Indecision Reigns

Ulli Market Commentary Contact

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

Equities struggled with only the Nasdaq managing to spend some time above the unchanged line early on, and knocking out another intra-day record, but it too succumbed to weakness, before sliding slightly into the red.

Trump’s tax cuts were at the center of the market weakness, as the House was discussing a more “gradual phase-in for the corporate tax-rate cut,” against the President’s plan for an immediate reduction. Any danger of sudden changes being implemented is bound to affect markets, as the tax-cut has formed the base for recent market advances.

As uncertainty reigned, the ETF space was affected as well, and we saw more red numbers than green ones. Closing the session on a positive note were International SmallCaps (SCHC) and International Equities (SCHF) with gains of +0.70% and +0.24% respectively. On the downside, Transportations (IYT) took the biggest hit with -1.31% followed by US SmallCaps with -0.85%.

Interest rates headed south as the yield on the 10-year bond took a dive by losing 5 basis points to end at 2.37%, which helped the 20-year bond price (TLT) to finally show signs of life again by rallying +0.96%. The US dollar (UUP) headed the other way and lost -0.49%.

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One Man’s Opinion: Can Blockchain Prevent Government Overreach by Decentralizing Institutions?

Ulli Market Review Contact

By ZeroHedge

Government overreach is cited often using examples of pointless and harmful laws and their heinous results. Take, for instance, a case in 2012 that saw one Oregon man jailed for collecting rainwater from the ponds on his property. Oregon local law states that all water is a public resource, even reservoirs that reside on private property so technically, taking rainwater from his ponds was grounds for a 30-day jail term. Regardless of the blatant unfairness of such legislation, if he had a more comprehensive knowledge of them, perhaps he could have submitted his Standard Reservoir Permit in time and avoided his sentence.

Make no mistake, blockchain cannot nullify such laws, but it can help citizens in countries around the world to work with them and prove their compliance. Much government overreach happens because of inefficiency, but this is a poor excuse when blockchain exists. There are many evolving blockchain trends that will transfer power from centralized governments to the citizens under their thumb, including the internet of things, blockchain identification and voting platforms, and diverse financial markets.

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ETFs On The Cutline – Updated Through 10/27/2017

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 272) 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 October 27, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/10/weekly-statsheet-etf-tracker-newsletter-updated-10262017/

A SLOW START FOLLOWED BY A STRONG FINISH

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

The week started out slow, and it looked like the major indexes might finish to the downside. Well, that did not happen as Amazon’s good results today put some fuel under the Nasdaq with the index rocketing higher by +2.2%. Not to be outdone, the S&P 500 raced into record territory as well, but by a smaller margin. Lagging the duo was the Dow, which barely close above the unchanged line.

This is the 5th weekly rise in the Nasdaq and the 7th in a row for the S&P and Dow. The VIX was crushed below 10 thereby lending an assist to the bullish crowd. Our ETF holdings performed nicely with Semiconductors (SMH) sporting a gain of +2.01%, followed by Emerging Markets (SCHE) with +1.21% and LargeCaps (SCHX) with +0.80%. Aerospace & Defense (ITA) was the only one showing a red number as it lost -0.12%.

While bond yields were higher for the week, today interest rates dropped allowing the 20-year bond (TLT) to score a gain of +0.66% thereby interrupting the recent losing streak. Gold and Crude oil followed the bullish equity theme and closed higher, while the US dollar (UUP) followed suit by adding +0.24% to yesterday’s gains.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 10/26/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, October 26, 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 +2.74% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Treading Water

Ulli Market Commentary Contact

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

Some better than expected corporate earnings helped the major indexes to shake off yesterday’s bearish mood and remain above the unchanged line with the exception of the Nasdaq, which slipped a tad. Helping the markets was news that the House of Representatives squeezed out a budget bill allowing the Senate to later pass a tax reform package with a simple majority instead of 60 votes.

The predominant trend for the session was sideways, which was reflected in modest ETF performance. Yesterday’s loser, namely Transportations (IYT) came roaring back with a +0.94% showing and outclassing Semiconductors (SMH) with +0.54%. MidCaps (SCHM) had a nice session as well with a gain of +0.41%. On the losing side, we saw Aerospace & Defense (ITA) give back -0.85%.

The yield on the 10-year bond rose again by 2 basis points to 2.46%, its highest level in 7 months. It is now honing in on the high for the year (2.62%), which was made in March. I will be watching the rise in yields closely, as they eventually will become a threat to equities. As a consequence of higher rates, the US dollar (UUP) benefited and sprinted sharply higher by gaining +1.07% to reach its highest point since July.

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