I will post a special ETF market update later on this afternoon once the figures for the Domestic TTI (Trend Tracking Index) have become available.
Look for it by about 5 pm PST.
Ulli…
Market Review – High Volume ETFs On The Cutline – Updated Through 8/3/2011
The drubbing of the markets since the last High Volume ETF Cutline report, with the S&P 500 losing some 3.5%, did not help the ETFs positioned above the cutline, as many lost momentum and succumbed to bearish forces.
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.
As a result of last week’s spanking, we now have only 25 ETFs positioned above the cutline, and in bullish territory (down from 54), and 65 below and in bearish territory (up from 34).
Yesterday’s market reversal saved the day thanks not to great economic news but merely to rumors that top Fed officials were considering support for more monetary easing. Sure, strength in the Nasdaq helped, but after relentless selling for 8 days, the markets have become somewhat oversold and a bounce, for whatever reason, was a natural reaction.
All eyes are on Friday’s jobs report, which will be scrutinized for any positives, if they can be found. Absent of those, it is pretty clear that the economy has stalled, and the markets have simply reacted accordingly.
Here’s the current HV ETF Cutline table:
Now 7 ETF Model Portfolios You Can Use – Updated through 8/2/2011
The moment the battle over the debt ceiling was settled, the markets headed south on the ever increasing awareness that all is not well in economic wonderland, and that the much hoped for second half recovery may very well be a pipedream.
Our ETF model portfolios were affected by these selloffs, but some held up better than others. This is the type of environment, which is well suited for my #1 Trend Tracking Portfolio, which is built around the core holding in PRPFX. It would have held on to the #1 spot, had I not added the #7 portfolio, which represents the ETF equivalent of PRPFX. The YTD performance is simply superior.
It’s been an interesting 2 trading days so far, with the S&P 500 going negative YTD, so take a look at the changes over the past week:
Major Market ETFs Break Support Levels
Life after the completion of the endless debt ceiling debate proved to be a challenge for Wall Street, as finally the economic reality sank in that all is not well with the alleged 2nd half recovery.
With today’s sharp selloff, serious technical damage was done, as widely watched major trend lines were violated, which could invite more selling. Especially disheartening was the fact that we closed at the lows of the day, as the chart above (courtesy of MarketWatch.com) clearly shows.
Here are some of the widely followed indexes and the percentages by which they have moved below the line and into bear market territory:
Market Review – Mutual Funds On The Cutline – Updated as of 7/29/2011
Indications of a deal to raise the debt ceiling had the futures market soaring prior to Monday’s opening. Well, the euphoric rebound actually happened, but it turned out to be short lived, as the major market ETFs staged a 180 degree reversal, only seen 10 times since 1985, and a steep sell off ensued.
It was simply a violent display of volatility, as the S&P 500 plunged through its 200-day moving average of 1,285. Thanks to bottom fishing, the indexes recovered, with the
S&P 500 closing back above this dividing line between bullish and bearish territory. It could have been a lot worse, as a weak manufacturing report took the starch out of a solid opening rebound.
The overall downtrend of the past week made its mark on the mutual fund cutline table as many funds continued to slip. Due to data unavailability, the following cutline report is updated through Friday, July 29th.
This week, there are 442 funds located above the cutline and 427 below it. I am showing the first 250 on the bullish side and the first 100 on the bearish side:
Take a look:
Expanded ETF Master Cutline List – Updated through 7/29/2011
With the markets having sustained losses for 5 straight days, it’s no surprise that the number of ETFs hovering above the cutline has been severely reduced from the prior report.
This week, there are 188 ETFs listed above the cutline (down from 321) and 208 below it (up from 75), which is a clear indication of a change in market direction. Whether that will be sustained is still wide open and currently depends on the outcome of the debt ceiling debate. As I am writing this (Sunday afternoon), indications are surfacing that a compromise across party lines indeed may have been reached, but the final word has not been spoken yet.
Should this compromise materialize, we will certainly see a euphoric reaction rebound on Wall Street. However, how long this will last in the face of the recent poor GDP news, while a questionable jobs report is lurking on the horizon, is the big unknown.
Even as Wall Street got clobbered, some ETFs have resisted the selloff, as you can see in this new expanded ETF Cutline report: