Chinese Stocks Drop 8.5%—Domestic Equity Slide Continues For 5th Day

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Blame it one the Chinese. With the Shanghai index tanking some 8.5% in today, there was simply no other way to go but down. European stocks took the clue, and the German DAX dropped 2.6%. Following the leaders, the bears quickly took the upper hand in the U.S. markets and down we went, although in far more moderate fashion with the S&P surrendering 0.56% but still staying above the level we finished the month of June.

China’s situation is cause for concern since a lot of international companies rely on that huge market to sell their products. Any weakening demand will affect the future earnings picture here in the U.S. This morning’s report that industrial profits in China fell in June followed Friday’s data showing a private manufacturing index declining to a 15-month low; both are signs that growth appears to stall.

Again, there were no winners today, with the exception of the Select Dividend ETF (DVY), which actually gained 0.09% in the face of adversity. Still, it’s the loser of the year with some -4%. Leading the downside were the Financials (IYF) with -0.78%.

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ETFs/Mutual Funds On The Cutline – Updated Through 07/24/2015

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 150 (last week 212) 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. 24 ETFs (last week 38) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 318 (last week 379) above the line and 502 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: Will The Financial Sector Perform Well Once Rates Rise?

Ulli Market Review Contact

Man

The US economy has been growing at around 2-2.5 percent for a couple of years now while the business cycle has remained nearly flat, said Rob Morgan, chief investment officer at Sethi Financial Group.

While the economy grinds along, among asset classes, equities are likely to do well though P/E multiples are on the higher side, and some stocks are looking expensive. However, retail investors are yet to get back into the markets, which would bring some cash for the bullrun to continue for some more time, he observed.

Asked if the Fed can justify a rate hike when the US economy just “grinds along,” Rob answered affirmative. There could be more than one hike this year as the Fed really needs some ammo before the next recession, which is likely to be the basis for selling it to the public, he argued.

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New ETFs On The Block: Hull Tactical US ETF (HTUS)

Ulli Equity ETFs, Long/Short ETFs Contact

Financial DataBlair Hull, one of the veterans of quantitative trading on the Wall Street, recently entered the exchange-traded fund industry in association Exchange Traded Concepts – a white label ETF service provider.

Hull’s actively managed fund uses hedge fund like proprietary trading strategies with an aim to give superior returns to the broader investor community.

Blair Hull, along with his partners, started the highly successful Hull Trading Company in 1985 and 14 years later sold the firm to Goldman Sachs for $531 million. Needless to say, Hull was one of the brightest minds in quant and his company among the most successful derivatives trading firms of his time. Incidentally, Hull had dabbled in politics and unsuccessfully contested the Democratic primary against Barack Obama in the Democratic Primary for the US State Senate in 2004.

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ETF/No Load Fund Tracker Newsletter For July 24, 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/2015/07/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-07232015/

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Market Commentary

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The above 5-day chart tells the story for the week. The bears were clearly in charge with the S&P 500 surrendering over 2% during the last 5 trading sessions. Still, the index remains above where if started the month.

Biotechs were the big loser after having been a dream holding for the bulls for the past couple of years, so a correction was overdue. Even Amazon and its 9.8% surge could not save the day as the mood soured when new-home sales unexpectedly dropped against expectations of a gain.

Commodity prices continued with their collapse as weak data from China combined with poor earnings reports by heavyweights such as Caterpillar left their mark on the indexes. A Chinese manufacturing gauge fell to a 15 month low, raising questions as to whether the recent signs of stabilization were simply a mirage.

There were no winners today, with the exception of Consumer Discretionaries (XLY), which managed to stay even, despite the sell-off. 9 of our 10 ETFs in the Spotlight slipped with the worst performer of the day being our winner for the year, namely Healthcare (XLV), which gave back 2.49%.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 07/23/2015

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, July 23, 2015

TOC021915

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 10/22/2014

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 above its long term trend line (red) by +1.37% keeping us in the market with our established positions.

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