Ulli... The ETF Bully

March Greets Investors With A Spring Sprint

Ulli Monday, 2 March 2015, 4:15 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets were in a tizzy today because the Nasdaq closed above 5,000 for the first time since 2000. In addition, the dollar has been raging upwards in valuation over the past couple of months and closed today at an 11 year high on expectations that the Fed may raise interest rates later this year. However, the exact date remains a mystery, as it has been for the past year.

The international bulls continue to charge forward it seems, pushing on from a record breaking February. Today, stock prices were propelled higher due to news from China that there was a surprise cut in interest rates from the country’s central banks, which was unexpected. According to Reuters, the rate cut shaved a quarter point off benchmark lending and deposit rates, less than four months after the last reduction. The cut was sooner than many economists and analysts expected.

In the world of retail, Costco (COST) officially named Citigroup (C) and Visa (V) as the new partners of its credit card program after the deal with American Express (AMEX) expires next year. The agreement will take effect as of April 1, 2016. Citi will be the exclusive issuer of credit cards and Visa will provide all inclusive network support. Financial terms of the agreements were not disclosed. However, Costco said it would provide additional information to its members in the coming months.

9 of our 10 ETFs in the Spotlight joined the surge late in the day and closed higher with Consumer Discretionaries (XLY) leading the way. 4 of them made new highs for the year.

ETFs/Mutual Funds On The Cutline – Updated Through 02/27/2015

Ulli Monday, 2 March 2015, 5:55 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 291 (last week 287) 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. 51 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 459 (last week 459) above the line and 361 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: Have Lending Costs To Corporate Europe In The Periphery Declined?

Ulli Sunday, 1 March 2015, 6:08 AM Market Review Contact

Despite weak credit conditions, lower oil and a slumping euro, Goldman Sachs is optimistic about the region’s growth prospect this year, said Kevin Daly, Senior European economist at Goldman Sachs.

The investment bank revised euro area’s GDP growth-forecast higher – between 1.2% and 1.5% for this year and between 1.6% and 1.7% for next year. For the first-time, GS is above consensus on euro-area growth forecasts since the crisis broke out in 2008.

There are four reasons why GS is positive about the region; first, oil prices have fallen 35 percent in euro terms, which is good enough to boost growth around 1% – 1.5% over a period of two years. Second, the euro has fallen by more than 10 percent over the past 12 months and that’s enough to add an additional 1 percent to the level of euro-area GDP.

Thirdly, credit conditions have been improving, particularly in the peripheral countries and lastly, the pace of fiscal consolidation has started to slow. These four developments make Europe look more attractive than before he noted.

New ETFs On The Block: Hedged Dividend Income ETF (DIVA)

Ulli Saturday, 28 February 2015, 6:06 AM Dividend ETFs, Long/Short ETFs Contact

FFCM LLC, the Boston, MA-based investment advisor to QuantShares, recently rolled out its fifth exchange-traded fund that takes a unique long-short strategy in dividend investing. The newly launched QuantShares Hedged Dividend Income Fund (DIVA) takes refined approach that is likely to attract investors looking for dividend income.

The passively-managed DIVA tracks the INDXX Hedged Dividend Income Index, which was created in February 2013. The index aims to maximize capital appreciation and offer high current-yield while maintaining risk-profile similar to a corporate bond index.

To achieve its dividend income objective, the new fund selects 100 stocks from the 1000 largest US stocks that have a history of paying consistent or growing dividends and that generate high dividend yields. All the 100 stocks are weighted equally for optimal diversification.

02-27-2015

Ulli Friday, 27 February 2015, 3:58 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For February 27, 2015

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2015/02/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-02262015/

————————————————————

Market Commentary

Friday, February 27, 2015

STOCKS FALL FRIDAY, BUT POST IMPRESSIVE MONTHLY RESULT

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks fell Friday, but the major indexes were little changed on the week. Consumer staples lead the gainers, while energy shares declined along with oil prices. Friday’s trading officially rounded out the month of February, which was perhaps the best month for major indexes since October of 2011. For the month, the S&P 500 rose 5.5%, the Dow gained 5.6% and the Nasdaq surged 7.1%, despite horrific economic data, which missed 90% of expectations.

Fed Chair Janet Yellen provided two days of testimony to Congress this week. The primary takeaway was that inflation and wage growth remain low enough that a rate hike is unlikely in the next couple of months, but the Fed continues to monitor for improving conditions that would warrant a tightening of policy.

Economic data for this week was mixed overall, but allegedly continues to point toward growth of 2.5% to 3% for 2015 in the U.S., which is a stronger pace than most developed economies around the globe. Gross domestic product (GDP) growth was revised downward to 2.2% from the initial estimate of 2.6%. The downward revision was slightly smaller than expected; however, consumer spending was the strongest driver of economic growth in the quarter, growing 4.2%, which is the fastest pace since the first quarter of 2006.

9 of our 10 ETFs in the Spotlight slipped today with one them moving into the red YTD, as table 2 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.

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:

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) changed only immaterially during this non-directional week.

Here’s how we ended up:

Domestic TTI: +3.84% (last Friday +3.80%)—Buy signal effective 10/22/2014

International TTI: +3.76% (last Friday +3.79%)—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.

————————————————————-

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 Ed:

Q: Ulli: In looking at the data you have for the ETFS/Funds, what would be the best way to use the data to come up with potential ETF/Fund buys or conversely sells.

I’m not asking for a recommendation, just the process used to pick the best ETF’s/Funds listed. I mostly use Vanguard ETF’s and funds. If you think I should try other fund families, can you tell me the process to find the best ones?

I don’t like funds with high fees or restrictions in trading, although I don’t do that much, other than to balance my holdings. I’d very much the input you can provide.

A: Ed: While there are many ways to use the ETF/MF tables, I personally prefer to select a mix of funds, preference being ETFs, which demonstrate good upward momentum yet have shown historically some decent resistance to market pullbacks.

You can do that by dropping down the ranking list from the top a few spots, which would eliminate those high performers that tend to collapse quickly during corrections. Our goal is to remain invested as long as possible during up trends while minimizing any potential whip-saw signals.

To make it even easier, I selected 10 ETFs in the Spotlight, which are featured and updated in my daily market commentary. They were chosen based on performance and above average resistance to sell offs along with the fact that they are all trading in high volume. Times change and ETF performance rotates, but you can select from that list and/or find the equivalent at Vanguard, if you prefer.

Hope that helps.

———————————————————-

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

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/

———————————————————

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

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