ETF Tracker Newsletter For September 15, 2017

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ETF Tracker StatSheet

https://theetfbully.com/2017/09/weekly-statsheet-etf-tracker-newsletter-updated-09142017/

MISSION ACCOMPLISHED: S&P 500 CONQUERS ITS 2,500 LEVEL

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

As we have become accustomed to, news reports, that should affect markets negatively, were ignored as the major indexes continued relentlessly higher with the S&P managing, at the very last minute, to close above its 2,500 marker for the first time.

The latest N. Korean missile test was shoved aside as were economic reports that were anything but comforting. First, there were retail sales, which tumbled in August -0.2% MoM with, surprisingly, online sales slumping. At the same time, July’s gains were revised and cut in half. The August industrial production numbers crashed the most since May 2009 as auto sales collapsed. Completing the trifecta of bad reports was a slipping consumer confidence index.

ZH summed up this week best:

  1. Hurricane Irma crushes Florida
  2. North Korea test fires ICBMs across Japan (again)
  3. Economic data misses across the globe (China and US most notably)
  4. Terrorism in UK and France

And the result – drum roll please – new record highs for the Dow, the S&P, and the Nasdaq… with the Dow’s best week of the year! Go figure…

In ETF space, Semiconductors (SMH) took top billing today by gaining +1.32% with Emerging Markets (SCHE) occupying a distant 2nd place with +0.70%. On the downside, we saw only one red number and that was Transportations (IYT), which lost -2.00%.

Interest rates ended the day unchanged, gold slipped again, and the US dollar (UUP) lost -0.33% on the day but managed to eke out a gain for the week. Nevertheless, its YTD downtrend remains intact, and the loss is now over 11%.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 09/14/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, September 14, 2017

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 a 7.5% trailing stop loss on all positions in these categories to control downside risk.

  1. 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 7.5% -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 4/4/2016

Click on chart to enlarge

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) is positioned above its long-term trend line (red) by +2.77% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Weak Economic Data Keeps Markets In Check

Ulli Market Commentary Contact

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

While the Dow managed to close in the green for the 3rd straight session in a row, the broader market sagged a little based on weak retail shares that had the sector (XRT) giving back -0.72%. A couple of other numbers did absolutely nothing to instill confidence in an already declining economy.

Consumer prices jumped 0.4% MoM in August, which was the biggest spike since the beginning of 2017. YoY, the CPI still remains below the Fed’s goal of +1.9%, but that may very well change. Adding insult to injury were real hourly earnings, which plunged 0.6% last month—not exactly a combination that promotes the warm fuzzies when it comes to consumer spending.

In regards to our ETF holdings, gains and losses were just about equally weighted. Leading the pack were Aerospace & Defense (ITA) with +0.52% with Semiconductors taking second place with +0.44%. Closing modestly in the red were Transportations (IYT) and SmallCaps (SCHA) with -0.33% and -0.12% respectively.

Interest rates remained unchanged, but the 20-year Bond (TLT) managed to eke out a gain of +0.41% after 3 days of losses. The US Dollar (UUP) bucked its 3-day uptrend and gave back -0.29% while Gold (GLD) rose +0.44%.

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Late Buying Pushes Markets Into Record Territory

Ulli Market Commentary Contact

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

The respective unchanged lines appeared to be the magnet for the major indexes throughout most of the session, as they bounced above and below it until late buying pushed them into the green for good, and we registered another record close. The gains were tiny, but they were gains nonetheless.

As the chart above shows, upward momentum stalled and it looked like traders were searching for a catalyst to drive stocks higher. Energy (XLE) and Consumer Discretionaries (XLY) led the charge with gains of +1.27% and +0.70% respectively. Across our holdings, the Dividend ETF (SCHD) performed best with +0.21%, while the Emerging Markets (SCHE) fared the worst with -0.62% resulting in an “unchanged” condition for most of our portfolios.

Interest rates continued their recent trend reversal with the 10-bond yield crawling 3 basis points higher to 2.20%, which is quite a turnaround from the recent September lows of 2.05%. Suffering from that event is the 20-year bond ETF (TLT), which continued its slide by losing another -0.39%. The US Dollar Index (UUP) headed north by closing up +0.59%, which is not only its 3rd straight day of gains but its largest in 9 months. However, when looking at the chart, it still looks to me like a dead cat bounce.

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Extending The Rally

Ulli Market Commentary Contact

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

After yesterday’s massive rebound, the major indexes continued with their bullish theme supported by Treasury Secretary Mnuchin’s words that he’s hopeful a tax overhaul can be accomplished by the end of the year. He also hinted that they’re considering backdating any reform to the beginning of 2017. That’s all it took, and stocks ended at record highs, although in zigzag fashion, however, without ever touching the unchanged line.

The Dow ended in the green, but would have done so with far more conviction had it not been for weakness in McDonalds (-3.22%) and Apple (-0.40%), the latter of which managed to wipe out most of its early losses, as the new iPhone launch could not meet hyped up expectations as problems with the facial recognition feature and delayed ship dates were found to be upsetting.

In the ETF equity arena, we saw SmallCaps (SCHA) take the lead with a gain of +0.67%, with Transportations (IYT) taking a close second by adding +0.61%. Emerging Markets (SCHE) and Aerospace & Defense (ITA) showed the only red numbers, namely –0.07% and -0.21% respectively.

The dead cat bounce in Treasury yields continued with the 10-year rising 3 basis points to 2.17%. That took the bullish steam out of the 20-year bond price (TLT), which sank -0.53%. The US dollar index (UUP) traded in a tight range and gave back a modest -0.04% joined by gold, which retreated -0.22% to close at $1,333.

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Hurricane Irma Strikes…Markets Rally

Ulli Market Commentary Contact

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

Sure, why not? After hurricane Harvey’s strike in Texas, which is still trying to get a handle on the amount of devastation and costs to rebuild, Irma struck Florida this weekend wreaking havoc in many parts, but the hit turned out to be less forceful than expected. That fact, combined with N. Korea failing to conduct another missile test, was the enough to send stocks sharply higher with the Dow notching its biggest gain in 6 months.

It did not matter that some 6 million people are without power, and the damage caused may end up being the worst disaster in American history, equities soared, and the major indexes all scored in excess of 1% and never looked back after a huge opening gap.

Leading the charge among our most widely held ETFs were Semiconductors (SMH) with +1.82% followed by Aerospace & Defense (ITA) and Emerging Markets (SCHE) gaining +1.15% and 1.14% respectively. All others closed in the green as well with the laggard being International SmallCaps (SCHC) adding only +0.32%.

Interest rates rose, bucking their 2-month downtrend with the 10-year bond yield gaining 8 basis points to close at 2.14%. As a result, the 20-year bond gave back some of its recent profits by losing -1.19%. The US Dollar index (UUP) bounced for a change and recovered +0.68%. With “risk” being on, at least for the day, and all worries being shoved aside, gold retreated at the tune of -1.15%.

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