Bouncing In A Narrow Range

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

The major indexes, as well as equities in general, struggled through the session looking for some footing to use as a launching pad for the usual mid-day rebound. It worked for a while, as the unchanged line was conquered but upward momentum faded, and we closed in the red, although only fractionally. Earnings season got underway with the first batch of the banking sector reporting. Things were mixed so far, and the Financial sector ETF (XLF) dipped -0.76%.

The Transportation ETF (IYT) moved solidly higher with a gain of +0.67%. Second place went to the Dividend ETF (SCHD) with +0.13% followed by MidCaps (SCHM) with a meager +0.08%. The downside came into play today, but the losses were tiny. Semiconductors (SMH) gave back -0.21% while LargeCaps (SCHX) surrendered -0.15%. All in all, it appeared to be a market in waiting looking for a reason to bounce higher.

Treasury yields retreated again with the 10-year giving back 2 basis points. This helped the 20-year bond (TLT), which rallied +0.43%, to make up for some recent weakness. Gold attempted again to recapture its $1,300 level but fell short. Not falling short was the US Dollar (UUP), which bounced off its recent low in a successful attempt to stay above its 50-day M/A.

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More All-Time Highs

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

Despite the Fed’s minutes from its September meeting, including words of caution among policy makers in regards to the next interest rate hike, market odds spiked that the widely expected December hike would materialize. Further notes indicated that it might take longer than anticipated to get inflation back to the Fed’s 2% target, and so on…

While the three major indexes were stuck at the unchanged line leading up to the release of the FOMC minutes, in the end, it was up, up and away as we levitated into record territory—again. It’s all based on hope, as odds of Trump’s tax reform are decreasing with the “Corker feud” continuing in full swing.

ETFs had a good day with most of our holdings closing in the green. Heading the pack to the upside were Semicondcuctors (SMH) with +0.71% while International Equities (SCHF) and Transportations (IYT) showed solid gains with +0.44% and +0.41% respectively. Sporting red numbers on the session were Aerospace & Defense (ITA) and US SmallCaps (SCHA) with modest losses of -0.26% and -0.03%.

Treasury yields fell again with the 10-year giving back 2 basis points to end the day at 2.35%. Gold continued its recovery, while the US dollar (UUP) extended its losses by giving back -0.29%.

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Dow Registers Another Record Finish; FOMC Minutes And Earnings Season On Deck

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

And the beat goes on. The major indexes shot up right after the opening bell, retreated during mid-day and rallied into the close but with only the Dow managing to squeeze out another record; its 47th for 2017. A big assist came from Walmart (WMT), which gained +4.43% on the day and produced the biggest boost on the Dow.

In ETF space, green was the dominant number with Emerging Markets (SCHE) being the leader with a gain of +0.99%, which was closely followed by International SmallCaps (SCHC) adding +0.95% and International Equities (SCHF) logging in +0.84%. The only red we saw was with Aerospace & Defense (ITA), which surrendered a negligible -0.04%.

The 10-year yield pulled back 2 basis points to close at 2.35%. Gold and crude oil popped while the US dollar (UUP) dropped (-0.53%). UUP is now in danger of breaking its 50-day M/A to the downside, which would mean a resumption of the bearish trend.

The main focus for the remainder of this week will be the release of the FOMC minutes from the September meeting. As always, should the interpretation be more hawkish (higher rates) than assumed, increased volatility may visit equity markets again. The other focal point will be the beginning of third quarter earnings season, and we will find out if the current elevated prices of equities are justified.

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Drifting Below The Unchanged Line

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

With bond markets closed today, equities lacked direction and meandered below the unchanged line with downward momentum accelerating late in the session. However, in the end, the losses for the major indexes were relatively minor.

The biggest losers were retailers, financials and healthcare, the latter of which suffered from weekend reports that Trump would seek to loosen regulations, which could lead to lower premiums. That would be a good thing for the population but a bad thing for companies’ profits.

In the ETF arena, the picture was mixed. We saw Semiconductors (SMH) outperform by gaining +0.73%, with Aerospace & Defense (ITA) logging it second place with +0.19%. Leading to the downside was US SmallCaps (SCHA) with -0.35% while MidCaps (SCHM) followed closely behind with a loss of -0.26%.

Gold had an up day, but still hovers below its $1,300 level. Oil rallied but failed to break above its $50 marker, while the US Dollar (UUP) traded in a tight range and ended up losing -0.16%.

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One Man’s Opinion: China Catalyst To Send Gold Over $10,000 Per Ounce?

Ulli Market Review Contact

By GoldCore

Jim Rickards is on record forecasting $10,000 gold.

But is China about to provide the catalyst to send gold even higher? And by how much?

Today, we fare forth in the spirit of speculation… follow facts down strange roads… and arrive at a destination stranger still…

China — the world’s largest oil importer — struck lightning through international markets recently.

According to the Nikkei Asian Review, China has plans to buy imported oil with yuan instead of dollars.

Exporters could then exchange that yuan for gold on the Shanghai Gold Exchange.

Not only would the plan bypass the dollar entirely… it would restore gold’s role in international commerce for the first time since 1971, when Nixon hammered the last nail through Bretton Woods.

If the rumors hold true, China’s plan could enter effect by the end of this year.

Billionaire business magnate and sound money advocate Hugo Salinas Price ran China’s plan through his calculator.

It turned up a basic math problem that spells drastically higher gold prices — if the plan is to work.

Details to follow.

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ETFs On The Cutline – Updated Through 10/06/2017

Ulli ETFs on the Cutline Contact

Below please find the latest High Volume ETFs 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 366 High Volume ETFs ETFs, defined as those with an average daily volume of more than $5 million, of which currently 269 (last week 283) 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.