Dow Slips For 2nd Straight Day

Ulli Market Commentary Contact

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

Yesterday’s slippage continued early this morning, but dip buyers stepped in encouraged by a NT Times story alleging that Trump’s ‘Fire and Fury’ words were his own and not US policy. During the last hour, the whipping boy of the year, AKA the VIX, was spanked again and while helping the indexes recover, they fell short of the intended goal, namely to cross back above the unchanged line.

With geopolitical uncertainty in full swing, it was no surprise to see gold rally solidly by adding +1.53%. In regards to equity ETFs, we saw mainly red numbers with SmallCaps (SCHA) surrendering -0.75%, closely followed by MidCaps (SCHM) with -0.53%. Even the Emerging Markets (SCHE) were unable to mount a rally and gave back -0.82%. Eking out a tiny gain were Dividend ETFs (SCHD) with +0.04%; Transportations (IYT) closed unchanged.

While FANG stocks continued their journey south, Apple scored a new record high and gained +0.61%. The VIX headed north again and broke above the 12 level, and above its 200-day M/A, which is quite a change from its recent all-time low just below 9. If this trend is sustained, equities will eventually be negatively affected. Bonds were the beneficiary of this uncertainty as yields dropped and the 30-year bond rallied to add +0.55%. The US dollar (UUP) was fairly docile, traded sideways and closed down -0.08%.

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Trump’s ‘Fire And Fury’ Speech Takes Starch Out Of Upward Momentum

Ulli Market Commentary Contact

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

The major indexes did their customary morning dip and then started to recover to cross solidly above their respective unchanged lines. Hedge fund heavyweight Jeff Gundlach’s market warnings were offset somewhat by the usual VIX beating to keep the Dow winning streak alive. However, Trump’s “Fire and Fury” speech directed towards North Korea took the starch out of upward momentum and south we went, as the chart above shows.

Winning big time, prior to Trump’s speech, were the Seminconductors (SMH) with +2.75%, a gain that disappeared in a hurry and turned into a -0.30% loss, pretty much in line with the percentages the broader indexes gave back. Volatility showed signs of life with the VIX storming out of the basement to close above 11. That caused the FANG stocks to take a dive, and they gave back yesterday’s gains.

Gold was able to buck the trend by closing in the green, as did the Emerging Markets (SCHE) with +0.19%. Interest rates rose with the 10-year yield adding 3 basis points to close at 2.29%. Yes, with rising geopolitical tensions, you might have expected rates to fall, but they didn’t. The US Dollar (UUP) bounced around, traded in a wide range and settled +0.17% higher.

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Lowest Volume Since 2001; Dow Ekes Out A Record Close

Ulli Market Commentary Contact

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

The Dow continued with its 9th record close in a row, which is its longest streak since February. The S&P and Nasdaq ended the day higher as well with the Nasdaq leading the pack with +0.51%. However, it was Semiconductors (SMH), part of the 10 ETFs in the Spotlight, which took top billing with its chest pounding performance of +1.76%.

Helping matters again was the VIX, which got pounded back below 10 in order to assure a “green” closing of the S&P 500. SmallCaps (SCHA) were held in check but added +0.16%, while the Emerging Funds (SCHE) danced to the tune of their own drummer with a solid gain of +0.64%.

Interest rates were fairly docile and traded in a tight range with the 10-year yield dropping 1 basis point to 2.26%. The US Dollar (UUP) slipped, rallied and pulled back but ended up losing only a scant -0.04%. Gold followed a similar pattern, found support at its 100-day M/A and closed just about unchanged.

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One Man’s Opinion: The Death Cross Of Central Bank Credibility

Ulli Market Review Contact

By ZeroHedge

With no expectations of a rate-hike last week, and traders rapidly giving up on The Fed’s dream of a steadily higher rate trajectory, a funny thing happened in the markets…

In the eyes of The Fed, their monetary policy has not been this ‘tight’ since October 2008.

However, in the eyes of the market, financial conditions just hit their easiest level in history (easier than the September 2005 previous record easiness level).

This is what happens when you constantly flip-flop, constantly miss forecasts, and constantly lie.

Simply put, this is the death cross of Federal Reserve Credibility.

Picking up on the dramatic divergence, Bloomberg’s Cameron ‘MacroMan’ Crise has some advice for The Fed “Throw Us A Little Vol Here Please!”

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ETFs On The Cutline – Updated Through 08/04/2017

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 281 (last week 287) 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 4, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/08/weekly-statsheet-etf-tracker-newsletter-updated-08032017/

JOBS NUMBERS BETTER THAN EXPECTED

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

Again, bouncing around in a tight range was the theme of the day, but the major indexes managed to close in the green with the Dow ending at a record for the 8th straight day. The main supporting actor was not only the headline report of 209k jobs being added vs. an expected 180k, but also June’s revision higher to 231k from 222k. The month of May, however, was revised lower from 152k to 145k.

Under the hood, when looking at the quality of jobs, not much has changed from the prior months; the sector adding the most was the “waiters and bartenders” category with +53,000, its highest monthly increase since March 2014. It remains the strongest sector for US employment. As ZH reports, ‘there have now been 89 consecutive months without a decline for waiter and bartender jobs.’ Hardly a sign of a healthy and growing economy…

On the other hand, to heck with reality, all that matters is the perception that the economy is growing. Consequently, bonds dropped with the 10-year yield rising 3 basis points to settle at 2.27%. Gold got pushed down, as the Dollar Index (UUP) did its best imitation of a dead cat bounce intra-day, traded in a wide range but faded into the close with a gain of +0.87%.

Despite the tight trading range, all of our holdings closed higher, led by Transportations (IYT) with +0.77%. This was closely followed by SmallCaps (SCHA), which added +0.45% on the day.

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