A Slow Climb; But No Gains

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks recovered from early losses but closed slightly lower as Treasury yields and oil prices jumped. Investors remained uneasy as negotiations on Greece’s bailout plan continued.

It seems that investors are still keeping a fixed eye on developments in debt-plagued Greece, which faces a Friday deadline for paying the IMF 300 million euros. The payment is the first installment on a loan of 1.6 billion euros—about $1.8 billion USD.

In the zooming world of automobiles, we heard today that automakers reported a strong sales pace for the month of May. The gains were apparently helped by improved consumer confidence, lower unemployment and moderate gas prices that propelled sales of pickups and SUVs. The numbers indicate that, on an adjusted basis, the auto industry is on pace to sell almost 17.8 million new vehicles this year.

And in the world of energy, energy stocks rose as the price of oil continues to climb. The U.S. benchmark crude price was up 1.9% to $61.35 a barrel on the New York Mercantile Exchange.

Again, we had a non-directional session with 6 of our 10 ETFs in the Spotlight slipping and 4 of them managing to eke out a gain. Consumer Discretionaries (XLY) added +0.22%, while Healthcare (XLV) gave back the most by surrendering -0.65%.

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Stocks Hit The Ground Running To Kick Off June

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks rose slightly as some improving economic data and a big tech deal helped Wall Street kick off the month of June on a positive note. Some M&A news gave markets a boost just before the opening bell when it was announced that Intel (INTC) said it will buy fellow chip maker Altera (ALTR) for $54 a share in an all-cash transaction valued at approximately $16.7 billion. The deal allows Intel to sell cheaper semi-custom made chips.

As for the economy, a batch of economic reports Monday showed that consumers were still pinching pennies even as the economy continued to emerge from a brutal winter. The data we saw today showed construction spending rising sharply and manufacturing activity expanding at a faster pace after a string of slowdowns. The hope was that the upturn would spill into more consumer-spending, but instead Americans are using their extra cash to pay down debt and fatten their bank accounts.

In commodities, crude oils rose to $62.15 a barrel in May, the first time the basket’s monthly price has topped $60 a barrel since last November. OPEC crude hit a low at less than $49 a barrel on March 17, and its most recent daily high was posted on May 6 at $64.96 a barrel.

It was a mixed bag today, as 8 of our 10 ETFs in the Spotlight headed higher, while 2 of them slipped and one ended unchanged. Healthcare (XLV) managed to take the lead on the upside with +0.40%; the Global 100 (IOO) slipped -0.32%.

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ETFs/Mutual Funds On The Cutline – Updated Through 05/29/2015

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 410 ETFs, of which currently 286 (last week 303) 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.

These ETFs are generated from my selected list of some 97 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. 49 ETFs (last week 55) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 539 (last week 592) above the line and 281 below it out of the 820 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 Balance-Sheet Repair Delaying Consumer Spending Pick-Up?

Ulli Market Review Contact

The revised Q1 GDP reading is not indicative of the underlying growth trend in the US economy, said Alan Krueger, professor of Economics and Public Affairs at Princeton University. Investors would be wise to look past the first-quarter numbers as there were some special factors such as very bad weather in the North East, labor disputes on the West Coast and a stronger dollar that impacted exports.

But fundamentally, the US economy is continuing to expand; the job market has witnessed a strong growth – April’s job numbers were solid and unemployment claims were at a 15 year low, indicating the economy is on a path to recovery in the US, he noted.

Despite a strong job growth and a plunge in oil prices, consumer spending in the US is yet to pick up pace. Asked to explain, Krueger said despite adding more than 200,000 jobs in 12 of the past 13 months that pushed up the Employment Cost Index 2.8 percent in the past 12 months, spending – particularly on discretionary items, has been weak. But spending on durable goods has been quite healthy, particularly over the whole recovery.

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New ETFs On The Block: Powershares S&P 500 Ex-Rate Sensitive Low Volatility Portfolio (XRLV)

Ulli Equity ETFs, Low Volatility ETFs Contact

94177589The broad equity markets in the US saw heightened volatility this year amid continuing tensions around Greece, highly unpredictable oil prices and weak GDP data on the domestic front. Moreover, a fluctuating greenback and an unexpected slowdown in China – the world’s second largest economy, didn’t help investor sentiment either.

After the poor showing in the first quarter, economic readings failed to lift moods in the second quarter as well. Investors who thought the seasonal impact of Q1 was temporary may have to wait a little longer for sunnier days.

Recent data showed retail sales remained weak in April after witnessing the first quarterly decline in almost three years in Q1 this year. The sputtering wage growth and the sudden spike in energy prices expectedly sapped consumer confidence with the preliminary reading of the Michigan University/Reuters consumer sentiment index plunging to a seven-month low in May.

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05-29-2015

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For May 29, 2015

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2015/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05282015/

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Market Commentary

STOCKS LOWER FRIDAY, BUT NOT TO OVERSHADOW PROFITABLE MONTH OF MAY

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks fell Friday; the major indexes posted weekly losses as weaker economic data weighed on markets. But equities still notched gains for the month, with the Nasdaq getting a 2.6% boost while the Dow and S&P 500 climbed 1% each. On the week, nine of the ten S&P sectors were lower with industrials and financials posting the largest losses. Only energy stocks were higher as oil prices jumped as U.S. supplies declined more than expected. U.S. benchmark crude rose about 3% to $59.65 a barrel.

To recap major M&A news this week, Charter Communications (CHTR) has agreed to buy Time Warner Cable (TWC) for $55 billion in cash and stock, valuing the company at $78.7 billion, including debt. The deal would combine the second- and third-largest US cable companies to better compete against the market leader Comcast, and has raised the scrutiny of the Federal Communications Commission. We also heard that Singapore’s Avago Technologies (AVGO) will buy California-based Broadcom (BRCM), creating the world’s sixth largest chipmaker by revenue in the industry’s largest acquisition.

It will be interesting to see, as we head into June, if the indexes can continue upward on a monthly basis. Next week, we will hear some economic data that could move markets, notable the ISM manufacturing PMI for the U.S. and the European Union reports preliminary Q1 GDP growth on Friday, June 5th.

All of our 10 ETFs in the Spotlight retreated today with Healthcare (XLV) holding up best with a small loss of 0.25%, while the Financials (IYF) fared the worst by surrendering 0.88%.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

Here are the 10 candidates:

MaxDD

The above table simply demonstrates the magnitude with which some of the ETFs are fluctuating in regards to their positions above or below their respective individual trend lines (%M/A). A break below, represented by a negative number, shows weakness, while a break above, represented by a positive percentage, shows strength.

For hundreds of ETF/Mutual fund choices, be sure to reference Thursday’s StatSheet.

Year to date, here’s how the above candidates have fared so far:

YTD

Again, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point has been taken out in the “Off High” column.

3. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) pulled back but remain firmly in bullish territory:

Domestic TTI: +2.27% (last Friday +2.77%)—Buy signal effective 10/22/2014

International TTI: +4.07% (last Friday +5.25%)—Buy signal effective 2/13/2015

Have a nice weekend.

Ulli…

Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.

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READER Q & A FOR THE WEEK

Reader Ed:

Q: Ulli: I’m just wondering how you place your trailing stop orders.  I had a weird thing happen to me yesterday.  I had a 7% trailing stop loss on IPGP on the bid.  It has been trading around $95.00. The trigger price for the stop was $ 90.09, but I was stopped out @ $95.17.

I called Fidelity; they researched it & told me there were a couple of bids in before the opening at approx. my stop price of $90.09. This triggered the stop and Fidelity routed it to the best price… which was $95.17. They said it was unusual but it sometimes happens…   The problem is I still want to be in the stock.

My question:  Should I place my trailing stop losses on the last price instead of the bid? All of my ETFs have trailing stop losses on the bid which I thought was the correct way to do it. I have changed some of my stock stop losses to last price since this happened.  I’d appreciate any advice.

A: Ed: It’s nice to hear from you. 7% stops on stocks don’t work well due to the volatility. I only use the 7% rule on ETFs/Mutual funds. Personally, I don’t put in the stop ahead of time (I track it on my spreadsheet), because I only use day ending prices to avoid what happened to you, namely market manipulation and/or front running by the HFTs. If my stop has been triggered based on the day-ending price, only then will I enter the “sell” the next day as a limit order.

When using day ending prices for stops, you may get stopped out at worse price, but I am not interested in intra-day fluctuations but only how the markets end up once trading is over. That way I can better determine if the long-term trend, the basis for Trend Tracking, remains intact or not.

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

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Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

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Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/