Stocks Back On Track Amidst Solid Report From Citigroup And M&A News

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks kicked off this week on a high note as the markets rocketed higher with the Dow once again passing the 17,000 mark to close at 17,055. In general, investors were encouraged by a slew of M&A activity alongside better than expected earnings from Citigroup. All major indexes gained as the chart shows.

In M&A news, Shares of drug maker Mylan (MYL) jumped 2% to $51.24 after the company announced it will buy Abbott Laboratories’ (ABT) generic-drugs business in developed markets for stock valued at about $5.3 billion. Abbott gained 1.3% to $41.82.

Also in pharmaceutical M&A news, AbbVie (ABBV), maker of the arthritis drug Humira, offered over the weekend to pay cash and stock equal to about $91.10 a share for Shire (SHPG), maker of the attention deficit hyperactivity disorder drugs Vyvanse and Adderal XR. Its latest offer exceeded its prior one of $51 billion.

This is a great start to the week, and with the market trading near all-time highs, investors will be focused on a large number of corporate earnings coming down the pipeline, including quarterly reports from General Electric (GE), Google (GOOG), Bank of America (BAC) and Johnson & Johnson (JNJ).

Our 10 ETFs in the Spotlight rallied with the indexes with 2 of them reaching new highs.

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ETFs/Mutual Funds On The Cutline – Updated Through 07/11/2014

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 375 (last week 392) 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. 87 ETFs (last week 91) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 761 (last week 811) above the line and 89 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: Is The Federal Reserve Likely To Defer Rate Hikes Since Inflation Has Remained Weak?

Ulli Market Review Contact

92835431The recent turmoil in the markets caused by Portuguese lender Banco Espirito Santo almost looked like a mini panic as a lot of investors jumped the gun assuming another credit crisis has hit Europe, said Brian Jacobsen, Chief Portfolio Strategist at Wells Fargo Advantage Fund. However, it may well turn out to be a good buying opportunity as markets are likely to witness a rebound from here, he noted.

Asked what is fueling investor confidence, Brian said after the latest selloff, people realized soon that banks in the euro zone are not as bad as they thought. The situation in Europe is a lot better than it was two years ago, or even one year ago; and when people realized that and came to their senses, markets quickly recouped losses. The fundamentals, i.e. business earnings in the US, are continuing to grow. The continued upward trend of corporate earnings is stoking market confidence, he observed.

Latest data show 16 out of 25 companies beat earnings estimate so far this year. Asked if the earnings season will be able to maintain the strike-rate, Brian answered in negative. Analysts’ expectations were too lofty in terms of a rebound in the second quarter because of the sharp decline in the first-quarter GDP (minus 2.9 percent). The negative GDP print didn’t really translate into a downdraft for corporate earnings, which is a little surprising.

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New ETFs On The Block: Advisorshares Sunrise Multi-Strategy ETF (MULT)

Ulli International ETFs Contact

91551519AdvisorShares, the Bethesda, Maryland-based issuer famous for its actively managed suite of funds, expanded its offerings by launching a new product focused on the liquid alternative strategy.

The newly debuted AdvisorShares Sunrise Multi-Strategy ETF (MULT) is managed by Sunrise Capital Partners, a San Diego-based registered investment advisor famous for its quantitative asset management expertise. AdvisorShares now sponsors 25 active ETFs with assets under management exceeding $1.9 billion.

Though Sunrise has been around for nearly 35 years, it has been managing assets of high-net-worth individuals, small family offices, few foundations and bigger institutional-focused Wall Street investors. It presently oversees client assets with products that include a hedge fund and a separately managed account. MULT marks the sub-advisor’s entry into the 1940 Investment Company Act space that governs open-end funds.

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07-11-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For July 11, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/07/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-07102014/

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Market Commentary

Friday, July 11, 2014

GLOBAL ECONOMY CONCERNS & EARNINGS ANTICIPATION LEAVES MARKET LOWER FOR THE WEEK

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks ended the week lower, pulling back slightly from record highs. The Dow fell from its record high 17,000 mark to end the week down-0.7%. The S&P dropped 0.9%, and the Nasdaq fell 1.35%.

Global economic growth concerns surfaced after disappointing economic readings in China, Japan, and the EU. Caution also rose following news of potential financial problems with a Portuguese bank, reminding investors that the EU is still susceptible to periodic setbacks from the European Debt Crisis. Despite the recent drop in stock prices, markets remain broadly higher on the year, with the S&P 500 still up roughly 7% in 2014, continuing its 5-year bull run.

After what has appeared to be fairly steady US economic growth this year, investors await corporate earnings results for the second quarter. According to FactSet, S&P 500 companies are forecast to report a 4.8% increase in second-quarter earnings per share from a year ago after a 2.1% rise in earnings in the first quarter of 2014. Only a few major companies had released earnings reports by the end of the week, making any overall trend difficult to discern at this early stage.

Let’s stay tuned for next week!

Our 10 ETFs in the Spotlight slipped for the week with none of them making a new high for 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

All 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) retreated from last week’s high and closed as follows:

Domestic TTI: +3.05% (last Friday +4.21%)

International TTI: +3.05% (last Friday +5.20%)

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 Joe:

Q: Ulli: If the bubble bursts, where do we need to be invested? Or do we need to be in cash?

A: Joe: The first move, once the Domestic Trend Tracking Index (TTI) breaks below its long-term trend line indicating an upcoming bear market, is to the safety of the money market funds, as markets tend to get extremely volatile during a severe correction.

Then we can then evaluate, without being emotionally attached, if there are any asset classes, such as bond ETFs that are rallying despite the equity meltdown. If that’s the case, we may get invested in those areas. If things look uncertain, we will remain safely on the sidelines until the fog clears.

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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/

ETF/No Load Fund Tracker Newsletter For July 11, 2014

Ulli Market Commentary Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2014/07/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-07102014/

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Market Commentary

Friday, July 11, 2014

GLOBAL ECONOMY CONCERNS & EARNINGS ANTICIPATION LEAVES MARKET LOWER FOR THE WEEK

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks ended the week lower, pulling back slightly from record highs. The Dow fell from its record high 17,000 mark to end the week down-0.7%. The S&P dropped 0.9%, and the Nasdaq fell 1.35%.

Global economic growth concerns surfaced after disappointing economic readings in China, Japan, and the EU. Caution also rose following news of potential financial problems with a Portuguese bank, reminding investors that the EU is still susceptible to periodic setbacks from the European Debt Crisis. Despite the recent drop in stock prices, markets remain broadly higher on the year, with the S&P 500 still up roughly 7% in 2014, continuing its 5-year bull run.

After what has appeared to be fairly steady US economic growth this year, investors await corporate earnings results for the second quarter. According to FactSet, S&P 500 companies are forecast to report a 4.8% increase in second-quarter earnings per share from a year ago after a 2.1% rise in earnings in the first quarter of 2014. Only a few major companies had released earnings reports by the end of the week, making any overall trend difficult to discern at this early stage.

Let’s stay tuned for next week!

Our 10 ETFs in the Spotlight slipped for the week with none of them making a new high for the day.

Read More