WEEK – WILL NEXT WEEK BE THE UGLY SHAKEUP?

Just when it looked like Europe was falling apart last Wednesday, markets somehow managed to finish the week on a high note, as the S&P 500 increased 1.95% today.

European indices also had a big day, especially the DAX, which rose 3.22%. Furthermore, the VIX retreated but stayed just above the 30 mark, indicating that there is still plenty of risk lurking in the markets.

In commodities, oil and gold gained 1.29% and 1.72%, respectively. With all the volatility in equities, gold has held its own and will likely continue to remain attractive if equities dive once again.

There seems to be a market sentiment downplaying European risk, which I don’t agree with whatsoever. As reiterated by Federal Reserve vice chairman Janet Yellen, the U.S. economy is still significantly linked to European banking institutions. A financial setback in Europe can easily impose severe stress to the U.S. banking system.

Italy today passed an austerity measure to reduce its debt load, although this doesn’t bode well for the country’s growth prospects. Italian bond spreads are still incredibly high relative to comparable German bonds and the transitional government, once Berlusconi’s gone, is still unresolved.

As noted by MIT economist Simon Johnson, troubled Eurozone nations have a significant amount of foreign debt ownership, making contagion a very real possibility if all goes wrong. For instance, 44.4% of Italian debt is held by foreigners while Greek debt stands at 57.4%.

Lest we forget, Greece still has no solidified political plan with PM Papademos as a mere placeholder. Day by day, the probability of default and Eurozone expulsion increases. In addition to Greece, Spain’s prospects worsened as it reported no growth in the third quarter, exposing the country to greater risk if contagion is transmitted there from Italy.

Taking a look at market trends, the S&P 500 still hovers below its 200-day MA (Moving Average) by -0.73%, a level which has acted as a glass ceiling during recent rally attempts. Our Domestic Trend Tracking Index (TTI) remains above the line by +2.33% as of yesterday, however, our international TTI is stuck in a rut unable to get out of bear territory (-6.41%), which is why we’ve avoided international equity exposure.

For me, it’s hard to rationalize why markets did well this week. One thing is for sure though – Europe’s problems will continue and risk won’t diminish until some sort of long-term resolutions concerning Greece and Italy are put in place.

As this week has shown, any negative news from the European theater can pull the rug out from under the equity market with lightening speed. This is why I’ll take refuge in my bond ETF and cash position while adding equity ETFs only on a selective basis.

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 Richard:

Q: Ulli: Recently, PRPFX stopped out. If memory serves, your back test of PRPFX presumed repurchases when prices crossed above Stop Prices plus 2%.

Not too long ago, PRPFX closed 2% above its Stop Price.  Do you recommend repurchasing PRPFX at this time, based upon the above criteria, or should we wait for different criteria?  Or is PRPFX no longer necessarily a recommended fund for the next Buy cycle?

A: Richard: Sure, that is one way to get back in, and an acceptable one with ETFs.

Since mutual funds have trading restriction, my preference is to delay the entry point and see PRPFX close back above its long-term trend line, which it did recently. Alternatively, if you prefer an earlier buy point, you could use the ETF equivalent of PRPFX as featured in model portfolios (#7).

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https://theetfbully.com/personal-investment-management/

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

https://theetfbully.com/newsletter-archives/

ETF/No Load Fund Tracker Newsletter For Friday, November 11, 2011

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

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-11102011/

————————————————————

Market Commentary

Friday, November 11, 2011

EQUITY ETFS HAVE A BREAKOUT WEEK – WILL NEXT WEEK BE THE UGLY SHAKEUP?

Just when it looked like Europe was falling apart last Wednesday, markets somehow managed to finish the week on a high note, as the S&P 500 increased 1.95% today.

European indices also had a big day, especially the DAX, which rose 3.22%. Furthermore, the VIX retreated but stayed just above the 30 mark, indicating that there is still plenty of risk lurking in the markets.

In commodities, oil and gold gained 1.29% and 1.72%, respectively. With all the volatility in equities, gold has held its own and will likely continue to remain attractive if equities dive once again.

There seems to be a market sentiment downplaying European risk, which I don’t agree with whatsoever. As reiterated by Federal Reserve vice chairman Janet Yellen, the U.S. economy is still significantly linked to European banking institutions. A financial setback in Europe can easily impose severe stress to the U.S. banking system.

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 11/10/2011

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, November 10, 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 back above its long term trend line (red) by +2.33%.

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Investors See Some Light Today, Yet Equity ETFs Are Still Entrenched In Darkness

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

After yesterday’s big losses, markets edged up a little bit today although the overall story in Europe hasn’t changed in a day’s passing. The S&P 500 gained a modest 0.86% while the 10-year Treasury rate shot right back up to end at 2.06%. The dollar/Euro exchange rate barely changed, rising slightly to $1.36/Euro.

Luckily, risk tempered as the VIX fell 9.26% in the wake of yesterday’s massive surge. Nevertheless, we are still in risky territory and equity ETF opportunities are starting to become few and far between once again, despite our Domestic Trend Tracking Index (TTI) remaining in bullish territory by +2.35%.

Italian optimism crept back into markets today because of lower yields in Italy’s bond sale, although it’s likely that the ECB heavily intervened to keep borrowing costs from getting out of control. Nouriel Roubini’s latest piece drives home the point that Italy’s spiraling debt is a force to be reckoned with that can bring down Europe.

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Is This the Start Of Another Downward Spiral For ETFs?

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

It looks like the deep rooted problems of the Eurozone finally registered with investors as markets tanked after two consecutive days of seemingly unjustified exuberance. The S&P 500 took a 3.67% dive, while major European indices also took a sizeable hit. Nevertheless, Asia somehow finished on the positive side.

The dollar noticeably strengthened against the Euro as Italy’s situation has quickly worsened, appreciating 3 cents to $1.35/Euro. And as an indicator of heightened Eurozone risk triggering a temporary flight to safety, the U.S. 10-year Treasury dropped to yield 1.96%.

However, the most eye popping figure that grabbed my attention was the Volatility Index (VIX), which catapulted 31.59% to 36.16. This was the largest increase since August 8 when the VIX had a 50% pop. As I mentioned yesterday about how quickly we can switch from risk on to risk off and vice versa, we are certainly back into risk on mode as Italy’s debt problems come to the forefront.

Read More