Hope For More Stimulus By Fed Chief Bernanke Stimulates The Major Market ETFs

Ulli Market Commentary Contact

Amazingly, today’s rebound was based on nothing but hope that the Fed’s Bernanke will pull another rabbit out of the hat this Friday via the mother of all stimulus proposals, which will solve all that ails the world.

The amount of bad news was small enough to stimulate markets around the globe in anticipation of what the Fed might come up with. My take is that it will be nothing spectacular with the result that hope will turn into disappointment.

In other words, if the Fed chairman doesn’t deliver the goods with the magnitude anticipated, the sell off could be ugly. This is not a forecast but simply my opinion at this point.

So far, it’s been a nasty August with the Dow and S&P 500 potentially facing their worst performance since early 2009, while the Nasdaq’s 11% slide, if it holds, will be its worst since October 2008.

Our Trend Tracking Indexes (TTIs) rallied as well and have reached the following distances from their respective long term trend lines:

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On The Road Again

Ulli Uncategorized Contact

I’ll be in planes and taxis for most of Monday and will not have a chance to write any blog posts or produce Tuesday’s ‘Mutual Funds on the Cutline’ report.

Regular posting will resume Tuesday afternoon PST with that day’s market commentary.

ETF Master Cutline List – Updated Through 8/19/2011

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Following the theme of continued flight to safety, this week’s ETF Cutline report confirms what the Leaders and Laggards table showed last Saturday: Precious metals and bonds of all durations reign supreme as we slipped further into bear market territory.

Only 39 ETFs are positioned above the cutline, while 353 hover below it. No equity ETFs are showing positive momentum figures; even the always reliable Consumer Staples (XLP) have dropped to the -8 spot.

If bonds are of interest to you, take a look above the cutline as there are several candidates that deserve further consideration. Be sure to drop down a few notches from the top listing, since some bond ETFs have crossed their trend lines to the upside by a significant margin.

Here’s the latest report:

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Last Week In Review: ETF News And Blog Posts To 8/21/2011

Ulli Market Review Contact

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 8/21/2011.

The S&P 500’s prior week’s loss of -1.7% now sounds like minor event as bearish forces gathered momentum and pushed this benchmark index down another -4.66% during the past five trading days despite Monday’s sharp rebound.

My global view has not changed, and I believe that these wide market swings are far from being over, although we could see a short rest period before the European debt crisis shifts into the next gear.

In any event, if you followed my sell stops rules, you should not have any equity exposure at this time with the possible exception of a couple of sector/country ETFs, or hedged positions.

This week, we covered the following:

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Buy-And-Hold Investing Is Dead

Ulli ETF News Contact

To me, buy-and-hold investing has been dead for decades, although there were temporary periods where it did well, as investment manager Barry Ritholtz explains in “Buy-and-Hold is dead; cash is king:”

To a generation of investors raised to believe in the power of owning stocks for the long run, Barry Ritholtz has a characteristically blunt message: Buy-and-hold investing is dead.

The classic investing strategy that worked wonderfully through the 1980s and 1990s has been losing potency over the past decade, Ritholtz points out, but old beliefs die hard. Yet die they must — if an investor hopes to weather the current stormy market climate and even take advantage of it.

Ritholtz, an investment manager, is chief executive of FusionIQ, a quantitative research firm, and also runs a popular blog about markets and investing called The Big Picture. The way he sees it, stock investors need to bury the past — and quickly.

“The time for buy and hold is during a secular bull market, like from 1982 to 2000,” Ritholtz said. “When you’re in a secular bear market, which we are in, I think of investors’ jobs as managing risk and preserving capital.”

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ETF Leaders And Laggards – For The Week Ending 8/19/2011

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:

Equity ETFs got bruised again last week, as the S&P 500 lost -4.66% over the past 5 trading days.

Again, the flight to safety was on; the top 3 ETF leaders remained the same but changed positions slightly. With continued market weakness supported by a global economic slowdown, the DJ Transportation ETF (IYT) confirmed that trend as the 4th worst performer on my list.

With the European crisis heating up, amongst widespread jawboning with no concrete solution, it’s interesting to note that the country representing Europe’s top economic engine, (EWG) implied to bail everyone else out, has its own economic problems as its last GDP number indicated hardly any growth.

As a result, it’s no surprise that EWG is the 3rd worst performer on the list, which does not bode well for throwing an assist to those countries in need of financial assistance.

To me, it simply means that trouble is brewing on the horizon, I just don’t know yet if Europe’s top can-kickers will be successful one more time by postponing the unavoidable (default) again.

Disclosure: Holdings in GLD, TLT