Records Continue To Fall

Ulli Market Commentary Contact

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

Today, all three major indexes moved in sync by pushing further into uncharted territory and closing at new all-time highs. It was a repeat of yesterday, as we headed straight north right after the opening bell and never looked back with additional momentum gathering strength in the last hour of the session.

The minutes from the last Fed meeting were released and showed some opposing opinions that some characterized as a “distinct lack of unity over the banks 2018 projected rate hikes.” Some members thought that 3 rate hikes to be too aggressive while others considered the proposed pace to be too slow. Despite this fly in the ointment, traders simply dismissed it and focused on continuing to beat the VIX not only into submission but also below the “9” level, its lowest closing ever.

In ETF space, we again saw only green numbers with Semiconductors (SMH) taking the lead for the 2nd day in a row by gaining a solid +1.41%. Emerging Markets (SCHE) took second place with +1.09% followed by International ETFs (SCHF +0.70%) and LargeCaps (SCHX +0.64%). Interest rates dropped with the 10-year yield giving back 2 basis points to end at 2.44%. After a week-long slide, the US Dollar (UUP) finally found some support and rebounded +0.38%, but it’s too early to tell if this is the beginning of new upward momentum or simply another dead cat bounce.

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Storming Into 2018 And Setting New Records

Ulli Market Commentary Contact

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

The weak performance of the last day of 2017 is now forgotten, and in the rear view mirror, as the major indexes stormed out of the starting blocks and never looked back. It was the S&P’s and Nasdaq’s turn to set new records while the Dow lagged for the time being. The energy, consumer discretionary and technology sectors dominated by gaining in excess of 1% during the first trading day of 2018.

Market optimism was maintained in ETF space as well, with only green numbers across our holdings. Leading the bunch with a big surge was last year’s favorite, namely Semiconductors (SMH), with a chest pounding advance of +2.62%. This was followed by nice showings of Transportations (IYT +1.79%) and Emerging Markets (SCHE +1.65%). Trailing the group was Financials (XLF) with a meager +0.04%.

Interest rates jumped with the yield on the 10-year bond gaining 6 basis points to 2.46%. That took the starch out of bond prices with the 20-year TLT dropping -1.08%. Gold continued its magic ascent from the beginning of December in a straight line up to close solidly above the $1,300 marker at a level last seen in the middle of September. The US dollar (UUP) was not so lucky and lost another -0.42% to match its lows from 3.5 months ago.

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ETFs On The Cutline – Updated Through 12/29/2017

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 239 (last week 257) 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 December 29, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/12/weekly-statsheet-etf-tracker-newsletter-updated-12-28-2017/

 DIVING INTO THE CLOSE

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

It’s no secret that equities had a stellar 2017 with the major indexes posting their best year since 2013. It was a period during which the Dow hit 71 closing records, while the Nasdaq rose for its sixth straight year, its longest such streak since the one lasting from 1975 to 1980. All three indexes added solid gains for December but dove into the close as the bears notched a rare and tiny victory, which can be attributed to low volumes and lighter-than-average liquidity.

Consequently, green numbers were hard to come by as only Emerging Markets (SCHE +0.47%), International SmallCaps (SCHC +0.08%) and International Equities (SCHF +0.03%) closed up. All other ETFs in our portfolios puked on the last trading day of 2017 with SmallCaps (SCHA -0.75%) losing the most and the Dividend ETF (SCHD -0.25%) holding up the best.

Interest rates dropped with the 10-year bond yield surrendering 3 basis points to end the year at 2.40%. Crude Oil bounced back above $60 while gold climbed above the $1,300 level for the first time since late August. I am curious to see if the metal gets spanked again come next Tuesday, which historically has been the day of punishment.

The US Dollar (UUP) continued with its function as the whipping boy of the year by gapping down for the third day in a row (-0.41%) to a level last seen in September. For the year, UUP showed an ugly performance by losing some 10%.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 12/28/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, December 28, 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 +3.87% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Last Hour Burst Assures A Green Close

Ulli Market Commentary Contact

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

After much range trading for most of the day, the major indexes shot up during the last hour to not just only close in the green but to also push the Dow to its 71st record close for the year. The supporting actors turned out to be banking shares and to a lesser degree the energy sector with crude oil adding +0.42%. Despite low volume, the late session ramp seems to indicate that the bulls are alive and well.

In ETF space we saw predominantly gains with the only exception being Transportations (IYT), which gave back -0.31%. Other than that, the green numbers were pretty evenly spread across the board led by International SmallCaps (SCHC +0.63%), Emerging Markets (SCHE +0.47%) and MidCaps (SCHM) and Financials (XLF) each adding +0.39%.

Interest rates rose a tad with the yield on the 10-year bond gaining 1 basis point to 2.43%. Gold added +0.45% and is now knocking on the $1,300 ceiling, which has been a resistance point in the recent past, and it remains to be seen if this obstacle can finally be overcome. The US Dollar (UUP) again traded in a tight range, gapped down again and lost -0.29%.

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