Equities End Mixed As Crude Oil Slides

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The major U.S. stock indexes kicked off the trading week in a mixed fashion. U.S. stocks, still reeling from its worst yearly start ever, were able to close mostly higher in a bumpy trading session as traders shook off fears after China’s 2015 economic growth hit its lowest level in 25 years, but was not as bad as feared. GDP growth for 2015 in China came in at 6.9%, which is the lowest growth rate since 1990.

Keeping gains in check was another sharp drop in the price of U.S.-produced crude, which was off $1.03, or 3.5%, to close at $28.37 a barrel.

Some earnings reports from big players came in today. Better than expected earnings from Bank of America (BAC) and Morgan Stanley (MS) lifted investor spirits for the moment. So did Netflix (NFLX). The online streaming giant posted 4th quarter earnings that surpassed expectations, mostly due to new international subscribers.

The market is in dire need of a positive earnings season to get some upward momentum restored. On the other hand, the S&P 500 dipped again below its crucial support level of 1,867 today, although it did so only on an intra-day basis. Any close below that point, might invite more selling bringing in the 1,800 level in a hurry. If you are still bullish, you better hope for some blowout earnings to stem the bearish tide.

6 of our 10 ETFs in the Spotlight edged higher during this mixed session with most indexes going sideways. Heading the leaders was Consumer Staples (XLP) with +1.20% while on the downside the Mid-Cap Value ETF (IWS) gave back -0.67%.

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ETFs/Mutual Funds On The Cutline – Updated Through 01/15/2016

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 16 (last week 18) 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. 6 ETFs (last week 6) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 14 (last week 13) above the line and 767 below it out of the 781 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.

One Man’s Opinion: Is The Real US Economy More Resilient Than We Realize?

Ulli Market Review Contact

Man

The 10-year US yield is expected to generally move higher throughout the course of this year as yields are down at pretty close to the absolute low-end of the range, said Scott Mather, chief investment officer of US core strategies at PIMCO.

Domestic inflation expectations are likely to start rising as it has hit the low point in terms of energy prices. The impact of low oil prices on the US economy is going to diminish over time. PIMCO also expects to see wage pressures to rise. So putting all those things together, PIMCO expects to see the Fed to move and yields to rise generally this year.

Investors can expect to see many episodes of volatility in the marketplace; PIMCO’s key-message is that investors need to be very careful about mapping the equity market volatility with the real economy. The real economy is probably a lot more resilient than many realize, he noted.

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New ETFs On The Block: First Trust Heitman Global Prime Real Estate ETF (PRME)

Ulli REITs Contact

91551519First Trust Advisors, the Illinois based sixth-largest US issuer of exchange-traded funds, expanded its lineup of actively-managed funds recently by offering a different spin on the traditional real estate ETF.

The First Trust Heitman Global Prime Real Estate ETF (PRME) aims to provide targeted exposure to investors in American and international prime real estate securities by investing in the equities of publicly-traded companies that own top tier, prime properties in the world’s leading cities.

The actively managed fund seeks out only the finest properties in high-value markets and seeks to achieve its investment objective by investing at least 80 percent of its net assets (including borrowings) in securities issued by real estate investment trusts (REITs), real estate operating companies (REOCs) and common stocks or depositary receipts of companies primarily engaged in the real estate industry.

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

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2016/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01142016/

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Market Commentary

IF IT WALKS LIKE A BEAR AND GROWLS LIKE A BEAR…

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

You could call it a Black Friday as Wall Street was saturated in red and bleeding profusely with the S&P 500 dropping to its lowest since October and temporarily piercing that low but closing above it. If that level gets taken out, much lower prices are in the cards with some technicians seeing the next support level at about 1,750. For the first two trading weeks of the year, the S&P 500 has now surrendered almost 8%.

It turned out that my guess about yesterday having been a dead cat bounce was spot on with oil taking a “crude” toll on equities as the black gold sank below the $30/barrel for first time in over a decade. Adding to the misery were continued fears about economic woes in China.

It looks to be a very long weekend for those who remain invested in equities. Of course, there is certainly a chance that some of the Fed governors could come out and try to jawbone the markets back up but, short of Fed Chair Yellen renouncing the recent interest hike and promising lower rather than higher rates, I don’t see a resumption of the old bull market at this time except temporarily in form of dead cat bounce.

All of our 10 ETFs in the Spotlight got spanked again as the bear market deepened. Showing the worst loss today was the Global 100 (IOO) with -2.99%. There were no winners, but the Select Dividend ETF (DVY) and Healthcare (XLV) managed more modest losses with each giving back -1.40% for the day.

We remain on the sidelines and watching this bear market debacle unfold. You can see the exact numbers in section 3 below.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 01/14/2016

Ulli ETF StatSheet Contact

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

TOC010716

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

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: SELL — since 11/13/2015

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 remains below its trend line by -3.01%, which means we are in cash on the sidelines.

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