ETFs On The Cutline – Updated Through 03/31/2017

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 231 (last week 221) 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 March 31, 2017

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ETF Tracker StatSheet

https://theetfbully.com/?p=18736&preview=true

A Great Quarter Ends With A Whimper

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

While it was a great quarter for the indexes, it ended with a whimper as equities could not sustain the upward momentum into the close. Most of the gains were made in January and February while March was a non-event month for the S&P 500, which went predominantly sideways and ended up losing 1 point, while gaining a solid 5.5% for the quarter.

On the downside, energy was the big loser for Q1, financials rallied for the first 2 months peaking on March 1, after which it was downhill with a late bounce off the unchanged line. Tech was the big winner and was well represented by the performance of SMH, which is featured in our “ETFs in the Spotlight” column (section 2).

The one-way trade award for the quarter goes to the US dollar which, despite a February rebound, ended up to the downside in the process supporting gold, which continued its upward march off the December lows. SmallCaps lost some of their luster this month but managed to get back within striking distance of the unchanged line.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 03/30/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, March 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 +2.69% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Dollar Rallies And Pushes Equities Higher

Ulli Market Commentary Contact

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

The US dollar rallied for the 3rd day in a row (+0.54%) and conquered its psychologically important 100 level. The main support came from the latest 4th quarter 2016 GDP upward revision from 1.9% to 2.1%, which may help the dollar to notch its first weekly advance in three.

Crude Oil joined the upward thrust by adding +1.58% and reclaiming the $50 barrier for the first time in a couple of weeks. Who knows how long that will last as this move was based on the latest jawboning by Kuwait’s oil minister in regards to talks on extending production cuts. Yes, we’ve seen that movie before, and we know how it ends.

It appeared that the Trump trade, which showed signs of weakening throughout most of March, was back on today as some of the recent “weaklings” like transports and small caps managed to gain the most. Banks as well ended to the plus side, interest rates rose with the 10-year Treasury yield ending at 2.42%, while gold headed south and lost -0.80%.

The question in my mind is whether today was just an aberration attributable to quarter-ending window dressing or a return to the Trump trade. I don’t think we’ll find out tomorrow, the last day of the month, but we might get a better idea next week if today’s upward momentum has legs.

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Energy Provides Support For The Bulls

Ulli Market Commentary Contact

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

Finally, the energy sector showed some signs of life with the widely followed XLE gaining +1.3% for the day while barely crawling back above its 200-day M/A by a fraction. XLE has been in a solid downtrend since early December 2016. Oil gave an assist as well by rebounding +2.15%. More help for the bulls came from the consumer sector (XLY), which added +0.60% for the day after bouncing of its 50-day M/A three days ago, but it’s too early to tell if that is the continuation of the recent bullish trend or just a dead cat bounce.

The major indexes started the day below the unchanged line but, as we’ve seen recently, were magically pushed higher throughout the day closing mixed with the Nasdaq leading the pack by adding +0.38%. While the benchmark S&P 500 was able to eke out a tiny gain of +0.11%, it still down for the month by a fraction of a percent.

Wall Street is still in limbo trying to figure out what to make of the Republican’s failure to pass a health care bill and if there could be more fallout in regards to Trump’s agenda of tax reform and massive infrastructure plan. While no one has an answer yet, I believe that these plans will not come of fruition until 2018 at best and at reduced numbers. If that proves correct, the markets will have to deal with the fact that they again may have gotten ahead of themselves. I wonder when that reality will sink in.

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Stocks Rebound In The Face Of A Rallying Dollar And Higher Rates

Ulli Market Commentary Contact

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

Yesterday, I talked about how the Dow was on its worst losing streak since 1978 if it would hit one more down day. That dubious record was prevented as, right out of the gate this morning, the computer algos went into overdrive by slamming the VIX (volatility index) on 4 different occasions to make sure that the major indexes not just rebounded but also maintained their upward momentum. At the end of the day, all three indices ended solidly in the green, and the mission was accomplished.

The helping headline that Consumer Confidence soared to the highest level since the peak of the dot-com bubble in 2000 gave an assist but had some questioning the accuracy of that statement. Meanwhile, Gallup presented some different numbers as their most recent survey showed that the US Economic Confidence Index (ECI) dropped six points for the week ending March 26, which is the lowest weekly average since the presidential election. Makes me wonder how such divergence is possible.

Across the markets, banks finally managed to pick up some steam after the recent drubbing, the dollar index rallied +0.58% but still stayed below the psychologically important 100 level. Interest rates rose with the 10-Year Treasury gaining 4 points to settle at a yield of 2.42%.

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