Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 05/25/2017

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ETF Data updated through Thursday, May 25, 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 +3.78% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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S&P 500 And Nasdaq Eke Out New Record Highs

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

After the break through the glass ceiling yesterday, the major indexes managed to maintain upward momentum to score gains for the 6th consecutive day recovering all losses sustained during last week’s dump. While the Dow lagged, the S&P and Nasdaq shot up into record territory.

Stocks still felt good the morning after digesting the Fed minutes, disregarding the warnings, and focusing on the hope that Fed members are basically in agreement that there will be a “very gradual and thoughtful balance sheet normalization process.” Some good earnings gave an assist as well.

All this good mojo was enough to push equities higher, which helped traders to simply ignore some bad news, namely that crude oil got spanked at the tune of -5.16% pushing the black gold solidly below the psychologically important $50 level to close at $48.71.

With so much green on the board, bonds joined in and rallied with the 20-year Treasury TLT gaining a tad. The US dollar showed signs of life again with UUP adding +0.12%, and precious metals closed higher as well. Even the VIX, which usually moves opposite of the S&P 500, decided it must be opposite day and edged higher.

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Last Hour Surge Pushes Indexes To Record Highs

Ulli Market Commentary Contact

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

I’ve been mentioning the glass ceiling during recent posts, and today was the day when the S&P 500 managed to break out of a 4-day sideways pattern to close the session at a new record but only by a tiny margin while setting a 2017 volume low.

Most of the day was spent treading water as traders awaited the minutes from the last FOMC meeting, which indicated broad agreement on plans to begin shrinking the Fed’s balance sheet and also remain on target to ‘perhaps’ hike rates next month.

Things got really nutty in the markets, when the Fed said:

“Asset valuation pressures in some markets were notable…vulnerabilities appeared to have increased for asset valuation pressures…a sharp decline in such valuations could pose risks to financial stability.”

A very clear message, but the markets took it as a positive (huh?), and the S&P and Nasdaq went on set new record highs. Sometimes you just have to laugh…

The US dollar hit the skids again after yesterday’s rebound with UUP slipping -0.32%. Treasury yields fell with the 20-year bond TLT gaining +0.56% joined by gold and silver, which both closed in the green.

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Bouncing Against A Glass Ceiling

Ulli Market Commentary Contact

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

The major indexes managed to stay above the unchanged line throughout the session (on low volume) and kept bouncing against the invisible glass ceiling also known as new all-time highs. There was not enough momentum to break through, and it appears that we’ll be having a fairly quiet week as far as politics is concerned as Trump is still traveling outside the US.

Market levels remain totally disconnected from underlying economic realities with the US Macro data indicator dumping to its lowest point since February 2016 (see chart below) when the markets were about to crash but were saved thanks to Fed intervention.

Here are some of the more visible components:

  1. New home sales for April plunge 14.4% MoM
  2. Biggest drop occurred in the West, which saw a 26.3% collapse
  3. Manufacturing slumps to 8-month lows

Treasury yields spiked to their highest level in a week, which gave the US dollar an excuse to rally for a change (UUP +0.44%) but kept a lid on stock advances while also pushing gold lower and towards the 1,250 level.

At the end of the session, we closed in the green, but the Macro data chart below leaves me wondering ‘what’s next?’ if we had a true market that was left to its own devices:

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Stocks And Precious Metals Jump; Dollar Slips

Ulli Market Commentary Contact

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

Another effort to push equities back to levels reached prior to last Wednesday’s sell-off was successful with all three major indexes gaining for the third day in a row as the S&P 500 is now lurking within 8 points of its all-time high and is back in the green for May. However, the fly in the ointment over the past few days has been low volume, which indicates lack of participation in this rally.

President Trump’s trip to Saudi Arabia proved to be beneficial for defense stocks as he signed a mammoth weapons deal, which lifted ITA +1.12% for the day. Interest rates climbed slightly with the 10-year yield reaching 2.25%. The US dollar continued its freefall with UUP losing another -0.16% reaching a level last seen in October 2016. Apparently Trump’s tough talk of “the dollar is too strong” seems to be working.

Precious metals gained on the day and following through from last week’s rally. Crude oil joined the party and recaptured the $50/barrel level but just stayed below $51. Of course, oil has been on a wild roller coaster ride this year ranging from a high of $55.03 to a low of $43.76 thanks to endless OPEC jawboning about production cutbacks, which have been making the headlines almost daily.

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One Man’s Opinion: 1999 Called, They Want Their Stock Bubble Back…

Ulli Market Review Contact

By Simon Black

File this one away under “Completely Obvious…”

Last night the parent company of Snapchat reported a quarterly loss of more than TWO BILLION dollars.

Snapchat, of course, is the photo-focused social networking app that’s adored by tweens and adults who still live with their parents.

(Talk about a lucractive demographic.)

The company IPO’d just a few months ago with a market capitalization of $30+ billion despite slowing growth and a history of never turning a profit EVER.

According to the company’s quarterly report its finances have gone from bad to worse.

Operating cashflow dropped from negative $92.5 million to negative $155 million; and its total loss for the quarter including stock-based compensation was $2.2 billion.

It’s incredible that this is the same company that was a Wall Street favorite just eight weeks ago.

In fact on its first trading day back in March, Snap’s shares surged 44% as investors clamored to own a piece of this loss-making company whose shares confer absolutely zero voting rights.

After yesterday’s horrific results, Wall Street seems to have woken up, and the stock tanked nearly 25% in after-hours trading.

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