Ulli... The ETF Bully

Indexes Stumble And Head South

Ulli Monday, 1 December 2014, 4:28 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Finally, the relentless upward march into record territory came to an end, at least for the time being, as equities headed south with the S&P 500 giving back a modest 0.7%, which was its largest one-day loss in more than a month.

Contributing to the sour sentiment was not only Apple’s mini flash-crash but also slowing US manufacturing growth, which continued its downward path for the third straight month. Joining the party were the Eurozone and Asia, where growth eased as well despite heavy price cuts to stimulate demand.

Not helping matters were preliminary Holiday shopping reports indicating that in-store sales were some 6.4% less than last year due to increased online shopping activity.

All of our 10 ETFs in the Spotlight closed lower today as the indexes see-sawed and rebound attempts failed to break out above the unchanged line.

ETFs/Mutual Funds On The Cutline – Updated Through 11/28/2014

Ulli Monday, 1 December 2014, 5:40 AM 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 278 (last week 291) 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. 44 ETFs (last week 50) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 710 (last week 719) above the line and 136 below it out of the 846 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: Should Investors Prepare For A Higher-Rate Environment Next Year?

Ulli Sunday, 30 November 2014, 6:00 AM Market Review Contact

Black-Friday might be an interesting event to measure consumer confidence in the US and increasingly in Europe, but it’s the central banks that investors really need to watch, said Niall Quinn, managing director at Eaton Vance Management.

The strong consumer confidence in the US shows the US economy is improving, despite the Federal Reserve moving toward normalization of interest rates. Higher sales of durable goods in the US during the holidays show consumers are witnessing a genuine recovery, and the US economy is set for strong growth next year, he noted.

Asked if lower gas prices are good for the US economy, because consumers get to spend more on other items, Quinn answered in affirmative. However, with inflation weakening across Europe and in Japan, lower energy prices may not be a relief for the European Central Bank or the Bank of Japan. So, while it’s good for US consumers and good for the global economy overall, it’s a mixed picture out there, he explained.

New ETFs On The Block: Vident Core US Bond Strategy ETF (VBND)

Ulli Saturday, 29 November 2014, 5:58 AM Bond ETFs Contact

Vident Financial, the Atlanta, Georgia-based issuer behind the two fairly successful equity products, recently launched its first bond focused exchange-traded fund. The Vident Core US Bond Strategy ETF (VBND) aims to protect investors’ capital through a transparent and systematic investment methodology.

The passively-managed VBND tracks the performance of the Vident Core US Strategy Index, a rules-based fixed-income index that seeks to provide current income while minimizing risks associated with this asset class including, inflation, counter-party default, star-manager and credit-migration risk.

The portfolio consists of US Treasuries, Treasury Inflation Protected Securities (TIPS), agency securities, investment-grade corporate bonds, mortgage-backed securities and high-yield corporate bonds.

11-28-2014

Ulli Friday, 28 November 2014, 3:39 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For November 28, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/11/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-11262014/?preview=true

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Market Commentary

Friday, November 28, 2014

STOCKS EDGE OUT SIXTH STRAIGHT WEEK OF GAINS

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks finished higher on the week, marking a sixth straight week of gains. Wall Street has been keeping a close watch on retail stocks as we head into the holiday season, while trying to deal with falling oil prices. For the week, the major indexes gained slightly.

Oil prices continue moving downward. A barrel of Texas Intermediate crude was trading for $67.17 Friday. Today, the Organization of the Petroleum Exporting Countries (OPEC) announced it decided to leave its production quota (supply of oil) unchanged. Oil is off more than 30% since this summer as slowing global growth has reduced demand and as domestic production has increased significantly in the past several years.

On the other hand, the drop in oil prices may actual signal The True State Of The Economy, as this article so eloquently explains.

Next week, investors will be anxiously awaiting an updated jobs report. According to Bloomberg, expectations are for 228,000 jobs to have been added in November. That would make the 10th consecutive month of more than 200,000 jobs created, which would be the longest streak since 1995. Also, we’ll be keeping an eye on major retailer stocks like Wal-mart (WMT) and Macy’s (M).

6 of our 10 ETFs in the Spotlight inched higher today; 5 of them made new highs as the YTD table below shows.

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:

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.

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

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) continued their run deeper into bullish territory and closed the week as follows:

Domestic TTI: +3.70% (last Friday +3.47%)—Buy signal since 10/22/2014

International TTI: +1.54% (last Friday +1.24%)—New Buy signal effective 11/24/14

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

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

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

Reader Ira:

Q: Ulli: I know we got whipsawed a bit earlier last month. I pulled out and stayed out up to now. I was wondering… when you go back in after that kind of buy-sell-buy switch, how do you transition back into the market? I personally still see lots of danger signals, but as you noted multiple times- with the different govt’s interfering in the markets, all bets are off.

So, I was wondering how you went back in and what % invested you might be now. Also- are there any sectors that might be holds even in a sell signal (like Health…)?

Thanks and best regards.

A: Ira: I posted about my process of getting back into the market after the Domestic TTI signaled a ‘Sell.’ As the TTI rebounded and crossed back above its long-term trend line, I waited a few days to make sure the crossing was holding up. It appeared that way as, after a few days of meandering, the TTI broke the +1% level, which created a new Buy signal effective 10/22/14. I reinvested about 50-60% of available assets (100% for small accounts under $15k). About a week later, the momentum was still up, so I invested the balance giving us a 100% market exposure.

When markets turn bearish, usually all sectors will be affected. As much as I like Healthcare (XLV), I ended up selling it, capturing some profits, and later buying it again. I don’t believe there is any fund/ETF that you should hold during a ‘Sell,’ however, once we drop into bear territory, we may discover upward momentum in certain areas, which I plan on taking advantage of. But it’s too early to tell ahead of time; we have to get there first before we can make that determination.

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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/