7 ETF Model Portfolios You Can Use – Updated through 12/13/2011

Ulli Model ETF Portfolios Contact

After the prior week’s gain, the S&P 500 lost -2.54% since last Wednesday’s update. As a result, those ETF portfolios with mainly bond exposure gained, some stayed even and some lost slightly.

Again, any sharp market pullback, or gain for that matter, will not affect our models significantly due to the high cash holdings and only limited equity/sector positions.

At this point, with the markets seesawing based on the latest news from Europe, I see no reason to increase risky equity exposure. Despite the much hyped EU summit last weekend, nothing tangible to solve the immediate debt crisis has come out of the endless meetings.

In lieu of that continued uncertainty, I will only change my mind and add equity ETFs if market conditions along with momentum numbers improve.

Take a look at the latest update:

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European Fears Won’t Go Away – Continued Strain on Equity ETFs

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

The situation in Europe remains a drag on equity ETFs as markets fell further once more. The S&P edged down 0.85%. The NASDAQ has also been in quite a slump in comparison to the S&P 500 and Dow Jones index, dropping 1.26%. The 10-year Treasury also fell once more, dipping to a yield of 1.96%.

Most notably, the Euro continues to depreciate against the dollar, now hitting $1.30/Euro, its lowest point since January of this year. Although volatility was essentially flat today, there aren’t many positive telling signs that markets will swing into bull territory any time soon.

Evidence that agreement in Europe is quite hard to come by, Merkel dismissed the idea of increasing the size of the European Stability Mechanism (ESM), Europe’s permanent rescue bailout fund. Merkel balked at suggestions of combining the EFSF and ESM given the inability to leverage the financial firepower of the EFSF. In essence, little has been resolved despite the EU summit.

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Back To The Downside – Europe Weighs Down on Equity ETFs

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

Despite an EU Summit that appeared to hint towards fiscal unity and discipline, markets didn’t quite agree with that sentiment today. The S&P 500 slid 1.49% while European markets also had a rough day. With cracks still showing in Europe’s financial system, the Euro took a dip against the dollar down to $1.32/Euro.

Unlike most down days though, volatility actually slightly subsided with the VIX falling 2.69%.

However, investors sought out government securities as the 10-year Treasury dropped 2.10% to yield 2.01%. Meanwhile, gold and oil fell 2.85% and 1.54%, respectively.

Moody’s announced that it will conduct a review of Eurozone sovereign credit ratings in the wake of the summit. In essence, last week’s summit failed to inspire much confidence. Anyways, I’ve seen little evidence that Europe currently has the tools to get out of its debt crisis unscathed.

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ETFs/Mutual Funds On The Cutline – Updated Through 12/9/2011

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/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 397 ETFs, of which currently 101 (last week 84) 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 16 ETFs (last week 15) have managed to hang on in bullish territory after the recent volatility.

The third report covers Mutual Funds on the Cutline. There are currently 154 (last week 110) above the line and 707 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 12/11/2011

Ulli Market Review 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 12/11/2011.

Relief from the European summit that more fiscal discipline will be part of a future agreement involving all 26 EU members (except England) kept the major market indexes elevated.

Even though no structural issues were resolved, it looked like Wall Street was simply relieved that nothing worse had come out of the meetings. Whether that will sustainable remains to be seen.

This week, we covered the following:

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Eurozone Re-Cap: Is A Long-Term Solution in Sight?

Ulli Market Commentary Contact

Although the EU Summit has come to a close this week, it’s still hard to see whether the Eurozone has the tools to rid itself of its crisis. The U.K. has decided not to agree to the new EU treaty, creating some discord among the 26 other European members who agreed.

However, greater problems are still at hand, especially whether European banks can be adequately recapitalized, a reoccurring concern this week, and whether Europe can generate the necessary financial firepower to begin eliminating the debt of countries such as Italy and Spain among others.

The ECB has had to step up and act beyond its traditional scope as of late to keep borrowing costs down while trying to improve liquidity. How long this can go on without external intervention remains to be seen.

The interview below considers a possible outlook for Europe in the wake of the new treaty changes and if we can stay optimistic in the long-term.

http://www.youtube.com/watch?v=WelzeLNJO6I