ETFs/Mutual Funds On The Cutline – Updated Through 1/6/2012

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/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 398 ETFs, of which currently 162 (last week 110) 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 93 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 21 ETFs (last week 16) have managed to hang on in bullish territory after the recent volatility.

The third report covers Mutual Funds on the Cutline. There are currently 289 (last week 127) above the line and 734 below it out of the 861 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 1/8/2012

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 1/8/2012.

The major indexes started the first trading day of 2012 with a nice rebound, after the prior week’s sluggish activity, but ended up meandering sideways for the remainder of the week.

While domestic economic numbers were decent, the global slowdown, along with Europe’s continued debt problems, may be a hard to overcome headwind. It makes me wonder how long the domestic market can remain decoupled from the rest of the world.

This week, we covered the following:

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European Banking Crisis – ECB Action Is Not Enough

Ulli Market Commentary Contact

The ECB has taken drastic measures to ensure the liquidity, and probably more realistically, the solvency of the European banking system. Through long-term refinancing options, which are essentially near costless loans, the ECB has tried to kick start banks into lending mode.

However, as apparent in this Financial Times analysis video, these actions have failed to inspire confidence in the banking system. Despite obtaining over $600 billion from ECB loans, banks would rather build up cash reserves and park it at the ECB for chump change than lend it out and face the risk of no repayment. In turn, businesses can’t receive the necessary capital to engage in investment or properly carry on operations, thus negatively impacting the real economy.

Outside of the Eurozone’s poor public finances, Europe’s banks are the engine that will determine whether Europe’s financial system will run effectively. Insolvency is such a significant fear that banks are pursuing an ultra low risk strategy where they don’t even want to purchase government debt.

This leaves the ECB to foot the bill and take on dangerous exposure to countries with high borrowing costs such as Italy and Spain. In essence, the risk simply gets shoved to the ECB, putting Europe in greater danger if the ECB’s balance sheet starts becoming toxic, which would then trickle down to Europe’s biggest banks.

Although markets may not be hurting badly right now, a deepening of Europe’s banking crisis can rapidly change that.

Are Country ETFs Worth the Investment?

Ulli ETF News Contact

As the whole world seems to have turned upside down in a financial sense, it nevertheless beckons the question of whether opportunities still exist in some parts of the globe.

Although the U.S., Europe, and parts of Asia are going through difficult times to say the least, there are other regions which have appeared to do well on a short-term basis such as Latin America.

However, that’s not to say that effects of the European contagion can suddenly infect emerging markets partially dependent on European financing. We only have to look to U.S. Treasuries to see that investors worldwide are flocking to them during periods of great uncertainty.

We currently have country ETFs listed as a selective buy, but there are still inherent risks. Achieving diversification is difficult without purchasing a number of country ETFs from various regions. Meanwhile, Country ETFs are sensitive to political risk, especially as we saw last year in the Middle East with the Arab Spring, which led to significant volatility in Middle Eastern markets.

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01-06-2012

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, January 6, 2012

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2012/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01052012/

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Market Commentary

Friday, January 6, 2012

POSITIVE JOBS NUMBERS ARE NOT ENOUGH TO PUSH UP MAJOR MARKET ETFS

Although unemployment fell to a 3-year low today, it didn’t do much to catapult markets as the S&P 500 fell 0.25%. However, the NASDAQ had its best week in 6 weeks.

Not only did tech stocks have a great week, but so did financials, which took a drubbing in 2011. For instance, Financial Select Sector SPDR (XLF) gained 3.2%.

As seen with the Euro dropping to $1.27/Euro, European discord still reigns supreme as the driving factor on investors’ minds and as indicated by PIMCO’s Mohamed El-Erian, who believes Europe is at a turning point to try and save itself. Furthermore, the 10-year Treasury dropped to a yield of 1.96%, illustrating the fear of European contagion spreading.

The major news of the day was the decrease in the unemployment rate to 8.5%. According to the U.S. Department of Labor, 200,000 jobs were added, surpassing expectations.

This is surely a positive trend, but there are still a significant number of part-time workers and marginally attached workers. Also, the labor force participation rate remains low at 64.0%. See the Bureau of Labor Statistics report for more specific info.

With housing a major concern as well, the Fed has suggested exploring alternative measures to improve the housing market. Seeing as zero-interest rates still have failed to boost the economy, Bernanke is coming to grips with the need for other solutions.

High borrowing costs in Italy are now raising questions about whether Italy can stay afloat financially. With its 10-year now at 7.09% and over $2 trillion in debt, I’m afraid that a bailout on top of austerity measures will not be sufficient. Italy may arguably be too big to fail but it may also be too big to bail at the detriment of other Eurozone members.

Looking at Europe as a whole, the 4th quarter will probably be another disappointment. Despite the holiday season, retail sales and consumer confidence fell. Whether the recent ECB measures to boost bank lending can help spur the economy is the big unknown.

Today’s unemployment figures are a glimmer of hope, but Europe is without a doubt the most pressing concern on our minds. Increasing equity ETF exposure still doesn’t make sense for the most part with the exception of a few sector ETFs. As the first week of 2012 has come to an inconclusive close, perhaps next week will be more revealing of how markets will trend.

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 Kent:

Q: Ulli: In taking positions in bond funds/ETFs, if bonds are in an uptrend, do you tend to enter bonds, pretty much at any point, and use the 5% stop rule to keep you out of trouble?

It appears that waiting for pullbacks might prove to be harder with bonds, at least in recent history, when they’ve been so strong.  I’d be interested in your thoughts on this, when you get a minute, as my experience with bonds and bond funds is more limited.

Thanks!

A: Kent: Yes, you are correct. If you plan on buying a bond ETF, simply purchase it on a day when it’s down. That’s how I do it as I have not found a good way to buy on pullbacks.

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WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

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, January 6, 2012

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/2012/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01052012/

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Market Commentary

Friday, January 6, 2012

POSITIVE JOBS NUMBERS ARE NOT ENOUGH TO PUSH UP MAJOR MARKET ETFS

Although unemployment fell to a 3-year low today, it didn’t do much to catapult markets as the S&P 500 fell 0.25%. However, the NASDAQ had its best week in 6 weeks.

Not only did tech stocks have a great week, but so did financials, which took a drubbing in 2011. For instance, Financial Select Sector SPDR (XLF) gained 3.2%.

As seen with the Euro dropping to $1.27/Euro, European discord still reigns supreme as the driving factor on investors’ minds and as indicated by PIMCO’s Mohamed El-Erian, who believes Europe is at a turning point to try and save itself. Furthermore, the 10-year Treasury dropped to a yield of 1.96%, illustrating the fear of European contagion spreading.

Read More