Equities Skid As Uncertainty Reigns

Ulli Market Commentary Contact

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

In addition to the usual menu of concerns, there were a few new ones that helped the markets end their multi-day winning streak. Besides the lack of progress with the Trump pro-growth agenda and continued saber rattling with N. Korea, another monster hurricane named Irma is threatening the coast of Florida prompting the state to prepare for the “catastrophic” system.

In the meantime, on the economic side, July factory orders plunged to their weakest since February with final data confirming a 3.3 MoM tumble; durable goods got spanked at a rate of -6.8%. Ouch!

As a result, the major indexes headed south with the S&P 500 faring the best by surrendering only -0.76%. Across the ETF spectrum, Semiconductors (SMH) gave back -1.27% closely followed by Transportations (IYT) with -0.97%. The Dividend ETF (SCHD) held up the best with -0.44%.

Profiting from all this carnage were Gold and Bonds. As is well-known, gold can be an insurance play, and it certainly acted that way today with a gain of +0.99% and a sprint towards the $1,350 marker, a level last seen in September 2016. In regards to interest rates, yields got clobbered with the 10-year losing 6 basis points to end the day at 2.10%.

That benefited the 20-year bond (TLT), which rallied a solid +1.54% and continued its northerly path from August.

The US Dollar (UUP) retraced some of its recent gains, AKA a dead cat bounce, and dropped -0.54%.

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One Man’s Opinion: Weird Things Are Happening With Gold

Ulli Market Review Contact

By James Rickards

Last week featured two unusual stories on gold – one strange and the other truly weird. These stories explain why gold is not just money but is the most politicized form of money.

They show that while politicians publicly disparage gold, they quietly pay close attention to it.

The first strange gold story involves Germany…

The Deutsche Bundesbank, the central bank of Germany, announced that it had completed the repatriation of gold to Frankfurt from foreign vaults.

The German story is the completion of a process that began in 2013. That’s when the Deutsche Bundesbank first requested a return of some of the German gold from vaults in Paris, in London and at the Federal Reserve Bank of New York.

Those gold transfers have now been completed.

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ETFs On The Cutline – Updated Through 09/01/2017

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 284 (last week 265) 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 September 1, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/08/weekly-statsheet-etf-tracker-newsletter-updated-08312017/

PAYROLLS DISAPPOINT; MARKETS RALLY

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

The main problems of the past week, N. Korea and Harvey, got some company today when the jobs report turned out to be simply ugly with the BLS reporting that only 156k jobs were created in August compared to expectations of 180k. In addition, as we have come to expect, sharp downward revisions for June and July to 210k and 189k respectively, a combined loss of 41k, did not put the data series in a stellar light. However, in this new economy, all news are good news and the twisted minds of Wall Street celebrated this as a win supported by the logic that the Fed may slow down somewhat on intended future rate hikes.

Overall, this past week has been a crazy one, as ZH summed up:

  1. Nasdaq +2.75% – best week since Dec 2016
  2. S&P +1.5% – best week in 4 months
  3. Trannies +2.8% – best week in 3 months
  4. Gold +2.6% – best week since April 2016

Equity ETFs followed the bullish trend with Emerging Markets (SCHE) leading the way via a gain of +0.74%. SmallCaps (SCHA) had a good day as well with +0.52%. The only red number came from Aerospace & Defense (ITA), which showed a small loss of -0.27%.

Despite the hope for a slowdown in future rate hikes, reality turned out to be different with the yield on the 10-year bond rising 4 basis points to 2.16%. That pulled the rug out from under the 20-year bond price, which gapped down and declined -0.97%.

Gold continued its northerly path and added +0.62% to close at $1,330. The US Dollar (UUP) again traded in a broad range and managed to add +0.21% but remains in dead-cat-bounce territory.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 08/31/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, August 31, 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 +2.95% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Mission Accomplished: S&P Closes In The ‘Green’ For August

Ulli Market Commentary Contact

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

The past few days, I have commented on the fact that the S&P was in danger of notching its first losing month in 2017, and that there was a good chance efforts would be made to push the index in the ‘green.’ That’s exactly what happened and, even though we managed to add only 2 points or +0.08% for August, it will register as a gain in the record books. This is in line with the modest advances we saw in the Dow and Nasdaq.

A couple of econ reports supported the bullish theme with low levels of first-time jobless claims being interpreted as a positive while consumer spending allegedly picked up in July; of course, don’t be surprised if/when these numbers get revised next month.

In regards to our main holdings, we saw International SmallCaps (SCHC) take the lead today with +1.07%. Performing almost just as well were US SmallCaps (SCHA) with a gain of +0.98% and MidCaps (SCHM) adding +0.93%. Lagging the top performers but still closing higher were Transportations (IYT) with +0.13%.

Gold popped nicely after last night’s flash crash, which pulled the metal down below its $1,300 marker, but dip buyers stepped in and were the main contributor to the +1.03% gain. Interest rates dropped again, and the 20-year bond (TLT) continued its march higher by adding +0.30%. The entire month was market by tumbling yields, which was their biggest drop since the middle of 2016. The US dollar (UUP) traded in a wide range but closed lower by -0.29%.

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