New ETFs On The Block: First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC)

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InvestingUsing the fund-of-funds investment strategy has proven quite successful for many US fund managers. First Trust Advisors, the Illinois-based seventh-largest issuer of exchange-traded funds, recently launched a dynamic version of its most popular sector-rotation ETF that can incorporate cash allocation during periods of heightened market volatility.

The First Trust Dorsey Wright Dynamic Focus 5 ETF (FVC) employs the same methodology as its highly successful $3.41 billion cousin – the First Trust Dorsey Wright Focus 5 ETF (FV), with the addition of a short-term cash-equivalent index. Since the launch of FV in 2014, First Trust has progressively expanded its offerings with momentum specialists Dorsey, Wright & Associates (DWA).

FVC tracks the performance of the Dorsey Wright Dynamic Focus Five Index – an innovative gauge developed and owned by DWA, the investment advisory firm that specializes in relative strength analysis and uses proprietary methodology to achieve investment outcomes.

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ETF/No Load Fund Tracker Newsletter For April 15, 2016

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ETF/No Load Fund Tracker StatSheet

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https://theetfbully.com/2016/04/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-04142016/

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Market Commentary

MARKETS POST GAINS FOR SECOND WEEK OF APRIL

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Although markets closed slightly lower on Friday, they remained in positive territory for the week. The 3-day rally from Tuesday to Thursday helped stocks continue on a bullish path.

We heard news from China today that the country’s first-quarter growth came in at 6.7%, which was pretty much in line with expectations. However, this is the country’s slowest pace of growth over the last seven years. Markets in China seemed to remain steady though after the news. The Shanghai composite fell just 0.13%.

While China’s numbers did not impress, most investors here are focusing more on the fact that the Dow is once again approaching the 18,000 mark. The index sits at 17,897 today. The last time the Dow touched the 18,000 mark was July of last year.  Breaking the mark once again could help catapult stocks forward despite absolutely horrific underlying economic data points ranging from a surge in inventory-to-sales, plunging industrial production and tumbling retail sales.

If that has you scratching your head, remember the current level and upward trajectory of the equity markets have absolutely nothing to do with economic reality; they are merely a function of the Fed’s dovish stance on interest rates.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 04/14/2016

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ETF/Mutual Fund Data updated through Thursday, April 14, 2016

TOC040716

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) has recently crawled above its long term trend line (red) and finally generated a new “Buy” signal effective 11/3/15. The market subsequently dropped, and we exited again on 11/13/15. As of today, the TTI has just moved above its trend line by +1.74%. As of Monday, April 4, 2016 a new Domestic Buy signal became effective as posted on the blog.

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Running Out Of Steam

Ulli Market Commentary, Uncategorized Contact

Thur pic

[Chart courtesy of MarketWatch.com]

Stocks ended flat Thursday, taking a breather after a nice two day rally.

Trading today was mostly influenced by earnings reports from Bank of America (BAC) and Wells Fargo (WFC). Bank of America topped both earnings and revenue estimates. Wells Fargo topped profit expectations but was slightly below par on revenue. BofA gained and Wells fell slightly.

The results from these two banking giants were a bit of a disappointment after JPMorgan (JPM) posted such strong gains yesterday. But, there has to be a winner sometimes.

We also digested another strong reading on the jobs market here in the U.S. The latest number on weekly jobless claims fell from 266,000 to 253,000 the week before. In addition, the consumer price index (CPI) rose in March. Crude oil stayed above $41 a barrel today, which may give some confidence to the bulls.

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Markets Climb Back To 2016 Highs

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

Markets soared higher today on strong earnings from JPMorgan that resulted in bullish sentiment on upcoming report cards for the financial sector. That’s the official MSM version.

Mine is that if you set the earnings bar low enough, the numbers can be beat, which happened today and resulted in a lift of share prices for the banking sector despite it being the worst start to a new year since the 2007-2008 crisis, as financial stocks dropped 5.6% for the quarter. Again, the very low bottom line was beat and nothing else mattered as shares of JP Morgan and American Express kept the rally alive. Let’s see if this theme continues when Bof A and Wells Fargo report on Thursday.

While retail sales data were absolutely horrific, it did not matter as the Fed opined that the domestic economy continues to plow ahead in a positive direction with solid advances in the labor market and housing offsetting a mixed performance in the manufacturing sector.

Consumer spending, which makes up 70% of economic activity, appeared to slow. But there were two possible bright spots: Slow wage growth appears to be picking up and business spending is generally expanding.

With earnings season getting underway, I am curious to see if the headline scanning computer algos will use any “beat” of the extremely low expectations to generate another rally. If so, we should be able to take out the all-time highs by the end of April; of course, I am being facetious here, but in this manipulated market environment you can never be sure.

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Oil And Equities: Back To 100% Correlation

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

 Stocks posted strong gains today, rising nearly 1% across the board.

Oil, as it has been (and seems like will be for the near future) was “the” big market mover. The black gold gained 3.96% to move above $41 a barrel, which makes economic bulls even more bullish.

In the world of ETFs, energy based funds are posting substantial gains on renewed hopes of cuts in oil production. There is an alleged meeting this week between major oil powers, the same type of story concerning reduced production we’ve heard about over and over again in the recent past. My guess is that this one will end like all the other ones: In disappointment.

Coming up in earnings this week, a dozen companies in the S&P 500 will report, including big banks such as JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C). Expectations remain low, however, as profits are expected to contract more than 7% for S&P 500 companies.

Let’s see how the markets will respond to moving oil prices and the upcoming earnings reports this week.

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