ETF Leaders And Laggards – For The Week Ending 8/19/2011

Ulli ETF Leaders & Laggards Contact

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

Equity ETFs got bruised again last week, as the S&P 500 lost -4.66% over the past 5 trading days.

Again, the flight to safety was on; the top 3 ETF leaders remained the same but changed positions slightly. With continued market weakness supported by a global economic slowdown, the DJ Transportation ETF (IYT) confirmed that trend as the 4th worst performer on my list.

With the European crisis heating up, amongst widespread jawboning with no concrete solution, it’s interesting to note that the country representing Europe’s top economic engine, (EWG) implied to bail everyone else out, has its own economic problems as its last GDP number indicated hardly any growth.

As a result, it’s no surprise that EWG is the 3rd worst performer on the list, which does not bode well for throwing an assist to those countries in need of financial assistance.

To me, it simply means that trouble is brewing on the horizon, I just don’t know yet if Europe’s top can-kickers will be successful one more time by postponing the unavoidable (default) again.

Disclosure: Holdings in GLD, TLT

08-19-2011

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, August 19, 2011

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2011/08/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-8182011/

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Market Commentary

Friday, August 19, 2011

FORECLOSING ON EQUITIES

The bullish start to this week has long been forgotten, as the major market ETFs got clobbered at the tune of -4.66% for the S&P 500. For the month, this widely followed index is now down by a mind boggling -13.00%, while our core holding, PRPFX, managed to slip only by a scant -1.43%.

Recession fears gripped Wall Street, and rightfully so, as stocks plunged sharply on Thursday, which was followed up by more bearish superiority on Friday. Domestic economic data showed a stalling economy, not just here but in Europe’s main engine, Germany, as well. The debt crisis is far from being contained and worries persist that primarily European banks will be adversely affected once the first domino starts to tumble.

Our Domestic Trend Tracking Indexes (TTIs) slithered further south and have reached the following positions below their long-term trend lines:

Domestic TTI: -0.99% (last week +0.82%)
International TTI: -12.33% (last week -9.27%)

This dip further into bear market territory supported our PRPFX hedge, which shows the following result after today’s close:

So far, PRPFX has held up nicely on its own without any help from the short position SH. Should the markets continue the current path south, the odds of which I consider far better than 50/50, you will see SH’s performance kicking up a notch and lending an assist once PRPFX starts to slip.

While next week’s economic calendar is filled with reports about New Home Sales, Durable Orders, Initial Claims and the all important GDP, it will be the European debt crisis, which will take center stage. I expect some dramatic negative event to surface all of a sudden, which will have more negative consequences for those hanging on to equities. That is not a prediction, because I am not sure of the timing, but merely my opinion based on how I currently view the global landscape.

The best advice I can give during these times is for you to stay out of the market or in hedged positions. Outright longs and shorts can get killed very easily by extreme volatility.

Remember, right now, capital preservation should be your priority number one.

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 Rahul:

Q: Ulli: I regularly visit theetfbully.com for your market analysis and insight. Last Wednesday, I saw your posting about 7 model portfolios. If I want to invest some money today, which model portfolio I should follow? I have some holding in PRPFX. My goal is to preserve capital as far as possible and to position for 7-10% gain yearly.

I appreciate your guidance.
A: Rahul: You should not invest in a new portfolio at this time. Wait till our domestic TTI signals a buy again. Right now, we’re sliding into bear market territory and have our #1 portfolio hedged as shown.

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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, August 19, 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/2011/08/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-8182011/

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Market Commentary

Friday, August 19, 2011

FORECLOSING ON EQUITIES

The bullish start to this week has long been forgotten, as the major market ETFs got clobbered at the tune of -4.66% for the S&P 500. For the month, this widely followed index is now down by a mind boggling -13.00%, while our core holding, PRPFX, managed to slip only by a scant -1.43%.

Recession fears gripped Wall Street, and rightfully so, as stocks plunged sharply on Thursday, which was followed up by more bearish superiority on Friday. Domestic economic data showed a stalling economy, not just here but in Europe’s main engine, Germany, as well. The debt crisis is far from being contained and worries persist that primarily European banks will be adversely affected once the first domino starts to tumble.

Our Domestic Trend Tracking Indexes (TTIs) slithered further south and have reached the following positions below their long-term trend lines:

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 8/18/2011

Ulli Uncategorized Contact

ETF/Mutual Fund Data updated through Thursday, August 18, 2011

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

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: SELL — since 8/9/2011

This past week, the domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the past few days, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. I will not issue a new Buy signal until this index has clearly pierced the trend line to the upside and has remained there for a few trading days.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken back below its long term trend line (red) by -0.34%.

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Misery For Equity ETFs; PRPFX Hedge Gains

Ulli Market Commentary Contact

The markets took another nosedive today as Morgan Stanley warned about a global recession, which caused 10-year Treasury yields to drop below 2% as the flight to safety continued.

As a reader of this blog, the dreaded “R” word (as in ‘Recession,’ not in ‘Recovery’) should be a familiar tune, as I have commented about this very possibility for quite some time.

The sovereign debt crisis, along with weak domestic economic data combined forces to push all major market ETFs substantially lower, as the chart above shows (courtesy of MarketWatch.com).

The Trend Tracking Indexes (TTIs) joined the slide and have reached the following points in regards to their long-term trend lines:

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Market Review – High Volume ETFs On The Cutline – Updated Through 8/17/2011

Ulli ETFs on the Cutline Contact

While the rebound of the past 5 trading days provided welcome relief to those investors who kept their equity ETF positions through the recent market beating, the effect on the cutline has been negligible.

That’s a sign that the recent rebound came from a much oversold position with short covering playing a big role by providing the ammunition needed to push the bearish forces back, at least for the time being.

Tech weakness contributed to a trading day yesterday that started out well to the upside but ended just about unchanged showing lack of conviction in the face of a continuous barrage of reports showing not just domestic but also global weakness.

It looks to me that Wall Street is still counting on the Fed of pulling out another rabbit from the hat via a possible QE-3. Once that sentiment meets reallity, downside momentum may pick up again. I believe that it’s just matter of when not if.

The expanded High Volume ETF Cutline report includes all ETFs above and below the cutline (trend line). 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.

The current report supports my theory of continued weakness as only 16 ETFs are hovering above the cutline, while 74 are stuck in bear market territory.

Take a look at the most recent table:

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