ETF/No Load Fund Tracker Newsletter For Friday, September 23, 2011

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ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2011/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-9222011/

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Market Commentary

Friday, September 23, 2011

A COMATOSE BULL

What a difference a week makes. Last Friday, the major indexes had finished managing a tremendous rebound, only to see it evaporate, and then some, during the past 5 trading days, with the S&P 500 giving back -6.58%.

The interesting part during this world wide sell fest was that many big players were forced to liquidate positions to raise cash and to meet margin calls, which pulled the rug out from under the commodities sector.

Especially hard hit were gold and silver with gold falling 9.6% for the week and silver dropping an astonishing 26.3%. The flight to safety did include predominantly U.S. Treasuries and the U.S. dollar. For more specific market commentary, please review my daily blog entries.

Since gold and silver represent about 25% of our core holding PRPFX, that fund got clobbered at a rate of -6.23%, almost matching the S&P 500. PRPFX has now come off its high by -7.69%, which puts us into sell territory, a position that I have not seen with this fund since the middle of 2008.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 9/22/2011

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ETF/Mutual Fund Data updated through Thursday, September 22, 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

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. I will not issue a new Buy signal until this index has clearly pierced the trend line to the upside and has remained there.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken back below its long term trend line (red) by -0.10%.

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Global ETFs Hammered; Domestic TTI Breaks Back Into Bear Territory

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[Please note that Gold and Oil prices in above chart reflect the evening session]

Today, there was simply no place to hide, unless you were invested 100% in U.S. Treasuries and/or some selected Bond ETFs. Just about all other asset classes got taken to the barn and spanked in no particular order.

It was relentless selling around the globe with the Dow being down at one point by over 500 points. The only positive was that the major indexes managed a rebound towards the end of the session and closed up from their worst levels of the day.

You could call it a perfect storm, as a variety of news items combined forces and left the bears pounding their chest in victory.

Fed chairman Bernanke’s comments on Wednesday about “significant downside risks” to economic growth” including “strains in global financial markets” were stronger words as those used in the past and instantly shifted traders’ worries into high gear. As a result, the Dow dropped over 300 points right at the open, and it went downhill from there.

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High Volume ETFs On The Cutline – Updated Through 9/21/2011

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With yesterday’s sell off, as a result of the Fed’s “stimulus” not being perceived as large and dramatic enough, the S&P 500 has given back -1.85% since last week’s report.

This weakness was immediately reflected in the momentum numbers and affected rankings above and below the cutline. We held steady in terms of positioning, as only 7 ETFs remain above the line and in bullish territory, while all others roam around with the bears below the line.

As I mentioned last week, despite the various rebound attempts, weakness prevails in the equity arena. I still consider the current market environment to be a traders market and not one for long term investors due to its extreme volatile nature. A long term trend in either direction can simply not yet be identified without wild guesswork.

To repeat, the 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.

Take a look at the most recent ETF Cutline Report:

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Equity ETFs Wobble, Then Turn Into A Sell Fest

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While doing what is expected can be a good thing, it can also backfire, especially when Wall Street is clamoring for a serious assist from the Fed to boost the ailing economy one more time.

Well, that did not happen, and disappointment set in pulling the rug out from any early upward momentum. As the chart from MarketWatch.com above shows, we closed at the lows of the day, which may invite more selling tomorrow.

The Fed’s Operation Twist is designed to keep long-term rates low hoping/wishing to jumpstart the economy. The FOMC in its notes remarked that economic weakness has continued, unemployment remains high and housing is a disaster. Also, further downside risks to the economy remain while global financial markets are strained.

While that is really nothing new, it makes it official and traders on Wall Street did not like it one bit, and selling accelerated during the last hour.

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7 ETF Model Portfolios You Can Use – Updated through 9/20/2011

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Gold slipped while the S&P 500 gained +2.47% since last Wednesday’s report. As a result, some of our ETF Model Portfolios retreated as well, as the roller coaster ride in the markets continued.

Currently, it’s all about interpretation of the latest news about Greece & Co., while domestic weak economic reports have been mainly shrugged off. Uncertainty continues, and Wall Street traders will eagerly await the outcome of the Fed meeting later on today.

This is the time to just sit and wait until we can better evaluate the major trend. All eyes are on Fed chief Bernanke and, to my way of thinking, nothing less than a grand, unexpected assist will move the major indexes higher. Anything less than that will likely be met with disappointment resulting in a sell-off.

Take a look at this week’s model portfolios:

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