ETF Leaders And Laggards – For The Week Ending 9/2/2011

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:

While the past week produced increased volatility, the S&P 500 closed barely changed from the prior Friday.

Nevertheless, the sharp rebound during the first two trading days had an effect on the Leaders and Laggards listings, as some of our old favorites were replaced by several country ETFs that took top billing—at least for this moment in time.

BRF, EWZ, EZA and ECH were some of the leaders this week; however, their negative M-Index figures clearly indicate that more upside momentum is needed to make sure that this move was not just temporary.

On the Laggards side, things look weak as well, as the M-Indexes are deeply entrenched in bearish territory.

As I have posted repeatedly, given the current state of affairs, being on the sidelines or in hedged positions is the most sensible investment approach, until the major trends and more positive momentum figures point to a different and improved environment.

Disclosure: No Holdings in ETFs discussed

09-02-2011

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, September 2, 2011

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2011/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-9012011/

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Market Commentary

Friday, September 2, 2011

LOUSY JOBS REPORTS CLOBBERS MAJOR ETF INDEXES

While the change from last Friday’s close was only minor, it does not tell the entire story. A sharp rebound early in the week was completely wiped out as selling ahead of Friday’s jobs report indicated nervousness.

Rightfully so, as the shocking jobs report came out indicating that there was zero growth in August, while the unemployment rate remained at 9.1%. The major indexes dropped like a rock at the opening and never recovered.

Gold rallied over 3% on the day, while interest rates dropped, and our core holding PRPFX bucked the trend by gaining +0.22%. It was a good day to be hedged, as the short component SH gained +2.59% putting our hedge into the positive by +1.15%, as the matrix shows:

This was the kind of day where both, the long and the short positions gained, which I expected in this current environment. For comparison, our ETF equivalent of PRPFX did even better by gaining around +0.95%. As I have said before, the ETF equivalent usually holds up better in down markets, but at times lags during up markets.

Our Trend Tracking Indexes (TTIs) meandered with the markets and are hovering above and below their respective trend lines as follows:

Domestic TTI: +1.35% (last week +0.69%)
International TTI: -9.42% (last week -10.03%)

The international TTI remains stuck in bear territory, while the domestic version is still hanging tough above the line. Again, I like to see more upside momentum, before I will surrender and call a new domestic ‘Buy’ signal.

Not helping the horrific jobs report were new worries about the European debt crisis as Greece admitted that it is not hitting its spending and economic goals, which may mean that the rest of the EU may not throw any more good money after bad.

None of the major issues that ail the global economies have gone away, although by the sharp rebound during the past week of August, you might have thought differently. My view remains the same in that I believe that there is more downside risk than upside potential.

The events of today may put the Fed back on the spot as Wall Street is sure to howl for another assist. However, right now, there is a long weekend ahead of us before Wall Street returns fully staffed on Tuesday.

It remains to be seen, if there is more of a spillover effect, but chances are that increased volatility will be again on the menu next week.

Have a great Labor Day weekend.

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 Kent:

Q: Ulli: In reviewing the 8/30/11 update on portfolios, I noticed the open position of SH is down almost 8%.  I’m wondering if in your view, this qualifies it as a “sell,” under the 7% stop rule. Thanks, when you get a minute.

A: Kent: The hedge is there for a reason, which is to cover downside risk by being neutral while providing us with potential profit opportunities when the markets correct, such as today. Consequently, I don’t use 7% on the short side, but work mostly with the direction of my Domestic TTI.

Right now, we’re stuck in the middle, although today was a perfect day for the short position, and I will remove SH next Tue/Wed, after the Labor Day, when the effects of today’s jobs reports have been absorbed—assuming that the markets hold up.

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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, September 2, 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/2011/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-9012011/

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Market Commentary

Friday, September 2, 2011

LOUSY JOBS REPORTS CLOBBERS MAJOR ETF INDEXES

While the change from last Friday’s close was only minor, it does not tell the entire story. A sharp rebound early in the week was completely wiped out as selling ahead of Friday’s jobs report indicated nervousness.

Rightfully so, as the shocking jobs report came out indicating that there was zero growth in August, while the unemployment rate remained at 9.1%. The major indexes dropped like a rock at the opening and never recovered.

Gold rallied over 3% on the day, while interest rates dropped, and our core holding PRPFX bucked the trend by gaining +0.22%. It was a good day to be hedged, as the short component SH gained +2.59% putting our hedge into the positive by +1.15%, as the matrix shows:

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 9/01/2011

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, September 1, 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 for a few trading days.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken back above its long term trend line (red) by +2.17%.

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Uncertainty Ahead Of Jobs Report Pulls Equity ETFs Lower

Ulli Market Commentary Contact

The major market ETFs did an about face today as reports showed that economic activity is more or less entrenched in a sideways pattern. Additionally, caution remained ahead of tomorrow’s jobs report, which will be released prior to the market opening.

The big report of the day, the ISM manufacturing index, showed that manufacturing is still growing, but at rate that could be considered stall speed. Other economic data were not horrible, but sure don’t sound too encouraging with overall sentiment being one of concern.

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High Volume ETFs On The Cutline – Updated Through 8/31/2011

Ulli ETFs on the Cutline Contact

Since the last ETF Cutline report a week ago, the S&P 500 has rebound by +3.48%, but the change in momentum has not been enough to generate any new ETF prospects suitable as current investment material. Only 16 ETFs hover above the line in bullish territory, while 72 remain below it and on the bearish side of the equation.

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 table:

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