Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 12/23/2021

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, December 23, 2021

Methodology/Use of this StatSheet:

1. From the universe of over 1,800 ETFs, I have selected only those with a trading volume of over $5 million per day (HV ETFs), so that liquidity and a small bid/ask spread are assured.

2. Trend Tracking Indexes (TTIs)

Buy or Sell decisions for Domestic and International ETFs (section 1 and 2), are made based on the respective TTI and its position either above or below its long-term M/A (Moving Average). A crossing of the trend line from below accompanied by some staying power above constitutes a “Buy” signal. Conversely, a clear break below the line constitutes a “Sell” signal. Additionally, I use an 8% trailing stop loss on all positions in these categories to control downside risk.

3. All other investment arenas do not have a TTI and should be traded based on the position of the individual ETF relative to its own respective trend line (%M/A). That’s why those signals are referred to as a “Selective Buy.” In other words, if an ETF crosses its own trendline to the upside, a “Buy” signal is generated. Since these areas tend to be more volatile, I recommend a wider trailing sell stop of 8%-10% depending on your risk tolerance.

If you are unfamiliar with some of the terminology, please see Glossary of Terms and new subscriber information in section 9.     

1. DOMESTIC EQUITY ETFs: BUY — since 07/22/2020

Click on chart to enlarge

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) has now rallied above its long-term trend line (red) by +5.19% and remains in “BUY” mode as posted.

Read More

Santa Claus Rally: S&P 500 Scores New Record

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

Optimism, that global economies may not become derailed as feared, contributed to the major indexes not only stringing together a 3-day win streak but also the S&P 500 scoring another record close.

The gains were broad with value, growth (tech) and SmallCaps all participating with similar advances. The only fly in the ointment was that volume was low due to the upcoming Christmas weekend and tomorrow only featuring a shortened trading session.

Explained Jim Paulson of the Leuthold Group:

“Much of the stock market’s rally this week is due to overdone fears last week and a palpable sigh of relief the selling finally stopped. Once the market turned higher, dip-buyers not wanting to miss out on a Santa Rally have taken charge.”

Despite worsening inflation, some of the economic data did not show any outliers. New home sales jumped despite massive October downward revisions, initial jobless claims are bouncing around at pre-Covid lockdown levels, while personal income and spending showed increases in November.

Even though stocks have rallied sharply, long bond yields have not been keeping up and have not been able to take out their “omicron” highs, as ZeroHedge pointed out in this chart. The US Dollar, while attempting a breakout, fell short as well and stair stepped to its lowest level since the beginning of this month.

Gold recovered from its recent pullback and finally managed to break above its $1,800 level after gaining 0.94% yesterday and 0.43% today.

I will post the weekly StatSheet tonight but will not report on tomorrow’s shortened session. I’ll be back for Monday’s commentary.

Merry Christmas!

Read More

Bounce-Back Tuesday

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The futures markets already indicated last night that green numbers might appear during today’s day session. That’s exactly how it turned out with the Dow sprinting ahead by some 300 points, a lead that slowly and steadily grew larger as the day progressed.

The other two major indexes joined the party with the Nasdaq taking the lead and sporting a gain of 2.40% at the close. With that much upward momentum, I did not execute the planned sale of the one ETF that had penetrated its trailing sell stop, because it thrust higher by over 2.5%.

Today’s rebound was a nice beginning after a 3-day losing streak, which is now in the rearview mirror. Traders finally caught on to the fact that the omicron variant may be highly infectious but induced illnesses remain mild. Hmm, makes me wonder if the arrival of the flu season has something to do with it?

Today, the short squeeze was back in “on-mode”, as apparently someone must have had fun by pushing the on/off switch over the last week, as Bloomberg/ZeroHedge point to in this chart.

Bond yields popped with especially the 20-year demonstrating a wild ride, most likely due its auction today, while the 10-year was far more stable. The US Dollar bounced around but remained in his trading range of the past couple of days and held tight to its unchanged line.

Europeans (EU) are facing a very cold winter in more ways than one. Their natural gas prices exploded to record highs today. To put this spike in context, ZeroHedge posted this chart from Bloomberg showing that the EU gas trades at an oil barrel equivalent of over $350!! Ouch.

Could you imagine what life with $350/barrel of oil would be like?

I won’t have a chance to write tomorrow’s report, but I will be back on Thursday to post the weekending version.

Read More

Tug-Of-War: Omicron Vs. Santa Claus

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

My somewhat humorous headline contains some truth in that hope for a Santa Claus rally is alive and well but has been met with resistance due to intensifying omicron fears with a resurgence in the number of Covid cases, which have been blamed on the variant.

To be clear, the Santa Claus rally may still materialize, as “Stock Trader’s Almanac” considers it to be the period including the last five trading days of the year and the first two trading days of January. That means, all hope is not yet lost.

Today was simply a continuation of Friday’s slam with dip buyers again being conspicuously absent. Commented Jim Paulsen of the Leuthold Group:

The downward move in markets “reflecting growing uncertainty surrounding whether the Omicron surge will bring new widespread economic shutdowns, an unexpected shelving of additional fiscal stimulus from President Biden’s Build Back Better plan, and a breach by the S&P 500 index of its 50-day moving average.”

Today, there was no place to hide, because growth, value and SmallCaps were equally hammered, as was the tech sector in general. Even the low volatility SPLV ETF was not able to withstand the selling and gave back -0.31%.

The major indexes swooned in unison and bounded off their worst levels of the session, but it was not nearly enough to even think about a green close. Interestingly, the S&P 500 closed today within 1 point of where it started the month of December, so not much has been gained or lost during this period, despite the index having just suffered its biggest 3-day drop since May.

The most shorted stocks surrendered Friday’s victory, as ZeroHedge pointed out, while the US Dollar was not able to build on its recent gains and ended up bouncing lower. Gold held steady for most of the morning, that is until the bears put another nail in the coffin and sent the precious metal down -0.81%.

Read More

ETFs On The Cutline – Updated Through 12/17/2021

Ulli ETFs on the Cutline Contact

Below, please find the latest High-Volume ETF Cutline report, which shows how far above or below their respective long-term trend lines (39-week SMA) my currently tracked ETFs are positioned.

This report covers the HV ETF Master List from Thursday’s StatSheet and includes 312 High Volume ETFs, defined as those with an average daily volume of more than $5 million, of which currently 151 (last week 175) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line (%M/A) from those that have dropped below it.

Take a look:                                                                   

The HV ETF Master Cutline Report

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms. If you missed the original post about the Cutline approach, you can read it here.      

ETF Tracker Newsletter For December 17, 2021

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

DIVING INTO THE WEEKEND

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

As anticipated, volatility reared its ugly head and sent the markets on another roller coaster ride. Despite a variety of rebound attempts, the bulls were not able to achieve a green close, as the bears prevailed with the major indexes tumbling. Even a short squeeze could not change the negative directional tone.

The Dow fared the worst, followed by the S&P 500, but the Nasdaq managed to cling to its unchanged line yet, in the end, closed a tad below it. $4.3 trillion in options expirations took their toll, but the losses were moderate given that we are still within a few percentage points of the all-time highs.

For the week, the markets ended down with the S&P 500 surrendering some 1.9%, the Dow dropping 1.7%, while the Nasdaq was hit the worst and tanked nearly 3%. Of course, volatility may stay with us throughout the remainder of the year, as falling trading volumes tend to cause a choppier environment.

Bond yields slipped on the week, the US Dollar swung wildly but, in the end, closed higher. Gold rallied after showing weakness on Monday through Wednesday but picked up strong upward momentum, which propelled higher for the past trading days but left it a tad short of breaking its $1,800 level.

The Fed’s hawkishness and traders’ expectations of higher interest rates, even though none are planned as an immediate solution to fight inflation, are keeping the level of uncertainty high, which likely means more treading water ahead.  

Read More