ETF Tracker Newsletter For January 20, 2017

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ETF Tracker StatSheet

https://theetfbully.com/2017/01/weekly-statsheet-for-the-etf-tracker-newsletter-updated-through-01192017/

Gold Pops As Dollar Drops

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

An early rally gave way to a pullback, but the major indexes managed to claw back towards the end of the session and closed up but, for the week, the S&P 500 lost modestly by surrendering 4 points.

Of course, the inauguration took center stage as Trump was sworn in as the 45th President. Today’s modest advance in the markets marks the first time in more than 50 years that a new commander-in-chief has been greeted by rising equities on his first day in office.

Gold continued on its upward path and still remains 2017’s winner YTD while the Dow barely moved to the plus side. Financials suffered their worst week since early September 2016, and the dollar index fell for the 4th consecutive week, which is its longest losing streak in almost a year.

History shows that, aside from the first day, the S&P 500 has fallen by a median 2.7% in the month after each new president has taken over the White House since Herbert Hoover in January 1929, according to Reuters. Let’s wait and see if Trump can break this dubious record as his presidency gets underway.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 01/19/2017

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ETF Data updated through Thursday, January 19, 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 +1.36% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Equities Fall Ahead Of Inauguration

Ulli Market Commentary Contact

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

It was a mixed bag with upbeat economic news not being able to offset the anxiety about tomorrow’s inauguration. Besides sinking equities, bonds and gold dropped as well while the US dollar and crude oil bucked the trend and closed up.

On the economic front, housing starts rose but building permits inched slightly lower. Weekly initial jobless claims declined by 15k to 234k last week, which was below forecasts of 254k.

With the elite meeting in Davos, Switzerland, being in full swing, I saw this story confirming what I have been saying for a long time that all markets are manipulated by central banks. In this almost humorous article, China orders no market selloffs during President’s Davos trip:

State-owned investors bought shares to steady the market on Monday, while some funds were guided on Tuesday not to sell holdings with big weightings in benchmark indexes, the people said, asking not to be identified because they aren’t authorized to discuss the matter publicly. China’s securities regulators asked funds and brokerages to trade prudently this week and directed exchanges to report any abnormal transactions, the people said.

To be sure, Chinese authorities have traditionally intervened in markets before and during events of political significance, with government funds stepping in to boost stocks before a key meeting of the National People’s Congress last year and before a 2015 military parade celebrating the 70th anniversary of the World War II victory over Japan.

This is simply another confirmation that market manipulation is alive and well.

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Financials Provide A Last Minute Boost

Ulli Market Commentary Contact

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

It’s been no secret that the post-election rally hit a speed bump with the S&P 500 having moved within a 4 point range, on a closing basis, for the past 2 weeks. Anxiety continues to prevail as to whether Trump can really deliver on his campaign promises.

Retail shares were the anchor weighing on the S&P and Nasdaq early on but the financials (+0.8%) proved to be the savior of the day pushing the indexes up late in the session. Giving the assist was Fed chair Yellen opining in a speech that it “makes sense” to gradually lift interest rates. However, the Dow closed at 2017 lows pulled down by Healthcare and telecommunications.

The higher rates theme shifted things into reverse with the dollar rallying, after taking a drubbing over the past few days, while the winner year-to-date, gold, retreated. Bonds closed lower as interest rates rose. I expect this sideways pattern to continue until Trump has been inaugurated this Friday. Next week, with the election soap opera finally behind us, we may hopefully see better directional clues for the market. The big unknown is whether it will be up or down.

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Indexes Slip On Trump And Brexit Uncertainty

Ulli Market Commentary Contact

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

Uncertainty gripped the markets as remarks from President-elect Trump about the dollar being too strong pulled the starch out of any upside momentum, and the major indexes spent the session below their unchanged lines with the S&P 500 losing a modest -0.30%.

Not helping equities were remarks from U.K. Prime Minister May detailing Brexit plans, which sparked a huge rally in the British Pound. As the Dollar weakened, interest rates pulled back with the 20+ year T-Bond ETF (TLT) rallying +1.05%, which in turn put pressure on the Financials (IYF), which dropped -1.55% for the day. Even better-than-expected quarterly earnings from Morgan Stanley (MS) could not stem the slide.

The clear winner of the day was gold, which gained $19.40, or 1.62%, breaking back above the $1,200 level. This post-election equity rally was in part based on the surging dollar, which moved very much in sync with the S&P 500. And then this happened:

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One Man’s Opinion: The Equation That Explains It All

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OneMan'sOpinionAuthored by Mark St.Cyr,

If you were just woken from some form of suspended animation from let’s say 2010 (ancient economic history in today’s terms) then informed of the current state of global political affairs and upheavals, U.S. employment (95+million not,) global currency gyrations, interest rates at not only 0% but some -0%, threats of escalating wars, threats of major confrontational war, GDP of the major global economies not only contracting, but below statistical stagnant, governments, as well as central banks with balance sheets of debt calculated in $TRILLIONS, some in the 10’s of, all financed at near or below 0%, and the Fed is only about a week away from raising rates into the teeth of what can only be called “uncertainty,” and much, much more. (There isn’t enough time, or digital ink to list them all.)

Nobody would be surprised if your first reaction based on your prior acumen (the ancient history of 7 years ago whether it be in stocks, business, or both) would to become immediately concerned that whatever portfolio, or wealth you may have had in the markets, may be worth far less today than when you were first put to sleep. And probably becoming ever smaller as you thought about what you might need to do next in order to preserve any that may be left.

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