Edging Higher

Ulli Market Commentary Contact

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

It wasn’t much of a gain, but a gain nevertheless, as the major indexes ended their 2-day slide to close in the green by a small margin. Trading was subdued during this Holiday shortened week, as new catalysts were lacking, and I don’t expect much movement in equities over the last trading days of the year.

This behavior is actually quite bullish as, due to low volume and attendance on Wall Street, bears would have a relatively easy time to pull the markets off their lofty levels. The advances were small in ETF space as well with the International SmallCaps (SCHC) taking the lead with +0.55% followed by Semiconductors (SMH +0.33%) and  Aerospace & Defense (ITA +0.24%). Closing in the red was US SmallCaps (SCHA), which gave back a tiny -0.06%.

Interest rated dropped sharply with the 10-year bond yield surrendering 5 basis points to end the day at 2.42%. The beneficiary of that move was the 20-year bond (TLT), which shifted into rally mode, gapped higher and gained +1.30%. The US Dollar (UUP) traded in a tight range and lost -0.21%.

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Low Volume Equals Directionless Meandering

Ulli Market Commentary Contact

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

It was a tug-of-war between Apple (AAPL -2.53%) and the retail sector as the former fell and the latter rallied (XRT +1.12%). Crude oil (+2.27%) through in some bullish support but it the end, the major indexes headed south by a slight margin. Of course, Holiday shortened weeks invite low volume, so the last 4 trading days of the year may be meaningless barring any unforeseen events.

Moves in the ETFs space happened within a fairly small trading range with the exception being the tech sector, which was pulled down by Apple, causing Semiconductors (SMH) to surrender -1.13%. On the plus side, we saw small gains in MidCaps (SCHM +0.13%) and SmallCaps (SCHA +0.11%).

Interest rates were steady and therefore allowing the 20-year bond (TLT) to move up +0.30%, which was its 3rd daily gain in a row. Gold headed higher to end at $1,288 and is now reaching again for the $1,300 level. It remains to seen, whether it will get crushed again once it touches this magic glass ceiling. The US Dollar (UUP) barely moved and slipped a tiny -0.08%.

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ETFs On The Cutline – Updated Through 12/22/2017

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 22, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/12/weekly-statsheet-etf-tracker-newsletter-updated-12212017/

 CRAWLING BACK TOWARDS THE UNCHANGED LINE

 

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

Despite today’s aimless meandering, which had the major indexes crawling out of a hole towards the unchanged line, the Dow and S&P 500 managed to score their fifth straight weekly advance despite ending the session slightly in the red. For sure, with the 3-day Holiday weekend ahead of us, there was not much motivation to push the indexes higher.

In light of the Dow’s and S&P’s strong 5-week performance, other asset classes did not fare so well. The Long bond had its worst week since the election, as interest rates rose, while the High Yield bond was down for the 4th week in a row.

Our widely held ETFs ended the day mixed. Heading higher were Emerging Markets (SCHE +0.76%), International SmallCaps (SCHC +0.50%) and Transportations (IYT +0.41%), with the laggards being Financials (XLF -0.28%) and US SmallCaps (SCHA -0.09%). Gold edged up, Crude Oil stayed about even, and the US Dollar (UUP) was range bound but gained a tiny +0.04%.

I will post the “ETFs on the Cutline” report tomorrow and will be back on Tuesday with the market commentary.

In the meantime, I wish you a Merry Christmas!

Ulli…

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 12/21/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, December 21, 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 +4.07% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Hunting For A Fresh Catalyst

Ulli Market Commentary Contact

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

With the tax reform package now being a done deal, the markets were in need of a new catalyst to continue their bullish theme. Since there was none to speak of, equities simply rallied higher because… well… that’s what they do. Energy, Financials and Telecom contributed to the positive outcome, but the mid-session highs of the major indexes were unsustainable, and we slipped into the close.

In the end, our most widely followed ETFs had some pluses and minuses with the overall outcome being positive. Taking the lead for the day were Emerging Markets (SCHE) with +0.88% closely followed by Financials (XLF) with +0.82%. On the downside, we saw Semiconductors (SMH) giving back -1.04% while the Dividend ETF (SCHD) surrendered a more modest -0.21%.

Interest rates dropped slightly allowing the 20-year bond (TLT) to finally show a green close (+0.37%) after 3 days of devastating losses. Gold and Crude Oil ended slightly higher as the US Dollar (UUP) went predominantly sideways and closed down a tiny -0.04%.

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