ETFs On The Cutline – Updated Through 07/28/2017

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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 287 (last week 285) 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 July 28, 2017

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ETF Tracker StatSheet

https://theetfbully.com/2017/07/weekly-statsheet-etf-tracker-newsletter-updated-07272017/

DOW CLOSES AT RECORD; TECH IS WEIGHING ON S&P AND NASDAQ

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

Much of the retail store apocalypse has been blamed on online sales, despite the fact that they only account for about 8% of total retail sales. Amazon was one of the alleged guilty parties contributing to the consumer discretionary skid. Well, this morning Amazon stock took a -3.5% dive confirming in a way that lack of consumer spending, due to worsening economic conditions, may very well be at the core of the issue in addition to Amazon’s 77% plunge in second quarter earnings, a result of jumping operating expenses across the board.

The early morning sell-off proved to be a tough one to reverse and, despite the VIX being crushed again (but it had its biggest weekly gain in 2 months), only the Dow managed to crawl above the unchanged line to set a new record close. The other two major indexes ended up slightly in the red with the S&P 500, to much shock and horror, actually losing 1 point for the week, after having chalked up 3 weekly gains in a row.

The FANG stocks had their first down week in the last 4; interest rates dropped today and also ended lower for the week. Not only did 2nd Qtr GDP miss at 2.6% vs. an expected 2.7%, but 1st Qtr GDP was revised down from 1.4% to 1.2%, which makes me curious as to what next month’s revision will bring.

The dollar index continued its dive losing another -0.62% for the day allowing gold to rally for the 3rd straight week and conquering its 50-, 100- and 200-day M/As to close at $1,275, its highest level since the beginning of June.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 07/27/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, July 27, 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 +3.60% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Tech Slumps And Gold Pumps

Ulli Market Commentary Contact

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

Despite another roller coaster ride, the Dow was the only one of the three major indexes that not only “survived” the mid-day sell-off but also registered another record high. The tech arena was not so lucky and, after a tremendous run in the recent past, had to accept the fact that nothing goes up forever. As a result, Apple dropped nearly 2% and the FANG stocks as a group simply puked with Google and Netflix losing the most and Facebook performing the best.

Not helping matters was the VIX spiking above 11 after hitting all-time lows yesterday. It’s too early to tell if that was just a dead cat bounce or the canary in the coalmine warning of more volatility to come. To be clear, the direction of the stock market is entirely dependent on volatility. Higher volatility translates to a bearish scenario while a lower VIX translates to a bullish environment. Some have cast their votes already, and one of them is well known hedge fund manager Jeff Gundlach who bought some S&P puts 5 months out, which will generate a nice return assuming a correction takes place within that time period.

Across asset classes, gold was the winner sporting a +0.79% gain while the Transportation (IYT) index got slammed at the tune of -3.10%. Financials joined the party with IYF dropping -0.50%; retailers (XRT) bucked the trend and added +1.45%. The yield on the 10-year bond spiked 3 basis points to close at 2.32%, and the US dollar (UUP) recovered some of yesterday’s sharp losses by adding +0.37%.

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VIX Crashed And Dollar Bashed

Ulli Market Commentary Contact

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

The widely anticipated FOMC minutes turned out as expected with the Fed confirming that they plan on continuing their path of higher interest rates this year and also start to sell off its massive holdings of Treasuries and mortgage bonds. The thing they did not say is the timing and magnitude of their pans, which may be subject to further tinkering, which in turn left the markets in a bit of uncertainty.

While we came off the highs by the end of the session, the major indexes managed to hang on to some gains to close in the green with the Dow getting a huge assist from Boeing’s 9.2% spike. Helping to close above the unchanged line was a crash of the VIX to a new all-time record low of 8.84, a direction that appears more insane by the day as it implies no anticipation of risk in stocks.

At the same time, warnings about the dangerous levels of the stock market accelerated today, along with concerns about the global economy, and they did not come only from high profile individuals but also from generally bullish outfits like Investors Intelligence, as you can read, here, here and here.

Interest rates dropped with the 10-year bond yield losing 4 basis points to end at 2.29%. The dollar (UUP) was spanked again, traded in a wide range and ended the day down by -0.57% a level last seen in July 2016. Gold was the beneficiary and spiked back above $1,260, a gain of +0.62%.

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Scrambling higher

Ulli Market Commentary Contact

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

Today, it was the Dow’s turn to lead the way with the Nasdaq lagging behind, but it still managed to hang on to the plus side despite a last hour sell off. The S&P 500 and the Nasdaq closed at record highs as the VIX was slaughtered again to 9.04 intraday and has now not closed above 10 for 9 straight days. This is its longest closing period below 10 in history; in other words, as I posted yesterday, Wall Street traders are displaying total complacency and are assuming there is no risk in the markets.

Google’s 2.93% loss did not help the Nasdaq and pulled the FANG stocks down for their first loss in 13 days. Crude oil helped the overall bullish tone as the black gold rallied +3.43%.

With the Fed’s FOMC statement looming tomorrow, nervousness prevailed, and interest rates shot up 7 basis points with the 10-year bond yield settling at 2.33%.

Here’s something to think about. As ZH reports, since the lows reached immediately after the Brexit vote in 2016, the S&P 500 has seen over 270 consecutive trading sessions without a 5% peak-to-trough drawdown. This is the 4th longest stretch since 1928…

Talk about manipulation at its best.

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