ETF Tracker Newsletter For October 27, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/10/weekly-statsheet-etf-tracker-newsletter-updated-10262017/

A SLOW START FOLLOWED BY A STRONG FINISH

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

The week started out slow, and it looked like the major indexes might finish to the downside. Well, that did not happen as Amazon’s good results today put some fuel under the Nasdaq with the index rocketing higher by +2.2%. Not to be outdone, the S&P 500 raced into record territory as well, but by a smaller margin. Lagging the duo was the Dow, which barely close above the unchanged line.

This is the 5th weekly rise in the Nasdaq and the 7th in a row for the S&P and Dow. The VIX was crushed below 10 thereby lending an assist to the bullish crowd. Our ETF holdings performed nicely with Semiconductors (SMH) sporting a gain of +2.01%, followed by Emerging Markets (SCHE) with +1.21% and LargeCaps (SCHX) with +0.80%. Aerospace & Defense (ITA) was the only one showing a red number as it lost -0.12%.

While bond yields were higher for the week, today interest rates dropped allowing the 20-year bond (TLT) to score a gain of +0.66% thereby interrupting the recent losing streak. Gold and Crude oil followed the bullish equity theme and closed higher, while the US dollar (UUP) followed suit by adding +0.24% to yesterday’s gains.

Read More

Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 10/26/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, October 26, 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 +2.74% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

Read More

Treading Water

Ulli Market Commentary Contact

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

Some better than expected corporate earnings helped the major indexes to shake off yesterday’s bearish mood and remain above the unchanged line with the exception of the Nasdaq, which slipped a tad. Helping the markets was news that the House of Representatives squeezed out a budget bill allowing the Senate to later pass a tax reform package with a simple majority instead of 60 votes.

The predominant trend for the session was sideways, which was reflected in modest ETF performance. Yesterday’s loser, namely Transportations (IYT) came roaring back with a +0.94% showing and outclassing Semiconductors (SMH) with +0.54%. MidCaps (SCHM) had a nice session as well with a gain of +0.41%. On the losing side, we saw Aerospace & Defense (ITA) give back -0.85%.

The yield on the 10-year bond rose again by 2 basis points to 2.46%, its highest level in 7 months. It is now honing in on the high for the year (2.62%), which was made in March. I will be watching the rise in yields closely, as they eventually will become a threat to equities. As a consequence of higher rates, the US dollar (UUP) benefited and sprinted sharply higher by gaining +1.07% to reach its highest point since July.

Read More

Coming Off The Highs

Ulli Market Commentary Contact

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

Some earnings disappointments pulled the rug out from under the major indexes causing them to drop around -0.5% across the board. The big losers were Chipotle (CMG) and AMD, which tanked -14.58% and -13.47% respectively. Also weighing on the markets were Boeing, Goldman, IBM and Caterpillar. Looking at the big picture, all S&P sectors ended in the red.

As you can see from the above chart, momentum slipped early on to a low around mid-day, after which the usual afternoon levitation started, except today it wasn’t enough to crawl back above the unchanged line. Keeping the indexes in check was the VIX, which spiked above 13, but then puked, at which time the rebound materialized.

In ETF space, the picture was similar in that green numbers were nowhere to be found. As is the case with most pullbacks, the biggest winners usually give back the most. Today was no exception as Transportations (IYT) and Semiconductors (SMH) retreated -1.52% and -1.27% respectively. Holding up the best were Emerging Markets (SCHE) with -0.22%.

Treasury yields rose again pushing the price of the 20-year bond (TLT) down by -0.48% to a low last seen in August. In other words, the 6% bond rally, which started in August, has now been completely wiped out. The US dollar (UUP) moved in a tight trading range and closed the session -0.25% lower.

Read More

Dow Powers Into Record Territory

Ulli Market Commentary Contact

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

The Dow got a huge assist today from Caterpillar (CAT) and 3M, which jumped after showing a better than expected quarterly report card. Both components contributed some 150 points to the Dow’s 168 point gain—into record territory. It was a narrow advance with Healthcare (XLV) bucking the overall positive trend (-0.56%) thereby limiting broad participation.

Things got a little chaotic late in the session as headline news broke about senators Flake, McCain and Paul apparently standing in the way of Trump’s tax plan, the positive outcome of which is still questionable but has been the basis of the recent market advances. Nevertheless, the affect on equities was only minor—so far.

The color green was prevalent across all of our ETF holdings, and the gains were steady but not spectacular due to the S&P 500 and Nasdaq lagging the Dow. Leading the bunch were Semiconductors (SMH) and International SmallCaps (SCHC), which gained +0.61% and +0.28% respectively. On the bottom of the totem pole, we saw the Dividend ETF (SCHD) and Aerospace & Defense (ITA) adding +0.12% and +0.13%.

Interest rates rose with the 10-year bond yield climbing to break the 2.40% level, which we saw last in April. Crude oil settled above the $52 marker and the US dollar see-sawed but ended the day up by +0.16%.

Read More

Dow & S&P 500 End 6-Day Winning Streak

Ulli Market Commentary Contact

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

It had to happen eventually. The winning streak came to an end today, as uncertainty reigned in regards to tax cuts and corporate earnings, of which some 200 S&P companies are scheduled to report this week. Of course, given current market levels, we are way overdue for a pause.

Interestingly, the markets did not find any footing during the session, as we have become accustomed to, and ended up closing at the lows for the day. As ZH reports, it has now been 242 days since the US equity market has dipped by 3% or more… a new dubious all-time record, and to me another confirmation that markets are manipulated. As far as today is concerned, stocks had their worst outing in 6 weeks.

Despite the major indexes slipping, we saw some green numbers in ETF space. Gaining the most was our winner YTD, namely Semiconductors (SMH), which managed to buck the Nasdaq’s downtrend by gaining +0.38%. Divided ETFs (SCHD) also closed on the positive side with +0.08%. However, red numbers were dominant with Emerging Markets (SCHE) giving back -0.80%, while Aerospace & Defense (ITA) and SmallCaps retreated -0.70% and -0.67% respectively.

The yield on the 10-year bond ended up dropping 1 basis point to 2.38% after having tested higher ground all day, namely the 2.40% level. Gold was lower for most of the session, then suddenly spiked and managed to reclaim its 100 day M/A level. The US dollar (UUP) rallied but faded into the close with a tiny gain of +0.12%.

Read More