Major Markets All Close Higher On Positive News From Japan And Germany

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

All major U.S. indexes closed higher today, driven mostly by the health care sector and positive news from abroad. The S&P 500 rose 0.5%, the Dow gained 0.2% and the Nasdaq jumped 0.7%.

The news from abroad was mostly centered on Japan and Germany. Japan’s Prime Minister Shinzo Abe informed government leaders that he would postpone a sales tax increase to 2017, which was initially planned for 2015. This announcement received notable praise because the proposed 2015 sales tax hike would have offset much of the stimulus the government is currently pumping into the weakened domestic economy.

On the German front, the good news today centered around an economic rebound. Today we heard reports that a measure of German economic confidence improved for the first time in nearly a year. Over the past 12 months, Germany’s export-oriented economy has been hit by mounting tensions with Russia over the Ukraine crisis and also, to a lesser degree, by the conflicts in the Middle East. Many analysts were quick to remind that the economic climate in Germany (and the EU as a whole) remained fragile due to ongoing political tensions.

And, on the tech front, there was a lot of buzz today about how Apple (AAPL) could be the first $1 trillion company. At present, Apple has a market cap close to $670 billion. That’s more valuable than any other company in the S&P 500, and is more than the GDP of Indonesia. Microsoft is Number 2 at $409 billion. Can the cultish company reach the $1 trillion mark? Only the future will tell.

All of our 10 ETFs in the Spotlight gained on the day with 6 of them making new highs as the YTD table below shows.

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Stocks Slightly Gain; China’s Equity Market Opens To The World

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks changed little today. The S&P 500 and Dow both gained a tad, while the Nasdaq slipped 0.37% into negative territory.

M&A news stole a number of headlines today, focusing on two major mergers that entail a combined $100 billion value. The first was Activis PLC’s $66 billion bid for botox maker Allergan. The second was Halliburton’s $35 billion offer for rival oil services company Baker Hughes. Shares of Baker Hughes (BHI) gained 8.92% to close at $65.23 today on the news. However, the news couldn’t lift battered energy stocks, which on average fell 1.1% today.

A separate large portion of headlines today focused on the opening of the China’s A-share markets to foreign investment. The Shanghai-Hong Kong Stock Connect is expected to allow the equivalent of USD $3.8 billion per day in transactions and open up the mainland equity market to the world. In short, the link enables international investors to trade selected stocks on Shanghai’s tightly restricted exchange and let mainland investors buy shares in Hong Kong.

The key questions investors should be asking are not which stocks to buy but how does this new market facilitate greater access to and circulation of the Chinese Renminbi currency?

9 of our 10 ETFs in the Spotlight managed to close up while 3 of them made new highs as the YTD table below shows.

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ETFs/Mutual Funds On The Cutline – Updated Through 11/14/2014

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 279 (last week 266) 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. 43 ETFs (last week 40) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 706 (last week 696) above the line and 140 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 Opinon: US Markets Historically Have Performed Better With A Democratic President And A Republican Congress

Ulli Market Review Contact

92835431US equities will only get stronger from here and the strongest six months is yet to come, said Sam Stovall, Chief Equity Strategist at Standard & Poor’s. The seasonal period of November through April has outperformed May through October by a 7.0 percent versus 1.4 percent, respectively.

Also, the six-month period after mid-term elections gets even better with an average gain of more than 15 percent in the November through April period. So historically, the markets are entering this seasonally strong period, he noted.

Empirical data shows markets perform better when there’s a Republican Congress and a Democratic President and stocks have historically gained about 15.1 percent, beating out any other political scenario.

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New ETFs On The Block: ProShares Morningstar Alternatives Solution ETF (ALTS)

Ulli Fund of Funds Contact

156288184Morningstar, one of the investment-industry’s most trusted names, partnered with Maryland-based ProShares, the biggest issuer of leveraged and inverse exchange-traded funds, to launch the ProShares Morningstar Alternatives Solution ETF (ALTS).

The new ETF is a “fund of funds” and invests in other ProShare products, thus providing a wide exposure to the liquid “alternative investment” niche with a single exchange-traded fund.

The passively-managed fund tracks the Morningstar Diversified Alternatives Index, an index that employs a broad range of alternative strategies based on a proprietary momentum-type model that is rebalanced monthly to better respond to changing market conditions.

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11-14-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For November 14, 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-11122014/

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Market Commentary

Friday, November 14, 2014

MARKETS BOOK A FOURTH STRAIGHT WEEK OF GAINS HEADING INTO THE HOLIDAY SEASON

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Trading was a bit volatile today, but the S&P 500 managed to mark another record high, and U.S. markets across the board posted another week of gains. On the day, the indexes inched up only slightly, however, for the week, the Dow was up 0.4%, the S&P 500 gained 0.4% and the Nasdaq surged 1.2%.

Volatility in trading persisted throughout the day, despite investors receiving a solid report on October retail sales. They came in about 0.3% higher, which should add a bit of bullish sentiment to retail investors heading into the holiday season. Perhaps the boost was due to a lessened burden on consumers’ wallets at the gas pump over the past two months. As you know, crude oil prices have been falling of late, however, the benchmark U.S. crude index did rise 2.4% today to $75.97 a barrel.

In case you didn’t hear, Virgin America (VA) had their IPO today. The young and fresh airline had an initial price of $23 per share, but the stock began trading on the Nasdaq at $27 per share and shares crept higher throughout the day to close at an even $30.00. I imagine Richard Branson enjoyed a cocktail accordingly at the close of trading.

For the week ahead, manufacturing will be in focus with the release of Industrial Production numbers. The strength of housing activity will also receive a closer look with the release of housing starts, building permits and existing home sales.

4 of our 10 ETFs in the Spotlight managed to close up while 2 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:

MaxDD

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:

YTD

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) meandered with the International one improving but not yet to a point where a new Buy signal is warranted, since this TTI has been crawling slightly above and below its trend line for the better part of a week without making any clear headway in either direction.

Here’s how we ended the week:

Domestic TTI: +3.13% (last Friday +3.09%)—Buy signal since 10/22/2014

International TTI: +0.20% (last Friday -0.30%)—Sell signal since 10/1/2014

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 Larry:

Q: Ulli: Thanks so much for the information that you share. It has helped me tremendously and freed up a lot of time, to boot.

I am wondering what your thoughts are re: buying put options to help protect profits – along with your stop loss rules, of course. It seems that this might help to preserve profits in the event of a down turn. I am thinking of puts that would be about 6 or 8 weeks out, and perhaps of protecting a part of my holdings.

Thanks again.

A: Larry: Sure, you can buy put options on the indexes to protect part of your assets from a sudden decline. Your timing has to be pretty good; otherwise the cost of the put options will eat into your gains.

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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/

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

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