Major Market ETFs Move Sideways

Ulli Market Commentary Contact

Despite a nice start to the upside, the major markets ETFs got stuck stuck and went nowhere after meandering around the unchanged line all day.

In accordance with our sell stop discipline, we sold VEU, which affected several of our model portfolios, as you will see with the next report due out on Wednesday. A few selected mutual funds were liquidated as well.

Our International Trend Tracking Index (TTI) improved slightly but still remained below its long term trend line by -0.64%.

As I posted Friday, I will not issue an all-out sell signal until this indicator clearly stays below the trend line. By holding out a few extra days, I am hoping to avoid a potential whip-saw signal, should the markets suddenly return to rally mode.

The domestic TTI slipped a little but remains at +2.00%.

Stay tuned for further updates.

ETFs On The Cutline – Updated through 6/10/2011

Ulli ETFs on the Cutline Contact

The selling continued this past week and improving equity momentum numbers were nowhere to be found. Most of the ETFs we discussed in last week’s report disappeared from the radar by sinking below the -20 position. New ETFs dropped in from a level above the +20 reading and are threatening to break the trend line to the downside.

Here’s where some of the major index ETFs ended up:

IOO (S&P Global 100) +16

EFA (Foreign Large Blend) +11

BRF (Brazil Small Cap) +9

IWM (Russell 2000) +7

VEU (Foreign Large Blend All World ex-U.S.) -16

VEA (Foreign Large Blend Europe/Pacific) -18

Please note that the first 4 have not only triggered their trailing sell stops (DD% column) but are hovering above their long-term trend line (cutline) by less than 0.5%. Any further market slippage will push these indexes into outright bear market territory, just like it already happened with VEU and VEA.

Here’s this week’s report:

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Last Week’s Lessons: ETF News And Blog Posts

Ulli ETF News Contact

In case you missed it, here’s a summary of the topics that I posted to my blog during week ending on 6/12/2011.

Continued downward momentum pushed our International Trend Tracking Index (TTI) to the verge of a sell signal. Stay tuned for the latest blog updates as the new week gets underway.

My published Cutline tables and Model ETF Portfolios can give you an assist by indentifying weakness and strength in various market segments so that you can make better investment decisions by avoiding exposure in those areas that are trending down.

This week, we covered the following:

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Sunday Musings: ETFs In Outer Space

Ulli ETF News Contact

This is more of a personal story than one about hard hitting ETF facts.

You may have followed the current space flight, which left earth on June 7 from Kazakhstan. The spacecraft Soyuz was launched with 3 astronauts, a Russian, a Japanese and an American by the name of Mike Fossum.

The mission is to rendezvous with the space station and relieve the crew that has been orbiting for some 6 months. Their anticipated stay in space will also be about 6 months.

Mike Fossum happens to be a long-term reader of this blog and newsletter and is also a client. Before his departure, we discussed his adventure in space, and he assured me that he will have regular email access and will be able to send and receive email 3 times daily. As his time allows, he will be reading my musings about ETFs in outer space.

I got a brief note from him on Friday, after he had arrived at the space station, which said:

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ETF Leaders And Laggards – For The Week Ending 6/10/2011

Ulli ETF Leaders & Laggards Contact

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

Despite selling momentum continuing, there are always some ETFs, which buck the trend. This week, the winner was Russia and the loser was the Gold Miners. However, pressure remained in all areas, which makes this not the time to be a hero and do some bottom fishing.

Disclosure: No holdings

Which Investment ‘Style’ Will Give You The Best Returns?

Ulli ETF News Contact

A few days ago, MarketWatch featured an interesting research project titled “Wall Street’s Biggest Secret,” which showed some fascinating results. Let’s look at some highlights:

Wall Street has a wide array of mutual funds it wants to sell you. “Absolute return” this. “Midcap blend” that. “Small-cap growth” whatever.

Many brokers, advisers and salesmen will tell you that just the right mix of each one will give you a portfolio that’s “right for you,” with returns perfectly adjusted to your “risk tolerance.”

Phooey.

Before you invest a penny, listen to Bob Haugen.

He’s a former finance professor who’s spent half a lifetime studying the stock market. He’s written a number of books and papers, and is the co-author of remarkable piece of analysis entitled “Case Closed” and available here. Read the analysis .

He looked in excruciating detail at the characteristics of which stocks did best (and worst) over nearly half a century, from 1963 to 2007.

His finding?

Most of these “styles” are a waste of time. And the idea that you need to take on more “risk” to earn higher returns is a total con.

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