ETF/Mutual Fund Data updated through Thursday, April 28, 2016
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
Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in above chart) has recently crawled above its long term trend line (red) by +1.42% generating a new Domestic Buy signal effective 4/4/2016 as posted on the blog.
1. Moving the Markets
The major indexes had not much too cheer about during the regular session, which started on a bad omen from Japan with the BoJ surprising world markets by capping their monetary stimulus, which was expected to continue with full force. As we all know by now, without central bank stimulus, equity markets will not be able to cling to these lofty levels for any length of time.
The Nikkei dropped some 1,500 points right out of the gate but managed to recover half of that during the session. Then China stepped on the breaks attempting to control its latest bubble, namely the insane volume contributed to wild commodity speculation.
And last not least, mega investor Carl Icahn disclosed, after having advocated a price target for Apple (AAPL) of some $240 over the past few years, that he had changed his mind and had liquidated all holdings. That did not sit well with Wall Street and Apple gave back another 3% leaving it wide open as to which major institutional investors, like hedge funds, will be the next ones to pull the trigger.
Saving the afternoon session were Amazon, LinkedIn and Pandora, all of which beat earnings estimates.
1. Moving the Markets
As was to be expected, the Fed held interest rates steady for the third consecutive meeting. The FOMC statement was neutral and contained the usual language of “assessing economic and labor conditions, inflationary pressures and expectations along with readings on financial and international developments before determining the size of future interest rate adjustments,” which leaves things wide open to their discretion.
The market’s reaction was slightly bullish but lacking the exuberance of the past, which could indicate that the bull market is getting tired. Although this afternoon, the beaten down Nasdaq received some good news for a change when Facebook (FB) crushed earnings estimates and saw its shares skyrocket by some 9% as of this writing.
Whether this was simply an outlier when it comes to tech world earnings remains to be seen, but I am curious if these numbers are enough to prop up the major indexes, at least for the short term.
1. Moving the Markets
It was a fairly quiet day during the regular session despite a host of economic data points that can be summed up with one word: dismal. But none of that matters in a centrally planned economy where fundamentals are immaterial and where Wall Street hangs on to every new utterance by the the masters of the financial universe, namely the Fed.
This was the case today with poor economic data being brushed aside as all eyes are now on the Fed when they release the latest monetary policy statement due out tomorrow around 11:15 PST. A rate hike is not expected but the search for hints as to the timing of the next one will be on everyone’s mind.
This afternoon Twitter got crushed and lost over 14% while Apple disappointed and dropped some 8% as of this writing. At the same time, the FANGs (Facebook, Amazon, Netflix, Google) had their worst 3-day run in almost 3 months. None of this will bode well for the Nasdaq’s opening tomorrow morning. But, I am hopeful that the Fed as usual will come to the rescue…
1. Moving the Markets
U.S. stocks retreated today as investors brace for a barrage of earnings reports, a slew of fresh economic data and the Federal Reserve’s decision Wednesday on interest rates.
The earnings season, according to MSM, has fared well thus far, if you can call beating a bar that has been set extremely low a news-worthy event. Nevertheless, 77% of the 132 companies that have reported earnings have topped these basement expectations. There is no major signal in this earnings season though and investors are still waiting for a confirmation that earnings will increase in the future. Well, I won’t hold my breath for that announcement.
The Fed breaks from its two-day policy meeting Wednesday at 2 p.m. ET and investors around the globe will be watching to see what the U.S. central bank says about the timing of its next interest rate hike. My guess: It won’t happen….
Costco was back in the headlines today, after buzz that annual memberships may increase from $5-10 per member in 2017. The trend has been for the company to raise membership fees every 5-6 years and the last time that fees were raised was back in 2011. Fees for a Basic Membership are $55 and $110 for Executive Memberships.
In oil news, the prince of Saudi Arabia has laid out a sweeping plan to transform the kingdom from its heavy reliance on oil to a more diverse economy. Among other proposals to boost non-oil revenue, the leader said today that they should invest more in mineral mining and expand the kingdom’s military production. The future impact on oil prices is still TBD.
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 330 (last week 283) 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. 83 ETFs (last week 67) have managed to remain in bullish territory after the recent market volatility.
The third report covers Mutual Funds on the Cutline. There are currently 433 (last week 350) above the line and 347 below it out of the 780 that I follow.
Take a look:
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.