Mutual Funds On The Cutline – Updated as of 5/23/2011

Ulli Mutual Funds On The Cutline Contact

Yesterday’s sell off solidified the positions of bond funds above the cutline, while equity mutual funds succumbed to weakness in the markets. The outlook is not much different from equity ETFs, which I covered yesterday.

Last week’s equity weaklings (RYAZX, JAOSX, PRLAX, FAIRX) have now dropped off the cliff below the -20 position. Should the markets regain momentum, they will appear in the listings again once they work their way higher.

However, right now the markets are in correction mode, and a couple more equity funds bit the dust by moving below the cutline:

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Major Market ETFs Succumb To Bearish Pressures

Ulli Market Commentary Contact

In last Friday’s market commentary, I suggested that over-indebted countries like Greece, Ireland and Portugal, among others, can’t and eventually won’t pay back the burden of continuously shouldering the mother of all indebtedness.

While the ECB and most governments are still in denial of that fact, anxiety surrounding the euro zone debt drama increased over the weekend and global markets took a licking. Stocks and commodities sold off and, as is the case whenever a global crisis erupts, flight to safety prevails, which included investing in the no-good favorite whipping boy of the world, aka the for long dead declared U.S. dollar.

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ETFs On The Cutline – Updated through 5/20/2011

Ulli ETFs on the Cutline Contact

This past week’s rollercoaster ride was reflected on the equity side in the latest ETF Cutline report.

More weakness than strength contributed to some slipping and sliding with the exception of the bond arena, which better maintained upward momentum. No surprise there, as bonds tend to rally when equities begin to soften. As in the prior week, more slippage occurred with international/country ETFs:

Japanese stocks (JSC) from +18 to -14

Vanguard Pacific (VPL) from -9 to -16

Brazil (BRF) from -11 to -20

Diversified Emerging Markets (EEB) remained in the -19 spot

Bucking the trend was the Chinese ETF (FXI), which rallied from -12 to +18

As I posted in “How do I use the ETF Cutline Table to make a Buy decision,” just because an ETF rallies above its trend line, does not mean it’s a buy. If you missed it, take a look at the link for details on what to look for before pulling the trigger.

Here’s this week’s report:

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Looking Back to Look Ahead: ETF News And Blog Posts

Ulli Trend Tracking Contact

In case you missed it, here’s a summary of the topics that I posted to my blog during week ending on 5/20/2011.

More of the same sloppy trading, as in the prior week, left the major indexes range bound with the S&P 500 losing 5 points.

My published Cutline tables and Model ETF Portfolios can give you an assist by indentifying weakness and strength in various market segments so that you can make better investment decisions by avoiding overexposure in those areas that are trending down.

This week, we covered the following:

“Reader Q & A: How Do I Use The ETF Cutline Table To Make A Buy Decision?”

“ETF Leaders And Laggards – For The Week Ending 5/20/2011”

“Reader Q & A: How Do I Start Investing With Your ETF Model Portfolios?”

“ETF/No Load Fund Tracker For Friday, May 20, 2011”

“Weekly StatSheet For The ETF/No Load Fund Tracker – Updated Through 5/19/2011”

“High Volume ETFs On The Cutline – Updated Through 5/18/2011”

“What Is A Secular Cycle?”

“6 ETF Model Portfolios You Can Use – Updated through 5/17/2011”

“Battle Of The Titans: Soros Sells Gold ETF While Paulson Buys – Who’s Right?”

“Mutual Funds On The Cutline – Updated as of 5/16/2011”

“First Latin American Bond ETF Launched”

“ETFs On The Cutline – Updated through 5/13/2011”

Reader Q & A: How Do I Use The ETF Cutline Table To Make A Buy Decision?

Ulli Reader feedback Contact

Reader Joe had the following question in regards to the best use of the ETF Cutline tables:

I’ve been reading your material and was wondering how far past the cutline into the positive do you go to initiate a buy?  Or do you then just put those ETFs on your radar and use other criteria to decide?  Thanks for the help.

Let me first point out again, that the real value of the ETF Cutline concept is at the beginning of a buy cycle when just about all equity ETFs are gathering momentum and are crossing the cutline (long-term trend line) to the upside.

With this bull market being over 2 years old, all worthwhile equity investment decisions have been made and much has played itself out. However, there are still isolated sectors/countries, which are crossing to the upside now after having rotated back and forth during this buy cycle.

Yes, you can and should use the cutline crossing as a sign to initiate a buy for new money. However, there are a few things you need to consider.

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ETF Leaders And Laggards – For The Week Ending 5/20/2011

Ulli ETF Leaders & Laggards Contact

Here are this past week’s top 5 winners and losers from my High Volume ETF Master List:

In a repeat performance, the international TTI (Trend Tracking Index) has shown more weakness than the domestic one. This is clearly confirmed again by the worst performers of the bunch with 4 out of 5 being country ETFs.

Disclosure: No holdings