ETFs On The Cutline – Updated Through 08/18/2017

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 248 (last week 256) 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 August 18, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/08/weekly-statsheet-etf-tracker-newsletter-updated-08172017/

THE ROLLER COASTER RIDE CONTINUES

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

A mid-day rally, or was it a dead cat bounce, evaporated with the major indexes closing again below the unchanged line, although by only a slight margin. Volume was low, as it usually is during summer months which, when combined with nervous investors, leaves equities vulnerable. It was the second week of losses for the Dow and S&P, while the Nasdaq has now slipped four weeks in a row, its longest losing streak since May 2016. However, in the bigger scheme of things, this pullback is relatively minor compared to the post-election rally we’ve seen.

Interestingly, the frequently hyped Dow performance YTD has now slipped into second place, as gold’s recent rally pushed it ahead of the blue chip indicator. Gold managed to spike through the $1,300 resistance level today, for the third time this year, but failed to hold it into the close.

In regards to equity ETFs, there were few winners today. Emerging markets (SCHE) took top billing with a gain of +0.73%. Semiconductors (SMH) eked out +0.22% despite weakness in the Nasdaq, and the International SmallCaps (SCHC) ended up +0.35% higher.

Interest rates slipped during the week but closed unchanged today. The US dollar index (UUP) slid -0.33% but remains off the lows for the year enjoying its dead cat bounce while it lasts.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 08/17/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, August 17, 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 +2.28% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Indexes Slide But ‘Buy Signals’ Remain Intact

Ulli Market Commentary Contact

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

Not only did the Dow’s 4-day win streak come to an end today, all 3 major indexes showed the same pattern; that is slowly deteriorating momentum throughout the session and closing at the lows. There were no green numbers to be found only varying degrees of losses. Faring the best, were International SmallCaps (SCHC), which gave back only -0.64%. That was in stark contrast to the rest of the field where Transportations (IYT) fared the worst with -2.38% closely followed by Semiconductors (SMH) with -2.37%.

Contributing to this slide were a variety of events ranging from questions about Trump’s agenda to news of a terrorist attack in Spain and disappointing results from Cisco (-4.02%). Dismal Industrial Production data did not help either.

To no surprise, the S&P VIX rallied sharply and surged back to 15 reversing its recent drop. Benefiting from all this uncertainty was Gold, which continued its march towards the $1,300 milestone marker, a level which we have not seen since early last November. Interest rates dropped again with the 20-year Bond (TLT) rallying +0.75%. The US Dollar (UUP) traded in a tight range and managed to add +0.21% for the day.

Please see section 3 below for the effects on our Trend Tracking Indexes (TTIs).

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Struggling To Stay Above Water

Ulli Market Commentary Contact

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

An early rally, ahead of the Fed minutes, fizzled after their release with the S&P 500 kissing its unchanged line before rebounding and ending up slightly in the green. The Dow and Nasdaq followed suit in similar fashion.

Contributing to some turmoil was President Trump’s decision to disband his advisory panel while political tensions were casting doubt on his pro-growth plans. Then it was the Fed’s turn as the minutes showed that the Central Bank is struggling with sluggish inflation, which could mean either limited or no rate hikes in the near future, while they remain eager to start unwinding their $4.5 trillion asset portfolio.

Across the ETF spectrum, domestic equities headed higher led by MidCaps (SCHM) with a gain of +0.35% followed by Dividend ETFs (SCHD) with +0.24%. Things looked better on the International side where the Emerging Markets (SCHE) took top billing with +1.19% followed by SmallCap International ETFs (SCHC) adding +0.67%.

The Fed’s dovish statement helped interest rates to fall allowing the 20-year bond (TLT) to rally +0.37%. The US dollar (UUP) traded in a broad range but closed lower by -0.33% wiping out the gains of the last two days.

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Hugging The Unchanged Line

Ulli Market Commentary Contact

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

Equities struggled all day to find some direction, but the session turned out to be nothing but aimless meandering around the unchanged line with the major indexes essentially remaining unchanged.

SmallCaps (SCHA) fared the worst with a loss of -0.68% closely followed by MidCaps (SCHM) giving back -0.31%. On the winning side, semiconductors (SMH) added +0.37%, despite the Nasdaq’s weak showing, and Transportations (IYT) notched a gain of +0.29%. The Dow had an interesting day with Boeing and Apple adding 30 points, while Home Depot’s -3.2% pounding took 30 points away leaving the index with a tiny gain of +0.02%.

Retailers crashed again as the Retail Apocalypse continued with XRT not just dropping -2.70% to a level last seen early July but also clearly breaking its 50-day M/A to the downside. If this current critical support is taken out as well, we’d be looking at lows last seen in 2013.

Interest rates spiked, and the 20-year T-bond lost -0.42%; gold dumped and the US dollar pumped for a change. UUP gapped higher and whipsawed throughout the session but ended up by +0.45%.

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