Indexes End Slightly Lower, With Little Movement After Labor Weekend

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets ended mostly lower today, with tech stocks making a big drag, especially Apple (AAPL). The S&P 500 dropped a slight 0.06%, the Nasdaq fell 0.55% and the Dow was the only major index that gain, closing up 0.06%. There seems to be notable anticipation from investors regarding the European Central Bank’s upcoming policy meeting.

Also, in international news, investors were initially encouraged today by news that Russia and Ukraine were discussing a cease-fire agreement and had agreed to a framework to settle the conflict. But markets were unable to hold on to the gains and steadily drifted lower with losses accelerating late in the day.

In tech news, Samsung Electronics Co Ltd announced that is has launched a virtual reality headset for its new Galaxy Note 4 tablet using technology from Oculus VR, a company that Facebook Inc (FB) recently acquired for $2 billion.

7 of our 10 ETFs in the Spotlight gained with 3 of them making new highs for the year.

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A Slow Start For The Markets In September

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks ended in a similar fashion to last Friday, mostly lower despite encouraging economic data and a plethora of corporate deals. The S&P 500 managed to stay above the 2,000 mark after dropping 0.07%, closing at 2,002.28. The Dow fell 0.18%, while the Nasdaq gained 0.39%.

On the economic front, two reports were released today that pointed to stronger U.S. economic growth. The Institute for Supply Management, a trade group, said its gauge of manufacturing rose to 59 in August, buoyed by new orders for goods and increased production. Anything above generally 50 signals growth.

Dollars and Dollars were back in M&A news today as Dollar General (DG) raised its bid from $78.50 to $80 a share, for its rival Family Dollar (FDO). That tops Dollar Tree’s (DLTR) offer of $74.50 for Family Dollar. All three stocks rose: Dollar General was up 0.6% to $64.36, Family Dollar gained 0.5% to $80.22 and Dollar Tree jumped 1.6% to $54.46.

3 of our 10 ETFs in the Spotlight managed to eke out a gain today with 2 of them making new highs for the year.

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ETFs/Mutual Funds On The Cutline – Updated Through 08/29/2014

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 398 ETFs, of which currently 354 (last week 344) 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. 75 ETFs (last week 73) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 797 (last week 776) above the line and 83 below it out of the 850 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 European Central Banks Initiate QE?

Ulli Market Review Contact

92835431Latest data from he European Union showed annual inflation rate in the euro-zone slowed further to 0.3 percent in July from 0.4 percent in the prior month. A combination of two factors –low import prices, which is a legacy of a stronger euro, and low food prices are pushing the euro-area into the low inflation regime, said Paul Donovan, Managing Director of Global Economics at UBS AG. However, at this point there is a low inflation problem in the eurozone, but not an outright deflation problem, he noted.

Asked if the low inflation problem compounded the low-growth problem as well, Paul said when low-growth combines with low inflation, the outcome is a toxic “low nominal gross domestic product.” That’s a problem because when it comes to the government’s fiscal deficits and debt management, the nominal GDP (sum of real GDP and inflation rate) matters, he explained.

Asked to suggest policy solutions, Paul said politicians need to get their act together. That means initiating structural reforms of the labor market and a “proper” banking union, not a half-hearted effort that is being witnessed currently.

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New ETFs On The Block: Compass EMP US Discovery 500 Enhanced Volatility Weighted Index ETF (CSF)

Ulli Small Cap ETFs Contact

93533368Compass Efficient Model Portfolio Funds, the Tennessee-based registered investment advisor and fund issuer, introduced its fourth Smart-Beta exchange-traded fund on the NASDAQ following the firm’s debut in the ETF segment last month.

The newly launched Compass EMP US Discovery 500 Enhanced Volatility Weighted Index ETF (CSF) seeks exposure in US small-cap stocks while giving protection against downside risks. CSF tracks the in-house developed CEMP US Small Cap 500 Long/Cash Volatility Weighted Index, which in turn is based on the CEMP US Small Cap 500 Volatility Weighted Index, a volatility-weighted benchmark of publicly-traded US stocks with market capitalizations below $3 billion.

The CEMP US Small Cap 500 Long/Cash Volatility Weighted Index, unlike the parent index, additionally includes an innovative mechanism which allows it to slash equity holdings by 75 percent through increased cash holdings during bear markets.

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08-29-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For August 29, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/08/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-08282014/

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Market Commentary

Friday, August 29, 2014

STOCKS CONTINUE RIDING HIGH ON IMPROVING U.S. ECONOMY

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities finished higher on the week, led by the increase in utilities and telecom stocks. The Dow rose 97 points to end the week at 17,098, up 0.6%. The S&P 500 increased 15 points, or 0.8%, to end at 2,003. In a week when the US economy showed renewed strength, the S&P 500 Index broke through the 2,000 milestone, despite escalating geopolitical tensions in Ukraine and Syria.

The pace of US economic growth in the second quarter was revised upward to a seasonally adjusted, annualized 4.2% from an initial estimate of 4.0%, the US Department of Commerce reported. Business spending on new buildings, machinery and research and development grew more than first estimated.

US economic reports also included improvements in two consumer confidence measures, though an unusually strong durable goods report was skewed by a large order for airplanes that will take years to fulfill. A slower pace of US home price increases, and a drop in the volume of new home sales, was seen as diffusing any potential US housing bubble.

One of the major M&A stories of the week was that of Burger King (BKW). Burger King Worldwide will buy Canadian coffee and doughnut chain Tim Hortons Inc. (THI), creating the world’s third-largest fast-food restaurant group, with $23 billion in combined annual sales and more than 18,000 restaurants in 100 countries. Burger King stands to save on corporate taxes by moving its headquarters to Canada, a controversial move known as a tax inversion.

9 of our 10 ETFs in the Spotlight managed to gain today with 4 of them making new highs for the year.

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

All of them are currently in “buy” mode, meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

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

YTD

To be clear, 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 is taken out in the “Off High” column.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) again stayed with the uptrend and closed higher for the week:

Domestic TTI: +3.22% (last Friday +2.87%)

International TTI: +2.59% (last Friday +2.15%)

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 Roger:

Q: Ulli: Could the ten Spotlight ETFs be used in a portfolio investment strategy or just for a piece of an overall portfolio?

Second, would you logically try to weight the percent investment in each by tracking an appropriate benchmark?

A: Roger: Sure, you can use it as a standalone portfolio, as some readers have done, or, you could use only those ETFs that are showing strong upward momentum, such as I do in my advisor practice.

More importantly, you need to follow my recommended sell stop discipline, to make sure you limit your downside risk should this bull market die all of a sudden.

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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/

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

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