Ulli... The ETF Bully

A Sluggish Start To The Second Week Of December

Ulli Monday, 8 December 2014, 3:41 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks dropped on Monday with the Dow stumbling more than 100 points. The S&P 500 retreated more than 0.8% and the Nasdaq gave back more than 0.7%. Falling oil prices were the culprit that dragged down the energy sector. U.S. crude fell more than 4% to close the day at $63.05 a barrel. Chevron (CVX) and ExxonMobil (XOM) were two of the biggest decliners in the Dow. Chevron dropped 3.8% to $106.70 and ExxonMobil fell 2.3% to $91.69.

More evidence of slowing growth in East Asia also raised concerns for investors today, mostly about global demand for manufactured goods, shown by weak trade data from China and news that Japan’s recession may be more serious than initially presumed. Chinese stocks surged on the news though because holders of mainland China stocks are betting on increased government stimulus.

On the upside, shares of Cubist Pharmaceuticals (CBST) blasted up 35% today today and passed the $100/share mark after Merck (MRK) announced that it will be acquiring Cubist for $102/share.

With little exciting economic news ahead this week, I can only hope that the markets will shrug off this slow start to the week and get back on their bulls to charge ahead.

3 of our 10 ETFs in the Spotlight bucked the trend and inched higher today; all 3 of them made new highs as the YTD table below shows.

ETFs/Mutual Funds On The Cutline – Updated Through 12/05/2014

Ulli Monday, 8 December 2014, 6:10 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 264 (last week 278) 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. 41 ETFs (last week 44) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 659 (last week 710) above the line and 187 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: Are The Real Job Gains For November Higher Than Reported?

Ulli Sunday, 7 December 2014, 6:08 AM Market Review Contact

Despite the solid November nonfarm payroll report, the “doves” of the Federal Open Market Committee are likely to “shake it off” because policy makers tend to always remind investors one report doesn’t make a trend, said Carl Riccadona, an economist at Bloomberg.

However, it’s bit of a new norm in November for the labor market because if the economy is up-shifting, then it will be a very complicated first-half of next year for Janet Yellen and rest of the Federal Reserve “doves” to slowly tiptoe toward that first rate increase without riling the markets, he noted.

Asked if job gains in excess of 300,000 were sustainable, Carl said he was skeptical about sustainability. If investors looked at all the labor market indicators for November versus October, and if October’s report could be graded A, then November’s report really would have been an A-minus because there was actually some cooling.

New ETFs On The Block: First Trust Eurozone Alphadex ETF (FEUZ)

Ulli Saturday, 6 December 2014, 6:05 AM Uncategorized Contact

European equities have performed well this year despite stubbornly low inflation in the European Union with the pan-European STOXX Europe 600 Index jumping 3.1 percent in November alone.

Since all the major EU economies are net importers of crude oil, falling gas prices in pumps are expected to boost consumer spending across the region, thus creating sustainable demand in the real-economy and pushing up price levels going forward. The European Central Bank has already cut interest rates to record low level while introducing negative interest rates in order to boost growth.

First Trust, the Wheaton, Il-based sixth largest US issuer of exchange-traded funds, recently launched the First Trust Eurozone AlphaDEX ETF (FEUZ) to take advantage of eurozone’s twin economic stimulus; loose monetary policy and low energy prices. FEUZ is First Trust’s first dedicated euro-area ETF that focuses on eurozone-domiciled companies.

12-05-2014

Ulli Friday, 5 December 2014, 3:48 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For December 5, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/12/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-12042014/

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Market Commentary

Friday, December 5, 2014

BULLS REMAIN IN FULL FORCE TO CLOSE OUT THE WEEK

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The Dow and S&P 500 closed the week higher on strong economic data. The Dow, closing today at 17,958.79 (another record high), is making a run at hitting 18,000 for the first time in history. The domestic economy continues to gain momentum as we approach the New Year, as was reinforced by another strong jobs report today alongside robust readings from the ISM manufacturing and nonmanufacturing indexes.

Employers added 321,000 jobs in November, the largest one-month gain in more than two years, the Labor Department said. Those numbers, which kept the jobless rate steady at 5.8%, far exceeded most economists’ expectations of 225,000 new jobs.

Starbucks (SBUX) continued to power forward to an-all time high today as the coffee shop icon debuted a huge flagship Starbucks store in its hometown of Seattle. If you remember from earlier this week, Starbucks has unrolled plans for a change in business strategy that entails price increases, as well as serving alcoholic beverages. The shift in consumer presence in malls to online shopping has decreased in-store sales, thus the company is making adjustments all while trying to double its revenue by 2019.

It is an extremely quiet week for economic data. Most of the attention will be on the Thursday retail sales report, giving an early indication of how the month of November fared. While early reports showed somewhat disappointing Black Friday sales, expectations are for retail sales excluding gas prices to have increased 0.5% in November from October.

9 of our 10 ETFs in the Spotlight edged higher today; 3 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) were mixed and changed only slightly closing the week as follows:

Domestic TTI: +3.46% (last Friday +3.70%)—Buy signal since 10/22/2014

International TTI: +1.62% (last Friday +1.54%)—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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