Another Day In The “Red” For Domestic Markets

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks continued falling today after weaker than expected Eurozone data send European markets downward in addition to news that the U.S. commenced airstrikes against ISIL in Syria. All major indexes fell.

Today, we received news that Bed Bath & Beyond’s (BBBY) second quarter profit numbers exceeded Wall Street expectations. The company reported Q2 profits of $224 million, however, the stock still fell 1.57% today, continuing on its downward slide since January.

Also today, we heard that the latest home price index report from the FHFA showed home prices rose 0.1% in July, less than the 0.5% that was expected. Not a piece of good news to add to the turmoil in the markets today.

And in the Far East, Asian markets were mixed as China’s Shanghai composite index jumped 0.9% on better-than-expected Chinese manufacturing data. Japan’s benchmark Nikkei 225 index fell 0.7% and Hong Kong’s Hang Seng index dropped 0.5%.

All of our 10 ETFs in the Spotlight again headed lower as the slide continued.

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Stocks Stumble Out Of The Gate To Start Off The Week

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Well, the stock market did not start the week with a bang by any means. The Dow dropped 0.6% from its record close on Friday, the S&P 500 fell 0.8% and the Nasdaq plunged a whopping 1.1%. A disappointing home sales report also added to the negative tone on Wall Street today. Existing home sales broke a four-month string of gains and fell 1.8% in August.

Tech stocks took a dive today across the board and Alibaba (BABA) fell more than 4% on its second day of trading. This should not come as a big surprise though, as we have all seen enough IPOs to know that there is usually massive volatility in the weeks that follow an IPO, especially for website based companies like Facebook (FB), Twitter (TWTR) and now Alibaba. While many analysts remain bullish on Alibaba, they are not so optimistic about Yahoo! (YHOO) it seems. Yahoo, which holds a 22% stake in Alibaba, lost 5.6% to $38.65 after dropping nearly 3% Friday.

In M&A news, we heard today that Germany’s Merck (MRK) is planning on buying the chemical firm Sigma Aldrich (SIAL) for $17 billion. Sigma’s stock jumped up about 33% today to end at $134.40.

All of our 10 ETFs in the Spotlight joined the major indexes and headed south to varying degrees.

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ETFs/Mutual Funds On The Cutline – Updated Through 09/19/2014

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 306 (last week 318) 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. 58 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 726 (last week 747) above the line and 124 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: Does Low Inflation Give The Fed More Time To Improve The Employment Rate?

Ulli Market Review Contact

92835431The Federal Reserve is likely to raise interest rates in June 2015 as economic data has been pretty soft in the last few weeks, said David Joy, chief market strategist at Ameriprise Financial. However, eventually, markets are likely to witness a 10 percent correction in anticipation of a rate hike, possibly by the end of the year, David added.

Latest Consumer Price Index data showed inflation remained unchanged in August for the first time in more than a year. Asked if price pressure has lost momentum and inflation has bottomed out, David answered in affirmative. There is very little inflationary pressure either at home where the economy is expanding at a faster clip, or in Europe, where growth has been more sluggish.

That gives Janet Yellen a lot of room to run and buy some time to get the unemployment rate down to where she wants it. It’s kind of best of all worlds for the Fed right now, as wages are not moving up fast enough yet, he observed.

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New ETFs On The Block: ProShares MSCI EAFE Dividend Growers ETF (EFAD)

Ulli Dividend ETFs Contact

92439653ProShares, the Maryland-based largest US provider of alternative exchange-traded funds, recently expanded its line-up of non-inverse and non-leveraged ETFs with the launch of the ProShares MSCI EAFE Dividend Growers ETF (EAFD).

The new passively-managed income-oriented fund invests in developed-market stocks that have a solid history of growing dividend payouts, thus potentially offering investors another option to boost returns in a low yield environment.

EAFD tracks the MSCI EAFE Dividend Masters Index, an index that incorporates minimum 40 members from the MSCI EAFE Index and that have increased their dividends for at least 10 straight years. The methodology involves equal-weighting the components while capping sector-exposure at 30 percent and country-exposure at 50 percent of the total index. The index is reconstituted each November and rebalanced four times annually; in February, May, August and November.

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09-19-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For September 19, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09182014/

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Market Commentary

Friday, September 19, 2014

DOW RIDES HIGH ON ALIBABA IPO

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks finished higher on the week, led by a jump in telecom stocks. The S&P 500 rose 1.23% and the Dow gained 1.35%.

We heard a lot of news about Alibaba (BABA) today. Shares traded freely for the first time today as the stock soared as high 38% at one point. The Alibaba IPO is now officially the largest IPO in history. At its closing share price Friday, Alibaba now has a market value of $231 billion, which exceeds the combined market capitalizations of Amazon (AMZN) and eBay (EBAY).

Investors were also buoyed by Scottish voters’ rejection of an independence referendum, adding to the upward momentum created by the Fed’s announcement early this week that interest rates will not rise for a considerable time.

And lastly, Apple (AAPL) initiated sales of the iPhone 6 and 6+ today, however, shares still ended down about 0.8%.

2 of our 10 ETFs in the Spotlight gained but no new highs were made today.

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) recovered this week and managed to edge up from last Friday’s close:

Domestic TTI: +2.37% (last Friday +2.14%)

International TTI: +1.66% (last Friday +1.60%)

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 Ray:

Q: Ulli: I am a relatively new subscriber to your excellent newsletter. I understand your buy, hold and sell strategies on the overall market.

However, I need help on your criteria in selecting the individual ETF/mutual fund buys showing strong upward momentum. Do you just pick say from the top 10 of the M-Index list? Do you rotate from funds that drop in and out of the top 10 list or do you hold your original purchase until it hits the sell stop?

A: Ray: There are many ways as to use the tables in the StatSheet. The more conservative one, which I recommend at these elevated market levels, is to make your selections from the 10 ETFs in the Spotlight, which are featured as part of the daily market commentary.

The idea here is to avoid unnecessary whip-saw signals caused by ETFs that are too volatile, and try to stay with the long-term trend until our trailing sell stops and/or trend line crossings signal a move to the sidelines.

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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/