Dow Sets A New Record

Ulli Market Commentary Contact

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

While the Dow managed to eke out a new record high, the S&P 500 and Nasdaq struggled all day to get back to even with the latter just coming up short. We traded lower for most of the session as a result up Trump’s unveiling of the much-hyped tax plan. Some of the most sweeping overhauls in decades were expected, but traders were less than impressed, which assisted the markets to recoup their early losses.

Actually, many interpreted the bill as having “little chance of passing,” which helped alleviate fears of a negative effect on equities, and the slow climb towards the unchanged line resumed. Hoping for status quo was the meme of the day, and bonds benefited as yields dropped allowing the 20-year bond (TLT) to rally and gain +0.44%.

Our ETF holdings fared very well with far more winners than losers. Taking top billing was Aerospace & Defense (ITA) with a chest pounding rebound of +1.76%. Financials (XLF) placed 2nd with a nice showing of +0.94% and even Semiconductors (SMH) produced +0.47% in the face of a weak Nasdaq. On the downside, the losses were tiny with International SmallCaps (SCHC) and Transportations (IYT) surrendering -0.16% and -0.05% respectively.

The US Dollar (UUP) was whipsawed all day in a fairly broad range but ended the session unchanged. ZH summed it up best: “The bottom line from the reaction by markets seems to be traders are not expecting this bill to pass at all… and bonds are signaling the recent reflation exuberance is now fading fast.”

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Honing In On New Record Highs

Ulli Market Commentary Contact

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

While the major indexes started the first November session with a bang, upward momentum waned, and the Nasdaq ended up slipping slightly into the red, while the Dow and S&P 500 remained green. The Fed kept interest rates unchanged but jawboned some positives about the economy using descriptive words like “activity has been picking up at a solid rate.” That’s an improvement in language over September when “moderate” was the term used to describe current goings-on.

On deck is Trump’s upcoming announcement on who will become the next Fed chair. At this time it looks to be Jerome Powell, whose dovish attitude towards interest rates is well known, which could be a positive for equities. The Earnings season has been viewed as strong so far with 75% of S&P companies having beaten analysts’ estimates.

The ETF space was mixed with winners and losers pretty much balanced. Heading higher were International SmallCaps (SCHC) with +0.50% and the Dividend ETF (SCHD) with +0.37%. On the losing side, we saw US SmallCaps (SCHA) take the lead by retreating -0.51%, closely followed by Semiconductors (SMH) with -0.27%.

Interest rates were mixed as well with the 10-year bond dropping 1 basis point to 2.37%. Yields have now been bouncing in a wide trading range since mid-April within a low of 2.05% and a high of 2.46%. Sooner or later a breakout will occur and determine the true direction of the major trend. The US dollar (UUP) was subdued as well but closed up +0.20%.

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Major Indexes Conquer October; Sporting Biggest Increase Since February

Ulli Market Commentary Contact

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

The month of October has been known as the bull market killer in the past. Not so this year, as the major indexes not only survived but prospered at the tune of +4.2%, +2.2% and +3.2% respectively for the Dow, S&P 500 and Nasdaq. The Dow actually rose at twice the pace it showed in September, while the Nasdaq remains the winner for the past 12 months. Helping matters was the VIX, which was pushed towards the 9 handle in early trading setting the bullish mood for the session.

In ETF space, we saw predominantly advances. Semiconductors (SMH) took the lead with a strong +0.96% compared to the S&P’s (SCHX) meager +0.08% advance. SmallCaps (SCHA) showed signs of life again by gaining +0.71%. Heading slightly south were Transportations (IYT) and Financials (XLF) with losses of -0.44% and -0.26% respectively.

Interest rates were mixed, but the yield on the 10-year bond managed to add 1 basis point to close at 2.38%—off its recent high of 2.46%. Consequently, the US Dollar (UUP) traded in a tight range and gained a tiny +0.08%. Gold slipped but Crude oil gained and remained above its $54 level.

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Indecision Reigns

Ulli Market Commentary Contact

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

Equities struggled with only the Nasdaq managing to spend some time above the unchanged line early on, and knocking out another intra-day record, but it too succumbed to weakness, before sliding slightly into the red.

Trump’s tax cuts were at the center of the market weakness, as the House was discussing a more “gradual phase-in for the corporate tax-rate cut,” against the President’s plan for an immediate reduction. Any danger of sudden changes being implemented is bound to affect markets, as the tax-cut has formed the base for recent market advances.

As uncertainty reigned, the ETF space was affected as well, and we saw more red numbers than green ones. Closing the session on a positive note were International SmallCaps (SCHC) and International Equities (SCHF) with gains of +0.70% and +0.24% respectively. On the downside, Transportations (IYT) took the biggest hit with -1.31% followed by US SmallCaps with -0.85%.

Interest rates headed south as the yield on the 10-year bond took a dive by losing 5 basis points to end at 2.37%, which helped the 20-year bond price (TLT) to finally show signs of life again by rallying +0.96%. The US dollar (UUP) headed the other way and lost -0.49%.

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One Man’s Opinion: Can Blockchain Prevent Government Overreach by Decentralizing Institutions?

Ulli Market Review Contact

By ZeroHedge

Government overreach is cited often using examples of pointless and harmful laws and their heinous results. Take, for instance, a case in 2012 that saw one Oregon man jailed for collecting rainwater from the ponds on his property. Oregon local law states that all water is a public resource, even reservoirs that reside on private property so technically, taking rainwater from his ponds was grounds for a 30-day jail term. Regardless of the blatant unfairness of such legislation, if he had a more comprehensive knowledge of them, perhaps he could have submitted his Standard Reservoir Permit in time and avoided his sentence.

Make no mistake, blockchain cannot nullify such laws, but it can help citizens in countries around the world to work with them and prove their compliance. Much government overreach happens because of inefficiency, but this is a poor excuse when blockchain exists. There are many evolving blockchain trends that will transfer power from centralized governments to the citizens under their thumb, including the internet of things, blockchain identification and voting platforms, and diverse financial markets.

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ETFs On The Cutline – Updated Through 10/27/2017

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 248 (last week 272) 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.