Stocks Rock And Drop

Ulli Uncategorized Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

An early rally failed but left the major indexes near multi-months highs despite a late session pullback. It looks like the computer algos continue their push towards all-time highs on no news other than that oil not only climbed above the $50/bbl level but also closed there. The fly in the ointment was that volume was the lowest for the year 2016, which makes this rally suspect.

Investors continued to digest Fed chief Yellen’s remarks as to whether they might be at the verge of delaying the timing of future rate hikes because of last week’s horrific unemployment report. Eventually, Wall Street participants will have to realize that any delay of an interest rate hike is predominantly a function of a weak economy and a potential recession.

It means, as I have repeatedly posted, that the S&P 500, as the major benchmark index, is totally disconnected from underlying US Macro data. ZH featured an updated chart that posts the question “Who will be proven correct?” Take a look:

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Front-running Yellen’s Yodeling

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Front-running Fed chief Yellen’s speech was the idea of the day on hopes that Friday’s bad jobs report would be great news for the markets. Forget the Dow today, it was all about the S&P 500 as it set a 2016 closing high in today’s trading, after Fed chair Janet Yellen hinted at a relatively upbeat view of the U.S. economy, despite the horrific May jobs report.

However, in a speech that Wall Street was closely watching, Yellen noted that the Fed may still feel it is appropriate to gradually increase borrowing costs if the labor market regains momentum and inflation perks up. There was no indication as to when the next hike may be though. In other words, no Fed commitment should mean further upward momentum for the markets, no matter how poor the fundamentals, which also means we are about to make new all-time highs in the near future as soon as we get some more negative economic data points, After all, it’s all about maintaining market levels and the chosen tool for this accomplishment is continued dovish/hawkish jawboning by the various Fed mouthpieces.

In commodities news, it seems that oil, gold and silver might be heading towards a bull market in the summer months, which would end a 5-year drought. The speculation is mostly due to the fact that gold is on course to snap three straight annual declines and silver is also higher as concern over the health of the global economy and the dollar’s retreat has boosted demand for precious metals as stores of value.

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One Man’s Opinion: The Five Stages Of Central Bankers’ Failure

Ulli Market Review Contact

Man

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Central bankers not only continue to insist their free money for financiers will eventually “trickle down” to the masses–they’re angry that the masses aren’t buying it. Central bankers are now blaming the masses for maintaining a perverse psychological state of disbelief in the omnipotence of central banks and their policies.

Central bankers are raging at the psychology of hesitant households, which they finger as the cause of global weakness: if only people believed everything was great, they’d borrow and blow tons of money, and the ship would leave port with a full head of steam.

The central bankers have spent seven years constructing “signals” that are supposed to create a psychological state of euphoria that leads to more borrowing and spending. The stock market is at all-time highs–don’t those stupid masses get it? That’s the “signal” that all’s well and they should get out there and borrow more money to enrich the banks!

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ETFs/Mutual Funds On The Cutline – Updated Through 06/03/2016

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 344 (last week 338) 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. 86 ETFs (last week 80) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 588 (last week 322) above the line and 192 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.

Note: As posted last week, the “ETFs/Mutual Funds On The Cutline” report has been moved from Mondays to Saturdays so that you can use the information over the weekend in preparation of any trades you plan on making. Many readers had requested this change.

ETF/No Load Fund Tracker Newsletter For June 3, 2016

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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https://theetfbully.com/2016/06/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-06022016/

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Market Commentary

STOCKS IN RED AFTER DISAPPOINTING JOBS FIGURE

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The “big” jobs report that analysts and investors alike were eyeing came in lower than expected, to say it politely; actually it was a total dud. 160,000 jobs were expected…and the survey says…38,000. The numbers are of course sub-par and will likely re-ignite worries among investors as to the trajectory of the U.S. economy heading into the summer.

At the same time, the numbers for the past two months were revised and actually 59,000 less than reported. Hmm, makes me wonder if the next month’s upcoming revision reduces jobs into negative territory for the month of May.

A slowing job market is not only bad news for U.S. workers, but could also force investors to re-think the Fed’s position on hiking interest rates in the coming months. Quotes from Yellen over the past have given prelude to a potential June rate hike and all eyes were on the jobs report today. Well, these numbers pretty much should have killed any ambition for June.

It will be interesting to see how the market responds next week once the reality of these numbers has sunk in. After the initial sell-off this morning, the major indexes were manipulated higher to control any downside damage. To my way of thinking, eventually there has to be a realization that while low interest rates are a positive by giving an assist to the markets, the fact that they are so low because of slowing or non-existent organic growth in the economy will be a negative in the long run.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 06/02/2016

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, June 2, 2016

TOC051916

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

 

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 +2.14% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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