The Equity Slide Continues

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The markets still could not find much footing and continued to slip for the second day, although it could have been a lot worse. In the humor department (it’s April Fool’s day after all), the sucker of the day award has to go to the High Frequency Trading algos, who swallowed the Tesla announcement of a new W-Model, hook, line and sinker. Pretty funny, if it was not so sad, as this story elaborates.

Not helping matters were disappointing employment and manufacturing numbers suggesting the economy is weakening rather than growing. Even though we started this month on a sour note, April is historically a good month for the major indexes as I posted a few days ago. Will have to wait and see if the odds will continue to be on the investor’s side.

9 of our 10 ETFs in the Spotlight closed in the red with only consumer staples (XLP) bucking the trend with a +0.12% gain. Despite today’s sell-off, 8 ETFs remain on the plus side YTD as section 2 below shows.

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A Rough Landing To End Q1, But A New Month Is Coming

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

As I mentioned two days ago, March has never been a predictable month historically. Volatility remained in full force again today as stocks tumbled amidst a major sell-off that saw the Dow drop 200 points. The good news is, that the S&P 500 and Nasdaq were able to manage their negative hits today to come out on top over all for the month. What may bring some sunshine to the table though is that this is the Nasdaq’s 9th straight quarterly gain and its longest quarterly winning streak in history, which has many investors remaining bullish on the tech index.

The price of the USD has continued to weigh on investors’ minds as the currency has officially gained 9% for the year and is expected to continue rising in the near future. Speculation as to the tentative (never predictable) hike in interest rates has also been contributing to volatility of late. It shall be interesting to see what the month of April will entail from the Fed.

Shall optimistic bulls charge forward in April? Well, the first trading day of the second quarter (April 1) is just around the corner and has shown strong performance over the past 20 years. Historically, the S&P 500 has advanced 16 times with an average gain of 0.56 percent (according to the Stock Trader’s Almanac).

Let’s see if 2015 brings a historical repeat.

In an abrupt reversal from yesterday, our 10 ETFs in the Spotlight slipped and closed lower. Leading the downside was our YTD winner healthcare (XLV) with -1.73%, while Consumer Discretionaries (XLY) held up best with a loss of only -0.44%.

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Stocks In Rally Mode

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

For the second day in a row, the major indexes closed higher, but today the gains were solid as, after a strong opening, stocks never looked back and managed to add to their early gains.

Helping matters were reports from China over the weekend that the PBOC saw “more room” for accommodating monetary policy should the economy stay soft and inflation remain weak. Considering that slowing growth in China had been a major concern that was quite some encouragement and equities took the hint and ran with it.

There was continued softness in consumer spending confirming a slowing economy but pending home sales reached their highest level since the middle of 2013. In the end, good and bad equaled a nice rally.

With today’s sharp move higher, it comes as now surprise that all of our 10 ETFs in the Spotlight closed up led by the Mid-Caps (IWS) with +1.33%; that was closely followed by the low volatility S&P (SPLV), which gained +1.30%.

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ETFs/Mutual Funds On The Cutline – Updated Through 03/27/2015

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 266 (last week 292) 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. 42 ETFs (last week 48) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 405 (last week 520) above the line and 415 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 US Fed Introduce Some Amount Of Uncertainty Into The Markets?

Ulli Market Review Contact

92835431The US Fed in its statement last week said it hasn’t decided on an interest rate-hike yet, but Rick Reider, CIO of fixed income at BlackRock thinks the timing doesn’t matter. The market is incessantly focused if lift-off is going to be June or September.

However, there are two other factors that would determine the timing; one: the pace at which the Fed starts to move and two; the destination they are going to. They are likely to be deliberate and the destination (target rate) would be lower than what it has been historically. With the European Central Bank going ahead with Quantitative Easing, rates are expected to remain stable, and the Fed should move when they are ready to go, he noted.

The nonfarm payrolls report is due next Friday. NFP has been pretty much the only positive data-point for the economy amidst a steady stream of soft data that has pushed down 10-year yields below 2 percent. Asked why the payrolls data would still be the determinant, Rick said investors should consider the first-quarter economic data from a wider perspective.

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New ETFs On The Block: Guggenheim S&P High Income Infrastructure ETF (GHII)

Ulli Infastructure ETFs Contact

91551549Infrastructure spending is likely to remain a prominent theme for governments across the world to boost economic growth. In the US alone, the government plans to spend $478 billion building roads, transport nodes, ports, bridges and such other vital installations, according to the Wall Street Journal.

A separate report by PwC and Oxford Economics forecast global infrastructure spending to top $78 trillion between 2014 and 2025 with 60 percent of the amount coming from the Asia Pacific region alone.

Investors looking for income from the defensive sector have the option to choose from a wide array of exchange-traded funds that are already on offer. However, the newly launched Guggenheim S&P High Income Infrastructure ETF (GHII) is unique since it takes a novel approach to infrastructure investing with a global coverage.

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