Fed Speak Keeps Markets On Edge

Ulli Market Commentary Contact

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Despite BofA reporting its first profit increase in three quarters, it wasn’t enough to keep the markets above the unchanged line. Offsetting the positive tone were some weak economic data points in form of industrial production contracting for the 13th straight month, its longest non-recessionary streak ever. Adding to this misery was a big miss by the Empire Fed with the index sliding to 5 months lows as new orders continued to skid.

Against this backdrop, conflicting statements in regards to the timing of a possible rate hike has kept everybody on edge. There was Fed Vice Chairman Fischer’s warning that “economic stability” could be threatened by low interest rates yet he mentioned that “it was not that simple” for the Fed to raise rates. Of course it’s not that simple if you are beholden to Wall Street and are trying to avoid a correction to fair market value at all costs.

So, it appears that, all of a sudden, low interest rates are no longer a good thing and neither are higher ones. If you find that confusing, you are not the only one. I don’t think there is any better way to talk out of both sides of your mouth, but we’ll have to wait and see if we will hear more non-committal words of Fed wisdom in the future.

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One Man’s Opinion: Three Reasons Why The Banking System Is Rigged Against You

Ulli Market Review Contact

OneMan'sOpinionBy Simon Black

If there were ever any doubt about how completely RIGGED the banking system is against depositors, allow me to introduce the following:

Exhibit A: Governments are working to make banks LESS safe

Yesterday an unelected bureaucrat that no one has ever heard ofmade a stunning announcement that has sweeping implications for anyone with a bank account.

Dombrovskis is Europe’s top financial services official, so he controls bank regulations in the European Union.

He issued a stern warning to global bank regulators yesterday that he is prepared to reject any further plans they might have to tighten bank capital requirements.

This might sound rather dry, but it’s incredibly important.

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ETFs On The Cutline – Updated Through 10/13/2016

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 254 (last week 280) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line 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 October 14, 2016

Ulli ETF Tracker Contact

ETF Tracker StatSheet

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https://theetfbully.com/2016/10/weekly-statsheet-for-the-etf-tracker-newsletter-updated-through-10132016/

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Market Commentary

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The day started on a positive with the major indexes bouncing higher by some 0.75% supported by stronger than expected results in the financial arena. However, economic data points were negative across the board ranging from rising producer prices (the most since 2014), retail sales growth slumping to its weakest point in a year to consumer confidence crashing to 2-year lows.

Not helping matters was the problem child of the year, namely Deutsche Bank, after announcing that they will fire another 10,000 bankers bringing the total layoffs to about 20% of their workforce. This task will most likely take several years to accomplish making me wonder whether they will actually be around that long to reduce costs to that extend.

But, pulling the rug out under today’s early rally attempt was Fed chief Yellen’s unnerving commentary on the economy. In a speech to policymakers and academics, she laid out the scenario that “the US economic potential is slipping and may need aggressive steps to rebuild it.” That sounds to me like the Fed plans on being accommodative a while longer despite traders having priced in a 67% chance of a rate hike in December.

In the end, it’s all one big guessing game, and we will simply have to wait and see how things play out once the election soap opera has finally come to an end on November 8th.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 10/13/2016

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, October 13, 2016

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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

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Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) remains above its long-term trend line (red) by +1.47% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Clawing Back

Ulli Market Commentary Contact

thur-pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities continued their downward trend following weak Chinese data but a turnaround in oil prices pulled the major indexes back up and limited the decline to -0.31% for the S&P 500.

The negative catalyst was Chinese exports falling 10% in September, which was far worse than expected while imports also shrank unexpectedly.

Adding to that is the continued uncertainty about the upcoming elections and the ever increasing mudslinging, which has turned this event into the most watched soap opera. This is the time to maintain a limited involvement along with a conservative exposure in the markets as sudden events could rock the boat severely.

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