Coming Off The Highs

Ulli Market Commentary Contact

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

Some earnings disappointments pulled the rug out from under the major indexes causing them to drop around -0.5% across the board. The big losers were Chipotle (CMG) and AMD, which tanked -14.58% and -13.47% respectively. Also weighing on the markets were Boeing, Goldman, IBM and Caterpillar. Looking at the big picture, all S&P sectors ended in the red.

As you can see from the above chart, momentum slipped early on to a low around mid-day, after which the usual afternoon levitation started, except today it wasn’t enough to crawl back above the unchanged line. Keeping the indexes in check was the VIX, which spiked above 13, but then puked, at which time the rebound materialized.

In ETF space, the picture was similar in that green numbers were nowhere to be found. As is the case with most pullbacks, the biggest winners usually give back the most. Today was no exception as Transportations (IYT) and Semiconductors (SMH) retreated -1.52% and -1.27% respectively. Holding up the best were Emerging Markets (SCHE) with -0.22%.

Treasury yields rose again pushing the price of the 20-year bond (TLT) down by -0.48% to a low last seen in August. In other words, the 6% bond rally, which started in August, has now been completely wiped out. The US dollar (UUP) moved in a tight trading range and closed the session -0.25% lower.

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Dow Powers Into Record Territory

Ulli Market Commentary Contact

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

The Dow got a huge assist today from Caterpillar (CAT) and 3M, which jumped after showing a better than expected quarterly report card. Both components contributed some 150 points to the Dow’s 168 point gain—into record territory. It was a narrow advance with Healthcare (XLV) bucking the overall positive trend (-0.56%) thereby limiting broad participation.

Things got a little chaotic late in the session as headline news broke about senators Flake, McCain and Paul apparently standing in the way of Trump’s tax plan, the positive outcome of which is still questionable but has been the basis of the recent market advances. Nevertheless, the affect on equities was only minor—so far.

The color green was prevalent across all of our ETF holdings, and the gains were steady but not spectacular due to the S&P 500 and Nasdaq lagging the Dow. Leading the bunch were Semiconductors (SMH) and International SmallCaps (SCHC), which gained +0.61% and +0.28% respectively. On the bottom of the totem pole, we saw the Dividend ETF (SCHD) and Aerospace & Defense (ITA) adding +0.12% and +0.13%.

Interest rates rose with the 10-year bond yield climbing to break the 2.40% level, which we saw last in April. Crude oil settled above the $52 marker and the US dollar see-sawed but ended the day up by +0.16%.

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Dow & S&P 500 End 6-Day Winning Streak

Ulli Market Commentary Contact

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

It had to happen eventually. The winning streak came to an end today, as uncertainty reigned in regards to tax cuts and corporate earnings, of which some 200 S&P companies are scheduled to report this week. Of course, given current market levels, we are way overdue for a pause.

Interestingly, the markets did not find any footing during the session, as we have become accustomed to, and ended up closing at the lows for the day. As ZH reports, it has now been 242 days since the US equity market has dipped by 3% or more… a new dubious all-time record, and to me another confirmation that markets are manipulated. As far as today is concerned, stocks had their worst outing in 6 weeks.

Despite the major indexes slipping, we saw some green numbers in ETF space. Gaining the most was our winner YTD, namely Semiconductors (SMH), which managed to buck the Nasdaq’s downtrend by gaining +0.38%. Divided ETFs (SCHD) also closed on the positive side with +0.08%. However, red numbers were dominant with Emerging Markets (SCHE) giving back -0.80%, while Aerospace & Defense (ITA) and SmallCaps retreated -0.70% and -0.67% respectively.

The yield on the 10-year bond ended up dropping 1 basis point to 2.38% after having tested higher ground all day, namely the 2.40% level. Gold was lower for most of the session, then suddenly spiked and managed to reclaim its 100 day M/A level. The US dollar (UUP) rallied but faded into the close with a tiny gain of +0.12%.

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One Man’s Opinion: Science Tells Us This Is All True

Ulli Market Review Contact

By Simon Black

On April 30, 1934, under pressure from Italian-American lobby groups, the United States Congress passed a law enshrining Columbus Day as a national holiday.

President Franklin Roosevelt quickly signed the bill into law, and the very first Columbus Day was celebrated in October of that year.

Undoubtedly people had a different view of the world back then… and a different set of values.

Few cared about the plight of the indigenous who were wiped out as a result of European conquest.

Even just a few decades ago when I was a kid in elementary school, I remember learning that ‘Columbus discovered America’. There was no discussion of genocide.

It wasn’t until I was a sophomore at West Point that I picked up Howard Zinn’s People’s History of the United States (and then Columbus’s own diaries) and started reading about the mass-extermination of entire tribes.

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ETFs On The Cutline – Updated Through 10/20/2017

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 272 (last week 283) 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 20, 2017

Ulli Market Commentary Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/10/weekly-statsheet-etf-tracker-newsletter-updated-10192017/

ENDING THE WEEK WITH A BANG

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

The major indexes opened up the session on the positive side of the unchanged line and never looked back, as the relentless ascent into record territory continued unabated. The big assist came from the Senate when it passed a “budget blueprint” for the next fiscal year, which is supposed to make way for Trump’s tax cuts, which in turn are vital to keep the bullish meme alive. At least, that’s the interpretation for the moment.

Nevertheless, the bulls feasted on the news, and we closed solidly in the green. GE performed magic today by falling 7% in pre-market trading based on abysmal earnings, horrible cash flow and slashing its profit forecast. A mid-day V-shaped recovery, for no reason, allowed the company to erase all losses and to close in the green. Amazing…

Equity ETFs had a good day, and we saw consistent gains across the board with only a couple of exceptions. Aerospace & Defense (ITA) took the lead with +1.27%; Transportations (IYT) came in second place with +0.90% while MidCaps (SCHM) placed third with +0.63%. The only red figures came from the International arena with the International SmallCaps (SCHC) sliding -0.22% and the International ETF (SCHF) giving back -0.09%.

Interest rates rose with the yield on the 10-year bond jumping 6 basis points to end the week at 2.39%, its highest level since early July. Crude oil rose and gold slipped. The US dollar (UUP) soared +0.58% after the budget vote, which was its best daily performance in 9 months.

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