Equities Lower; Precious Metals Higher

Ulli Market Commentary Contact

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

An early rebound attempt ran out of steam as the Fed paraded a couple of their mouthpieces, who managed to spew some words of hawkishness to undermine any positive market momentum. First it was Fed’s Harker, who caused some worries with announcing that we “can’t rule out more than 3 hikes this year,” which was followed by Fed’s Evans with “more upside possibility in uncertainty facing Fed,” and then this bon mot:

“This is a challenging time period to all of a sudden have a big injection of positive fiscal policy expansion because we are pretty close to full employment. We might be at full employment.”

To me, that sounded like if Trump even attempts any fiscal boost, like infrastructure spending, it may very well be met with additional rate hikes, which is not exactly soothing for the nervous crowd on Wall Street.

In the end, the pullback was minor as the major indexes recovered thanks to the usual last hour ramp thereby keeping any losses to a minimum. Retail stocks continued to get clobbered; High Yield bonds slipped again, as did the 10-year Treasuries but gold managed to hold on to its March gains.

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One Man’s Opinion: Beware The Ides Of March

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By Jeff Thomas

Eidus Martiae is the Latin term for 15th March, from the traditional Roman calendar. Since 44 BC, the Ides of March has held a dark reputation, as that was coincidentally the date of the assassination of Julius Caesar.

In December of 2016, the Chairman of the Federal Reserve announced that the Fed was likely to raise the interest rate several times in 2017. The next such rise is anticipated to take place on 15 th March.

This is also an interesting date, as it’s the date upon which the US government reaches its debt ceiling. This was cast in stone by the previous administration, back in 2015. Although they put into place an automatic freeze on any increase in debt after that date, they did nothing to either cut back on expenditure or prepare for further funding. Therefore, the Ides of March once again has become ominous, as the US government is set to come to a grinding halt as soon as the money presently in the Treasury runs out.

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ETFs On The Cutline – Updated Through 03/17/2017

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 224 (last week 217) 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 17, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/03/weekly-statsheet-etf-tracker-newsletter-updated-03162017/

EQUITIES DIP AND DOLLAR PLUNGES

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

Stocks dipped slightly today but managed to squeeze out a gain for the week with the S&P 500 adding 5 points or 0.2%, which is not a particularly noteworthy performance but, given the uncertainty in Europe along with the Fed’s move on interest rates, we could have ended up far worse.

The US dollar, on the other hand, was not as fortunate and got clobbered resulting in its worst week in some 8 months. It is now down over 3% for this quarter. The yield on the benchmark 10-year Treasury came off its 30-month high of 2.62% and ended down 2.53%, causing a rebound in the bond market. That helped HYG (high yield bond ETF) to recover a bit and bounce of its major support trend line.

Financials had their 2nd worst week of the year while gold remained on its recent bullish path. Today was quadruple option expiration day, which results in higher than normal volume but also tends to distort price levels. With this now behind us, I am curious to see if other main issues such the debt ceiling debate, which certainly will affect market direction, will finally be addressed in the coming weeks.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 03/16/2017

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, March 16, 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 +3.08% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Equities Edge Down As Gold Jumps

Ulli Market Commentary Contact

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

After yesterday’s “good news” by the Fed that interest rates will be hiked, which produced a nice rally, today’s action was range bound as the major indexes hovered close to the unchanged line with only the Nasdaq eking out a meager +0.01% gain. To get upward momentum soaring again, we need more news of a continuously weakening economy accompanied by much higher rates. Of course, I am being facetious, but you get the point…

The dollar (UUP) dropped again but only by a small margin (-0.35%) to reach a 6-week low. That, along with political uncertainty, was enough to send gold soaring again, and it rallied for the second day in a row by adding +2.13% and remaining solidly north of the $1,200 milestone marker. Silver joined the move and broke back above a key technical level.

Healthcare stocks suffered with the index dropping -0.9% as President Trump announced higher regulatory costs for the sector along with a cut in federal funding for medical research. Sure, those plans are a long ways away from becoming reality, but the theme at least for today was “it’s better to get out early with profits than sell later at a loss.”

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