Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 01/12/2017

Ulli ETF StatSheet Contact

ETF Data updated through Wednesday, January 12, 2017

TOC082516

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

TTIClick 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 +1.63% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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The Trump Trade Deteriorates

Ulli Market Commentary Contact

Thur pic

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

Things started out to the downside with the S&P 500 sliding almost 1% after Wall Street had some time to digest President-elect Trump’s press conference. Disappointment spread as he chose not to discuss details of his proposed economic policies that were the main driver behind the post-election rally. However, the indexes were magically lifted later on in the session saving equities from their worst day in 3 months.

This brings into question as to whether Trump can actually push his agenda through in a timely manner. If not, there is a high probability that market volatility will increase and with it the possibility of equities giving back some of their gains. After all, markets are in bubble territory when viewed based on economic fundamentals; however, they can stay in the mode until, one day, wishful thinking along with hope give way to reality. Historically, it always does, however, the timing of it is the big unknown.

In economic news, Fiat/Chrysler’s stock price crashed over 14% and trading was halted. The old cockroach theory was verified: If you see one, there are others in hiding. Turns out that Fiat has been accused of engaging in a similar scheme as Volkswagen by using cheating software to beat diesel emissions tests. Makes me wonder who is on deck next.

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A Choppy Session Marked By A Late Rebound

Ulli Market Commentary Contact

Wed pic

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

It was a wild ride for the major indexes as they vacillated above and below the unchanged line depending on the words of the moment during President-elect Trump’s first formal news conference since the election.

Case in point was the punishing effect on Biotech/Pharma stocks when Trump opined that that industry “was getting away with murder,” and that “we need new bidding procedures.” That’s all it took and Biotech/Pharma plunged the most since Brexit in June of 2016.

In the end, the S&P healthcare index ended the session down -1% after falling as much as 1.9% earlier on. The Biotech index was not as fortunate and sank -2.96%. That ended a 6-day winning streak for both indexes. Worries about the sector eased later in the session as Trump remained vague about any details on healthcare proposals.

Wall Street is in caution mode due to 2 big upcoming events namely the start of earnings season this Friday and Trumps inauguration a week later on January 20th. We now need to see some evidence that earnings are better than expected and can justify the market’s sugar high and that Trump will be able to deliver on his promises. Any disappointment and it may take a while longer for us to get to Dow 20k.

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A Mixed Picture: S&P Flat, Dow Down And Nasdaq Up

Ulli Market Commentary Contact

tue-pic

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

US oil got spanked again at the tune of -2.19% on top of yesterday’s 3.85% loss, hurting the energy sector and negating advances in the financial and healthcare arenas. The S&P was unchanged, but the Nasdaq managed to buck the trend again by advancing +0.36%.

Midday, it looked like the Dow might be successful with another attempt to conquer the 20k level by reaching 19,950, but selling pressure set in and down we went. I suspect that we may see more of this aimless meandering as traders are awaiting earnings season, and the January 20th inauguration, to get a better sense as to not just how but if Trump’s ambitious economic plan plays out as advertised.

In other words, the post-election exuberance has reached an end, and Wall Street appears to have settled into a wait-and-see mode before pushing the indexes further into bubble territory. Any suggestion that earnings are not what was expected, or Trump’s plans are not executable within a reasonable amount of time, and we’ll undoubtedly see a negative reaction in equities.

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Slowing Momentum

Ulli Market Commentary Contact

mon-pic

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

At least for today, New Year momentum slowed as the major indexes predominantly hovered below the unchanged line and closed at their lows for the session. The exception was the Nasdaq, which managed to eke out a gain of +0.19%.

It was a tale of opposing market forces as technology strength was offset by weakness in financials and the energy sector. Oil took a beating and lost -3.85%. Bonds pulled back as Treasury yields rose slightly. The dollar came off its lofty level and, as a result, gold was the winner by adding +0.80%.

It seems right now we are in a holding pattern with earnings on deck as Wall Street is dealing with the political uncertainty as to whether Trump will be able to deliver on tax cuts, lighter regulation and fiscal stimulus.

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One Man’s Opinion: January 2017 Earnings Are Going To Be A Bloodbath

Ulli Market Review Contact

OneMan'sOpinionBy EconMatters

We discuss a preview of January`s Earnings releases and how massive the gap down in most of these stocks will be when they report in a month. There have already been two earning`s guide downs from industrial companies this past week in UTX, and HON.

But with the run up in financials and energies for the last month we are going to experience big $5 chunks taken out of these stocks and massive after hours and pre-market gap downs that will cause entire sectors to sell off during earnings in January. It is just going to be brutal, expect 500 point down days in the Dow during this upcoming earnings period.

You have seasonal stocks that selloff every year like Apple and Amazon, as the 4th quarter is their best by far for sales and revenues. And you have energy companies with exorbitant p/e ratios like COP, XOM, CVH that are priced for $115 dollar oil not $55 oil that 4th quarter earnings releases are going to bring some fundamental realities back to investors of how overpriced these stocks are right here.

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