Favorable Jobs Report Just Couldn’t Cut The Mustard Today

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The major indexes here in the U.S. ended lower today, despite a favorable jobs report from the Labor Dept that showed job openings are at their highest level since February of 2001. The S&P 500 dropped 0.15%, the Dow finished down 0.05% and the Nasdaq slipped 0.28%.

For all you lovers of Kate Spade handbags, today was not all “shiny leather” for owners of the stock. Kate Spade & Co (KATE) took a dive today by 25% to close at $29 a share amidst heavy trading volume when the company warned that gross margins would be weaker than expected for the year.

King Digital Entertainment (KING) also took a tumble today after it reported that the online game maker generated less revenue than Wall Street had expected. Shares dropped over 20% to end the day around $14 a share. The CEO Riccardo Zacconi was quick to unveil a special dividend of $150 million to investors, but that didn’t seem to be enough to keep the stock from trending lower.

In international news, investors are still keeping a close eye on Russia, which sent a 280 truck convoy of humanitarian aid to eastern Ukraine today. While Russia is ‘playing nice’ at present, many remain uncertain as to where the conflict is headed in the near future, especially given Russia’s recent decision to boycott U.S. agricultural imports.

In a reversal from yesterday, of our 10 ETFs in the Spotlight, 9 retreated and 1 inched up slightly.

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Stocks Edge Higher Amidst Easing Ukraine Tensions And Demand For Ebola Cure

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The markets closed higher, driven higher by a bit calmer geopolitical tensions abroad, as well as favorable comments from the Fed. The S&P 500 gained 0.3%, the Dow rose 0.10% and the Nasdaq ended the day up 0.7%. Consumer staples and technology were the leaders in the S&P 500, and another interesting bit of news that circled today was that small cap companies have outperformed large cap companies in five of the past six trading sessions.

In the international realm, Russia announced today that it would send a humanitarian convoy into Eastern Ukraine, which could put a temporary stop to gunfights between the Ukrainian forces and rebels in the region. This perhaps eased concerns, at least for today.

Also, investors snapped up shares of companies developing potential treatments for the often fatal Ebola virus disease amid growing calls to expedite research funding and drug approvals. Amongst top performing pharmaceuticals today were Tekmira Pharmaceuticals Corp (TKMR) and U.S. based Sarepta Therapeutics Inc (SRPT).

Of our 10 ETFs in the Spotlight, 9 headed higher and 1 retreated slightly.

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

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 297 (last week 297) 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. 70 ETFs (last week 67) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 630 (last week 612) above the line and 220 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: Do US Stock Prices Look Stretched Now?

Ulli Market Review Contact

92835431The rise in geopolitical tensions in recent weeks that triggered a stock market slump in the US validated Ameriprise Financial’s Chief Market Strategist David Joy’s call in June for offloading equities.

While equities are likely to be punished further as markets are probably halfway through the latest move, there is an opportunity for a relief rally if the news in Ukraine eases, David said. But it’s likely to fester for some time and markets are likely to see support around the 200-day moving average, which takes the S&P to about 1865. That’s the full extent of the sell-off if the current trend continues, he added.

Many investors complain there is nowhere to go but US stocks even as the S&P 500 has returned only about 3.3 percent year-to-date. The dollar has not done great either although US Treasuries have returned about 3.8 percent while gold is up 8.7 percent year-to-date.

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New ETFs On The Block: First Trust Dorsey Wright International Focus 5 ETF (IFV)

Ulli International ETFs Contact

91551549First Trust, a leading US provider of exchange-traded products, recently launched the international version of the popular First Trust Dorsey Wright Focus 5 Fund (FV), which has already amassed more than $350 million in assets since its debut in early March. The First Trust Dorsey Wright International Focus 5 ETF (IFV) is the latest example of the “smart beta” trend that has gained traction in the world of ETFs.

IFV is a fund of funds and uses the Dorsey Wright relative strength technical indicators for screening First Trust’s suite of AlphaDEX international funds with a momentum strategy overlay. The AlphaDEX suite of funds use a quantitative screen to that considers fundamentals such as cash flow, book value and price to sales.

Dorsey Wright Associates manages several funds for ETF provider PowerShares that apply the same Relative Strength methodology to individual stocks.

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08-08-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For August 8, 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-08072014/

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Market Commentary

Friday, August 8, 2014

BULLS BACK ON TRACK TO END FIRST WEEK OF AUGUST

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks ended higher today and closed out the first week of August on a strong note. This comes as a slight sigh of relief given how many international crises have rattled markets over the past two weeks. All major indexes headed higher, as the weekly chart above shows.

The Labor Department announced today that productivity rose more than expected in the second quarter. This increase is a rebound from the first-quarter report, which was the biggest productivity drop in more than three decades.

So, all signs on the domestic front tend to be indicating continued economic growth here at home. However, a batch of retail corporate earnings announcements coming up soon could be useful to gain a greater perspective on consumer spending in general.

Macy’s (M), Wal-Mart (WMT), Home Depot (HD), Nordstroms (JWN) and Estee Lauder (ELAA) should provide an interesting array of spending habits across a wide spectrum or retailers.

Our 10 ETFs in the Spotlight joined today’s rally and gained nicely on the day.

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

9 of them are 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) recovered from Thursday’s low point, thanks to today’s strong rebound, and ended the week as follows:

Domestic TTI: +1.57% (last Friday +1.23%)

International TTI: +0.17% (last Friday +1.07%)

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

A note from reader Chris:

Q: Ulli: Have you seen any benefit by an investor creating their own portfolio comprising of a mix of Value ETFs (Large, Mid, Small, Developed, Emerging) and then coupled with Momentum ETFs of similar types. The goal is that both types of Value & Momentum ETFs hopefully won’t necessarily correlate with each other depending what the market is doing and spread some of the risk around.

My other question: are Momentum ETFs similar to Growth ETFs regarding how their index formulas/algorithms are determined or are both completely different kinds of ETF strategies?

A: Chris: No, I have not heard about any reader attempting that. “Value” is such a vague definition. When markets rise or fall, “all” equities will follow that trend, the only difference is the degree of change. A good case in point would be yesterday’s (7/31/14) price action where SPY dropped 1.94%. Its low volatility cousin, SPLV, which some consider a value play, surrendered 1.87%. That is hardly non-correlation.

To me, it’s far more important that you employ an exit strategy that gets you out of the market before a major disaster strikes, such as the bear effects of 2000 and 2008. Trying to distinguish between a Momentum ETF and Growth ETF is nothing but an exercise in futility.

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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/