Slow Start Following Four Week Run

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

After ending last week at a record high, the U.S. stock market pulled back Monday ahead of a week that features a big onslaught of corporate earnings results, a key meeting on interest rates and a barrage of fresh economic data.

Stocks are riding high on four straight weeks of gains, driven by a better-than-expected start to the Q2 earnings season, continued propaganda that the U.S. economy is holding up following Britain’s vote to exit the Eurozone, and hopes among investors that central bankers from around the globe will continue to be supportive, which at this time is a given.

In earnings, nearly 200 companies in the S&P 500 are due to release quarterly profits this week. Thus far, about 68% of the 26% of companies have reported. However, even with the modest pick up in earnings, if only relative to expectations, “the blended earnings decline is still -3.7%, putting the quarter on pace for the fifth consecutive decline in earnings since Q3 2008 through Q3 2009”, as one analyst put it.

In M&A news, a winner was finally crowned for the takeover of Yahoo’s (YHOO) core business. That winner is Verizon (VZ). Verizon made the official announcement that it is paying $4.8 bil in cash. The telecomm giant will pair Yahoo with AOL, which it bought last May.

And on the economic front, anticipation will be high awaiting the first reading on second quarter economic growth after the first quarter of this year saw a disappointing 1.1% GDP. Tomorrow, we will get the latest data reading on new home sales and consumer confidence, and on Wednesday durable goods orders are set for release.

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One Man’s Opinion: Could This Rally Be A Head-Fake?

Ulli Market Review Contact

OneMan'sOpinionBy Charles Hugh Smith

If there’s nothing supporting this rally but euphoric sentiment arising from orchestrated buying, any eruption of reality will reveal the rally as a head-fake.

Let’s say you wanted to engineer a stock market rally that triggered every technical “buy” signal and wiped out those who are short the market–what would you do? First, you’d engineer a new all-time high to signal “all clear for further advances.”

Then you’d crush volatility as measured by the VIX, signaling that there is nothing standing in the way of more advances.

Next, you’d engineer new highs every day for a week or more.

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ETFs/Mutual Funds On The Cutline – Updated Through 07/22/2016

Ulli ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 381 ETFs, of which currently 506(last week 332) are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher. Volume figures can change in a hurry, so be sure to check first before investing.

These ETFs are generated from my selected list of 98 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. 81 ETFs (last week 83) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 730(last week 711) above the line and 50 below it out of the 780 that I follow.

Take a look:

  1. ETF Master Cutline Report
  2. ETF High Volume Cutline Report
  3. MF 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/No Load Fund Tracker Newsletter For July 22, 2016

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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https://theetfbully.com/2016/07/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-07212016/

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Market Commentary

S&P 500 NOTCHES 7TH RECORD HIGH FRIDAY DESPITE SOUR ‘POST-BREXIT’ DATA

Fri chart

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Overall, it was a great week for the market here in the U.S. The S&P 500 hit a fresh record high today (its seventh this year) a day after the Dow fell from a nine-day run, wherein also notched a record high this week  It seems investors are keeping their eyes on quarterly earnings reports and the release of the first post-Brexit economic data from Britain and Europe.

The surge higher for U.S. stocks has been driven in part by a decent start to the Q2 earnings season, as reports are coming in better than originally feared but are still negative. Heading into today’s trading session, 67% of the 103 companies that have reported in the S&P 500 have topped results, which is above the long-term average of 63%.

In addition to getting fresh earnings today from names like General Electric (GE) and Honeywell (HON),  both which failed to impress what was forecasted, Wall Street is also digesting fresh manufacturing data from Europe and Britain, the first such data since the so-called ‘Brexit’ vote last month.

Again, as I have repeatedly posted, the Fed is no longer data dependent in its planned actions but is only concerned with propping up asset markets to keep the illusion of the recovery alive. Even a former governor has now admitted as much. While that theme can go on for a while, eventually it will end up badly as a correction to fair market value will have to occur; the uncertainty is just the timing of it. That’s why we always need to be aware and prepared to head for the exit doors once market behavior dictates such a move.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 07/21/2016

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, July 21, 2016

TOC072116

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

Important announcement: Please note that I am in process of expanding the ETF portion of the StatSheet to bring you a wider variety of High Volume ETFs. I will be discontinuing the mutual fund portion, which I have a featured as a courtesy only for many years. Times are changing and ETFs are the product of the future. To further assist those having to invest in mutual funds with their 401ks, I will post access to a “mutual fund to ETF converter.” This change is scheduled to take effect around the end of July.

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 4/4/2016

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in above chart) remains above its long term trend line (red) by +2.73% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Winning Streak Snaps; Markets Pause

Ulli Market Commentary Contact

thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

As you know, the Dow has been riding the bull for 9 day continued winning streak that hasn’t happened in three years. Unfortunately, that streak snapped today due to mixed earning reports here in the U.S. and an announcement from the European Central bank that they will hold off on additional stimulus following last month’s ‘Brexit’ vote.

The Dow, which notched its seventh straight record high Wednesday, was dragged down today by Intel (INTC), whose shares fell more than 4.3% after the company’s revenue fell short of estimates in its quarterly results released last night. Shares of American Express (AXP), another Dow component, were also trading 2.1% lower after a similar revenue miss.

In auto earnings news, we heard today that General Motors (GM) turned a profit of $2.9 billion in Q2, which easily surpassed Wall Street’s expectations. Notable drivers of sales growth were increased earnings in China and the Americans, whose citizens continued buying expensive trucks, sport-utility vehicles and crossovers.

On the economic front, existing home sales rose, jobless claims surprisingly contracted and the Leading Indicator topped forecasts. Crude oil and the U.S. dollar headed south while gold staged a nice rebound after showing weakness during the past week.

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