Fed Chief Disappoints – Major Market ETFs Slide

Ulli Market Commentary Contact

Yesterday’s rally ran into resistance, as an early bounce turned into an afternoon fade disappointing those that had hoped for more follow through to the upside.

Fed Chief Bernanke’s speech sent the markets lower, as he offered no tangible details as to the assist he could provide in boosting the economy. Wall Street’s high expectations simply turned into disappointment.

Unless, President Obama pulls a rabbit out of his hat during his speech tonight, more disappointment could be a drag on the indexes tomorrow.

The news out of Europe was mixed, but the markets were higher, as the ECB left interest rates unchanged and acknowledged that growth is slipping.

Our Trend Tracking Indexes (TTIs) headed lower as well and are positioned as follows:

Domestic TTI: +1.86%

International TTI: -9.98%.

Domestically, we are still sitting in no man’s land waiting for a clear trend to emerge in order to make a better determination as to whether the bullish phase will continue or if the bears will finally get the upper hand.

Chart courtesy of MarketWatch.com

High Volume ETFs On The Cutline – Updated Through 9/7/2011

Ulli ETFs on the Cutline Contact

Despite yesterday’s strong rebound, the S&P 500 is still down by -1.64% from last week’s HV Cutline report. This is reflected by the number of ETFs above the trend line, which have dropped to 14 (last week 16), while 74 ETFs hover below it, which means they’re still stuck in bear market territory.

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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A Relief Rally For Equity ETFs

Ulli Market Commentary Contact

After 3 days of relentless selling, which caused the S&P 500 to lose -4.43%, it was time for a relief rally or possibly a dead cat bounce. The index managed to make up some of the recent losses by gaining +2.86% on the day as the chart, courtesy of MarketWatch.com, shows.

There were several supporting actors lending an assist as the rally got underway. The most important one was today’s ruling by Germany’s highest court that rescue packages for debt ridden countries are legal, but need to be approved in the future by a parliamentary panel. Translation: We are now in a position to legally throw more good money after bad; after all, Greek 1-year bonds are now yielding 98%…

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7 ETF Model Portfolios You Can Use – Updated through 9/6/2011

Ulli Model ETF Portfolios Contact

In a reversal from the prior week, the S&P 500 managed to lose -3.96% since my last ETF Model Portfolio report on 8/31/11. Despite that drop, 5 of our 7 portfolios gained, while one stayed unchanged and one lost slightly.

The reason is that, due to our sell stop discipline, we have gotten rid of all volatile positions and have held on only to those that are in tune with current market momentum. In the case of our #3 portfolio (aggressive growth), that has meant being invested in only bonds and gold, which happen to be the star performers at this time.

Despite having given back a fraction of a percentage last week, the #7 portfolio (ETF equivalent of PRPFX) continues to be the top dog and is holding up very well during severe market corrections.

Take a look at this week’s report:

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Major Market ETFs Head Lower, But Damage Is Limited

Ulli Market Commentary Contact

At the open, the markets looked downright ugly as the Dow was briefly down some 300 points before a slow rebound cut into the early losses.

Financial stability in Europe, or the lack thereof, along with a fallout from Friday’s poor unemployment numbers combined to support the bearish case for the moment. Yesterday’s pounding of the European markets caused by worries about a possible Greek default, which might threaten the solvency of a number of European banks, set the tone for today’s opening.

Well, if you missed it, Greek 1-year bonds are generating a yield of over 80%. Does anyone really think they won’t default?

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Precious Metal ETFs Remain The Leaders; ETF Master Cutline List – Updated through 9/2/2011

Ulli ETFs on the Cutline Contact

Another volatile week did little to change the ETF Master Cutline list, as now 47 ETFs hover above the line, while 349 remain below it and in bear market territory.

The leaders are similar to last week in that Precious Metal ETFs still take top billing followed by bond ETFs of all different durations. No surprise there, as last Friday’s sell off pushed the 10-year bond rate below the 2% level for the first time.

Continuously lower interest rates are a sign that all is not well in economic wonderland, and we will most likely have to face some kind of fallout from the poor jobs report after the holiday weekend.

Take a look the latest report:

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