Markets Bounce Back After Holiday Rest

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The sharp swings on Wall Street continued Tuesday, with stocks surging as traders returned from the 3-day holiday weekend and sent the Dow up 390 points. The gains came after last week’s volatile downturn that saw all the major indexes drop more than 3%, capped off by the Dow’s 272-point drop on Friday after a mixed jobs data report did little to clarify what the Federal Reserve will do on interest rates at its September meeting. The S&P 500 is now back to where we started this month.

China has been at the forefront of most market volatility of late. Well, today U.S. stocks rallied despite more disappointing economic data from China, because the news sparked hopes that the country’s central bank would take more action to stimulate the economy. The report today showed that China’s imports shrank far more than expected in August, falling for the 10th straight month. This may seem sour on the surface, but in reality it could lead to further policy easing from the Chinese government in coming months. The Chinese government has already intervened to keep their domestic stock markets afloat recently and this could be another time when we see them flex their fiscal muscle if import and export data continues to waver.

In uplifting news today, shares of the beloved U.S. powerhouse General Electric (GE) gained 4% today after the company won European and federal approvals for its $9.5 billion deal to buy French multinational Alstom’s power business. GE initially anticipated the value of the deal to be $13.5 billion; however, the closing purchase price is expected to be around $9.5 billion.

I am curious to see if today turns into another dead cat bounce or if a resumption of the bullish trend is in the making.

Today’s rebound pushed all of our 10 ETFs in the Spotlight higher by a solid margin. The leader of the day was Healthcare (XLV) with +2.80% while Consumer Staples (XLP) lagged a bit but added +2.09%.

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ETFs/Mutual Funds On The Cutline – Updated Through 09/04/2015

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 383 ETFs, of which currently 11 (last week 41) 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. 3 ETFs (last week 7) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 30 (last week 63) above the line and 783 below it out of the 813 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: Will Reallocation To US Equities From Europe And Asia Drive Valuations?

Ulli Market Review Contact

ManThe S&P 500 index is likely to hit 2250 by the end of the year though it may seem too bullish right now, said Julian Emanuel, US equity and derivatives strategist at UBS.

There has not been a bear market in the past 25 years without a recession and the economy is simply too strong now whether it is jobs, housing or confidence, he noted.

A bear market not necessarily means a 20 percent slump; the index may just stagnate and refuse to move up. Asked if that could be a possibility, Julian answered in affirmative.

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New ETFs On The Block: Global X SuperDividend Alternatives ETF (ALTY)

Ulli Dividend ETFs Contact

InvestingThe revised gross domestic product data that showed the US economy grew at a robust 3.7 percent in the second quarter certainly strengthens the case for a rate hike by the Federal Reserve when it meets next on July 16-17.

However, most market observers believe the interest rate path would be measured and gradual, and would be strictly based on the economy’s macro data. In other words, short-term interest rates would still be low and nowhere close to what is considered as “normal.”

Needless to say, investors looking for income probably have to wait a little longer before cash flows from income generating funds turn steady. Maybe not with the debut of the Global X SuperDividend Alternatives ETF (ALTY). The new fund is Global X’s sixth addition to its “super dividend” series that covers nearly everything from emerging markets to preferred stocks.

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ETF/No Load Fund Tracker Newsletter For September 4, 2015

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/2015/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09032015/

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Market Commentary

INDEXES CONTINUE SLIDING INTO HOLIDAY WEEKEND

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks tumbled on Wall Street as investors reacted to the August jobs report released today. This report is the last monthly employment picture we will receive before the Fed’s key mid-September meeting on interest rates. The report was lackluster, indicating that the U.S. produced less new jobs than expected, but on the flip-side was the lowest reading on the nation’s unemployment rate in more than seven years.

The downturn Friday capped off an ugly week for the markets in which the Dow plunged 3.3%, the S&P 500 fell 3.4% and the Nasdaq lost 2.7%. As bad as the week was, it didn’t come close to what happened just two weeks earlier when the Dow and S&P skidded 5.8% and the Nasdaq tumbled 6.8%.

Reports are saying that today’s reaction suggests investors are betting that the Fed could move to hike rates in two weeks, despite the fact the mixed report provides reason for both a hike and a delay.

Markets will take a breather on Monday to celebrate the Labor Day holiday. It will be interesting to see how the major indexes fare once traders get back in gear come Tuesday morning.

It was another one of those days with no survivors as all of our 10 ETFs in the Spotlight hit the skids and closed lower. It sure felt good to be on the sidelines. Leading the charge to the downside was the Global 100 ETF (IOO) with -2.02%. Holding up best was Consumer Discretionaries (XLY) with only a -1.07% loss.

We remain in bear market territory as section 3 below shows.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 09/03/2015

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, September 3, 2015

TOC 090315

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 8/24/2015

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a “Sell” for this arena effective 10/14/2014, which was followed by a violent break back above the line on 10/22/14 generating a new “Buy.” It was a classic whipsaw signal, and you can read more on my blog as to the events as they were unfolding.

As of today, our TTI (green line in above chart) is positioned below its long term trend line (red) by -2.22% after having generated a “Sell” signal as of 8/24/2015, which applies to all “broadly diversified domestic equity ETFs/Mutual Funds.”

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