Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 05/10/2018

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, May 10, 2018

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 +2.16% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Stocks Jump As Dollar Dumps

Ulli Market Commentary Contact

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

Muted inflation fears were one part of the puzzle that helped the markets score another win with the major indexes gaining across the board.

First, today’s reading on April consumer prices came in at +0.1%, which was a tad below estimates. Second, the 10-year bond yield pulled back and did not close above the much feared 3% level. Third, to make sure the markets were going to close in the green, the VIX was clubbed again and tumbled to 12 from yesterday’s 13 level.

This triple combination was enough to control any bearish thoughts and let the bulls have another chest pounding session. Even news headlines that 2 of the biggest hedge fund managers opined that “This is not a time to be rewarded for long market exposure…” while announcing their increased short holdings, did nothing to reduce the bullish fever—at least not yet.

Despite market anxieties appearing to have taken a step back, the jury is still out as to whether this will be a resumption of the prior bull market or, as some fund managers believe, simply a sign of a blow off top.

While gold and oil edged higher as well, the US Dollar (UUP) got spanked and lost -0.47%, its biggest drop in 2 months. However, due to its recent rebound, UUP is still positioned on the positive side of its 50- and 200-day M/As.

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Energy And Financials Propel The Indexes

Ulli Market Commentary Contact

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

You never know what motivates traders to push the markets higher. After Trump’s withdrawal from the Iran nuclear pact, and massive preceding requests by world leaders not to follow through with it, you would have expected the markets to have hissy-fit. They did, but to the upside and with help of the VIX, which was spanked to the 13 level and thereby assisted the bulls to have it their way.

Technically speaking, the recent glass ceiling, namely the 50-day M/A of the S&P 500, was taken out today indicating that we may break out of the trading range I’ve been posting about. However, a little more work is needed to confirm that this was not a one day pony show.

Nothing seemed to be able to stop this rally, not even the fact that interest rates rose with the 10-year bond yield gaining 3 basis points to close at 3.00% on the money. Energy shares took top billing, but we saw broad based gains in financials, materials and technology sectors. Lagging on the day were telecoms and utilities.

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Iran Nuclear Pact Ends—Major Indexes Unchanged

Ulli Market Commentary Contact

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

The much awaited and hyped up announcement by President Trump regarding the Iran nuclear pact had the major indexes, which hovered below their respective unchanged lines all morning, dipping down at first but managing to rebound to close essentially unchanged. Trump confirmed withdrawal from the pact and announced “the highest level of sanctions against Iran.”

While details were lacking, the markets pretty much took it in stride—so far—with most of the volatility occurring in the oil sector. The defense arena benefited as Israel bomb shelter headlines seem to play the drums of war. Domestically, Transportations lead with +0.76%, followed by Semiconductors and SmallCaps with +0.70% and +0.49% respectively.

Helping the markets gain some footing, after Trump’s announcement, was the VIX, which got pushed down to the 14 level thereby making sure that the Iran uncertainty supported the bulls and not the bears. Interest rates rose slightly with the 10-year bond yield creeping closer the 3% level, while the US Dollar (UUP) kept his recent strength alive by gaining +0.37%.

I don’t the market reaction to the Iran drama is over yet, and we’ll have to see how things play out over the next few days.

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Trimming Early Gains

Ulli Market Commentary Contact

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

Last Friday’s winning ways continued this morning with the major indexes moving sideways but comfortably above the unchanged line. Then the Iran headlines appeared about Trump promising a decision tomorrow at 2 pm as to whether to de-certify the 2015 Iran nuclear pact and re-impose sanctions, which would hamper oil exports and interrupt the global supply chain.

That took the starch out of the rally and south we went, but the major indexes managed a green close. The S&P 500 dipped below its 200-day M/A on Friday but recovered and closed above it, while today, the index climbed above its 50-day M/A but closed below it. We’re still stuck in a wide sideways pattern, out of which we will eventually break out—either to the upside or to the downside.

Last week’s China trade headlines were in focus again, even though they resulted in no agreement after several days of talks other than Chinese news outlets reporting that “talks were positive” but more jawboning was needed to avoid a trade war. The markets were not affected, but this may change once the Trump/Iran deadline will have passed and other negative news reports become the main focus for the bears on Wall Street again.

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ETFs On The Cutline – Updated Through 05/04/2018

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 173 (last week 196) 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.