Exuberance Fades As Tech Wreck Continues

Ulli Uncategorized Contact

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

Overnight exuberance, caused in part by the discovery that Friday’s story from ABC about former national-security advisor Flynn was “fake news”, only had a temporary market moving effect. But clearly helping the bullish cause was the weekend passage of the Senate version’s overhaul of the tax code.

Spoiling the party was the continuation of the tech wreck, which pulled the Nasdaq down by another -1.05%. Only the Dow managed to buck the trend by closing slightly in the green after having been up over 200 points early on.

In the end, we saw more losers than winners in ETF space, although the bottom line was just about even. Scoring nicely were Transporations (IYT +1.81%) and Financials (XLF +1.52%). On the downside, Semiconductors (SMH) continued their slide with -2.12% while International SmallCaps (SCHC) gave back -0.65%. Semiconductors are now getting close to triggering their trailing sell stops, and we will liquidate them once that event occurs. Remember, they have been our top performer YTD, and a sale will leave us with a nice profit.

Interest rates bobbed and weaved, but the yield on the 10-year bond remained unchanged. Gold dropped and Crude Oil lost, while the US dollar (UUP) was steady and added +0.33% for the day.

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One Man’s Opinion: Doug Casey On The New Fed Chair

Ulli Market Review Contact

Authored by Doug Casey via CaseyResearch.com,

Ahead of his confirmation hearing tomorrow, a few words are in order about the likely new Chairman of the Federal Reserve, Jerome Powell.

I don’t know the man personally. Not that it would make any difference; denizens of the swamp within the Beltway usually present well, and a brief meeting rarely allows you to penetrate someone’s social veneer. But I’m pretty confident that if we dined together it would be tense and unpleasant. We’d have no common ground, after the obligatory two minutes on the weather and the state of the roads.

He’s a lawyer, has been a Fed Governor for five years, and appears to be a “steady as she goes” so-called moderate Republican. He’s a lifelong Deep State player. But let’s not waste time psychoanalyzing this bureaucrat; he’s just a cog in the machine. And the machine, at this stage, has a life of its own.

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ETFs On The Cutline – Updated Through 12/01/2017

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 258 (last week 266) 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 1, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/11/weekly-statsheet-etf-tracker-newsletter-updated-11302017/

SLIPPING FOR THE DAY BUT GAINING FOR THE WEEK

 

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

The equity markets derailed this morning and plunged after headline reports that Trump’s former national-security advisor promised not only “full cooperation with the Mueller team” but that he is also prepared to testify that as a candidate, Donald Trump “directed him to make contact with the Russians.” That was all it took and south we went in a hurry as the chart above shows. Despite this element of uncertainty, the major indexes managed to climb back during the remainder of the session but fell short of crossing the unchanged line to the upside. Still, the Dow managed to have its best week of the year.

The tech wreck continued handing Semiconductors (SMH) another loss of -0.87%. Aerospace & Defense (ITA -1.44%) suffered as well along with Emerging Markets (SCHE -0.76%. Sporting the only green numbers for the day were Financials (XLF +0.22%) and International SmallCaps (SCHC +0.11%).

Interest rates slipped with the yield on the 10-year bond retreating 5 basis points to 2.37%. The high yield arena suffered with HYG trading in wide range, gapping down and losing -0.46% after a few days of calmness. The US dollar (UUP) also whipsawed and closed slightly lower for the day but managed, after 3 weeks of losses, to close higher for the week by +0.17%.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 11/30/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, November 30, 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 +3.80% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Tax Plan Optimism Sparks Rally

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com] 

  1. Moving the markets

And the beat goes on. Optimism about the tax plan prospects went into hyper drive with John McCain appearing to be the catalyst by casting his “YES” vote convincing traders that a tax reform may actually happen. That motivated the bullish crowd, and the major indexes jumped. Even though we came off the highs mid-day, it was enough for the Dow to register its longest streak of monthly gains in 22 years.

In ETF space, we saw gains of varying degrees across the board. Following through on yesterday’s top performance of +3.4% were Transportations (IYT), which added another +2.01%. That was followed by Aerospace & Defense (ITA) and the Dividend ETF (SCHD) with +1.25% and +0.94% respectively. Not being aligned with today’s bullish theme were Emerging Markets (SCHE) with a loss of -0.76%.

Interest rates rose sharply with the 10-year bond yield jumping 5 basis points to 2.42%. Gold got spanked again and lost -0.74%. Every time the yellow metal is in danger of breaking through its $1,300 marker, it gets slammed down thanks to the manipulated derivatives markets on the COMEX. The US dollar (UUP) managed to recover some of its early losses but still closed down -0.25%.

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