7 ETF Model Portfolios You Can Use – Updated through 11/1/2011

Ulli Model ETF Portfolios Contact

Just as the European debt crisis seemed to have been brought under control, the Greek PM threw a wrench in the agreement by announcing a referendum to be held later on this year to decide on the bailout proposal. I commented on this latest development more extensively in yesterday’s market commentary.

The markets, as measured by the S&P 500, gave back over 5% in the past 2 trading days, which affected our portfolios as well, but not as severely due to our high cash/bond positions:

Here is the latest update:

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Striking a Tragic Fate – Are Equity ETFs Destined for a Downfall?

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[Chart courtesy of MarketWatch.com]

As the situation in Europe unfolds, equity ETFs tumbled once again as the S&P fell 2.79%. And after a period where it looked like volatility was falling, the risk switch has turned back on again, with the VIX rising 16.05% to 34.77.

Also, the dollar improved against the Euro to end the day at $1.37/Euro. We might’ve been approaching bull range, but uninspiring economic indicators and political frictions in Europe suggest we won’t be making much headway any time soon.

Just when the European crisis appeared to be improving, the emergence of the Greek referendum has put a nail in the coffin. Letting the public decide whether or not to accept the bailout can have a destabilizing impact, if it’s rejected. The bottom line is that Greece completely lacks credibility and is becoming the laughing stock of the EU. But the joke isn’t funny anymore.

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Equity ETFs Get Spooked As European Fears Remain

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

After a stellar performance for equities last week, Halloween scared off investors to make markets end the month on a low note. Major indexes took a sizeable dip, with the S&P 500 falling 2.47%. Also, after recent dollar weakening, the dollar came back up to $1.38/Euro. Most startlingly, the VIX jumped a staggering 22.14%, nearly hitting the 30 mark.

It was about time that markets seriously considered Europe’s bailout funding uncertainty after last week’s seemingly irrational exuberance. Sure, Europe finally made some progress last week, but a concrete EFSF funding plan still doesn’t exist. That’s enough reason to continue exercising major caution.

Greece still isn’t completely resolved as it enters a contentious political debate surrounding whether or not it will accept its bailout package as PM Papandreou called a referendum.

Essentially, the perception that Greece may have been saved is seriously up in air. Even more surprising, most Greeks are against the bailout package. Last week’s equity ETF jubilation just might be undone soon if we the reach the final act of this Greek tragedy sooner than expected.

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More Domestic Equity ETFs Have Entered Bullish Territory

Ulli Trend Tracking Contact

With a record October for equities, despite Europe’s questionable financial state of affairs, domestic ETFs have become increasingly attractive, rising well above their long-term trend lines, sneaking into bullish territory.

Whereas in the past couple weeks, I was limiting myself to selected sector ETFs, besides my established position in bond ETFs, the technicals warrant some domestic ETF exposure as well.

The S&P 500 just cracked its 200-day MA, which is currently a tad over 1,274, its highest level since mid-August. Meanwhile, other domestic ETFs have crossed above their trend lines as well.

Although our International TTI is still negative (-2.06%), its domestic cousin has powered deeper into positive territory, sitting at +3.31% as of Friday. In other words, if you are looking for market exposure, it’s the time to consider some domestic equity ETFs for your portfolio, at least according to my trend tracking rules.

This push by the bulls has had a great impact on my Master ETF Cutline Report, which now features 160 ETFs above the line and 237 below it.

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Last Week In Review: ETF News And Blog Posts To 10/30/2011

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In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 10/30/2011.

The markets continued to feed on Europe’s mother of all debt deals designed to solve broad issues after a 50% haircut agreement was reached. However, worries persist, and rightfully so, that the execution of the new master plan may be questionable as more details become available.

Nevertheless, upward momentum has improved and put our Domestic TTI back into ‘Buy’ mode as posted last Monday.

I have begun to ease into some equity ETF positions subject to my trailing sell stop discipline with full awareness that all is not well in the Eurozone. To my way of thinking, only more time has been bought without real changes to structural issues.

Still, the trend is up, and we’ll carefully follow its direction.

This week, we covered the following:

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The Real Scoop on Europe: In Pictures and Words

Ulli Market Commentary Contact

Markets reacted with great exuberance to EU leaders finally come up with some sort of debt crisis resolution. Although this provides some temporary relief, the long-term view still looks dour. If you seem unconvinced, take a look at this frightening interconnected web of European debt exposure.

It’s clear that the current Eurozone package has only pushed out liabilities for another several months. Greece remains in the danger zone and the Italian situation is getting increasingly out of hand. A mere EFSF leveraging is no guarantee that the debt burden will be resolved and the search for outside funding reveals Europe’s lack of internal financial firepower.

Check out the video below from the Guardian to get an idea of how the European debt crisis is a storm that will continue to rage on, keeping the possibility of contagion very much alive.

http://www.guardian.co.uk/business/video/2011/oct/27/european-debt-crisis-video-analysis