Apple Fails To Impress; S&P And Dow Continue Marching Forward

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The S&P 500 and Dow both kept moving forward to new record highs today, while the Nasdaq limped to the finish line to close in the red. The S&P 500 realized its 15th record close of 2014, and the Dow posted its 6th record close of the year.

There was a folly in the Manufacturing Index released by the Institute for Supply Management that caused a slight shock in the Dow. The index reported an unexpected drop to 53.2 in May, but actually had improved to 55.4, up from 54.9. The correction shortly thereafter eased sudden concerns about the economy and the Dow climbed back up accordingly.

While the S&P and Dow kept trending upwards, things were not so fruitful for the Nasdaq today. Big names like Amazon (AMZN), Biogen (BIIB), Google (GOOG) and Tesla (TSLA) all were a drag on the index. Even Apple (AAPL), after unveiling new operating systems for their computers, phones and tablets, couldn’t impress investors enough to post gains on the day. The stock fell $4.35 to $628.65.

Meanwhile, gold prices still continues to trend downwards, dropping 0.2% to $1,243/oz. The metal has been slowly moving away from its 2014 high of almost $1,400/oz. and has not shown any apparent signs of regaining momentum.

Our 10 ETFs in the Spotlight went predominantly sideways; however, 4 of them made new highs today while 9 of them remain on the plus side YTD.

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ETFs/Mutual Funds On The Cutline – Updated Through 05/30/2014

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 362 (last week 359) 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. 82 ETFs (last week 81) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 625 (last week 591) above the line and 224 below it out of the 859 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 Bank Be Extraordinarily Aggressive?

Ulli Market Review Contact

92835431There are a series of factors that are driving the current rally in the US bond markets though the main one that has been apparent for a long time and driving the market is the incredible amount of liquidity, said Rick Reider, co-head of America’s fixed income at BlackRock Inc.

Some of the reasons include a rush to safety due to geopolitical tensions in Russia and the Fed advancing gradually with tightening, because America’s economic data points are going to improve slowly. However, the most significant reason is, and investors often tend to miss it, the yield difference between US Treasuries and German and Japanese 10-year govt. bonds. US Treasuries at about 2.5 percent look attractive compared with Germany’s 1.4 percent or Japan’s 1.6 percent. Given the amount of liquidity in the market, owning some duration is actually good, he explained.

Asked how long the relative value could persist, Rick said the dynamic currently at play is not only extraordinary, but truly historic. There is a situation where European Central Bank President Mario Draghi is going to be extraordinarily aggressive, which is going to drive into bond yield spreads; and then there is an aggressive Bank of Japan which could potentially be more aggressive going forward. As long as those stimuli are in place, Treasuries could drift higher and the yield volatility could be profound, he said.

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New ETFs On The Block: First Trust Managed Municipal Bond ETF (FMB)

Ulli Municipal ETFs Contact

137430914The ride for all sorts of long-duration bonds and bond ETFs turned bumpy in mid 2013 after the former Fed Chairman Ben Bernanke announced the central bank would begin to taper its long-running quantitative easing program towards the end of the year.

Poor fiscal health management in many municipalities made the situation worse for Munis.The situation for the almost $3.7 trillion municipal market, however, took a turn for the better this year on rising tax concerns, muted performance of equity markets and improving health of many municipal bond issuers.

First Trust, the Wheaton, Illinois-based eighth-largest US provider of exchange-traded funds, unveiled an actively managed municipal bond ETF to tap into this opportunity. The First Trust Managed Municipal ETF (FMB) seeks to generate current income that is exempt from regular federal income taxes and attempts to offer long-term capital appreciation by investing in a portfolio of primary investment grade municipal bonds while offering daily liquidity and total transparency of prices.

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05-30-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For May 30, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05292014/

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Market Commentary

Friday, May 30, 2014

EQUITIES HEADING INTO UNCHARTERED TERRITORY

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Equities had several new record highs on the week, lifting the tally to 14 new highs in the S&P 500 in 2014. For the week, all major indexes climbed as the 5-day chart above shows.  The S&P 500 rose 2.1% in May, which was its fourth consecutive monthly increase. Also, all three primary U.S. stock composites are now positive for the 2014 calendar year. So, things are looking good, at least for the time being, as we head into the summer months.

Investors tuned in today to see if the positive momentum would continue or if the weak GDP report yesterday would weigh on stocks today. Although the gross domestic product data was weaker than anticipated, the primary U.S. stock composites still managed to track through positive territory throughout the last session of the month.

Overall, economic data of recent has not been a bit hard to decipher. Personal spending fell 0.1% in April, revised GDP showed the economy contracted by 1.0% in Q1. However, the consumer confidence index rose in May and durable goods orders were up 0.8%. While data is surely mixed, the sentiment amongst investors is that the economy should (slowly but surely) continue to show solid growth moving forward.

Our 10 ETFs in the Spotlight picked up some steam; 7 of them made new highs today while 9 of them remain on the plus side YTD.

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.

In other words, none of them ever triggered their 7.5% sell stop level during this time period, which included a variety of severe market pullbacks but no move into outright bear market territory.

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) joined the party and rallied sharply ending the week as follows:

Domestic TTI: +3.15% (last Friday +2.09%)

International TTI: +4.21% (last Friday +3.01%)

Have a great 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 Adrian:

Q: Ulli: It seems that the online press has been inundating its readers with a constant barrage of market predictions along the lines of Dennis Gartman in the below piece:

http://blogs.marketwatch.com/thetell/2014/05/27/dennis-gartman-calls-for-a-stock-market-correction-including-his-are-all-wrong/

He changed his mind now several times as to what the markets might do. Others are suggesting a 20% or so correction is due later on this year. What’s your take on this?

A: Adrian: I’m reading most of these wild predictions with a sense of amusement. No one really knows and, to my way of thinking, it’s not only an exercise in futility but a total waste of time. It’s so much easier to put an investment plan in place and let the long-term trends, and their changes in direction, be your guide as to when to exit and head for the safety of the sidelines.

On the other hand, if everyone would follow this type of sensible approach, there would be nothing to write about in the financial media and some publications and TV channels might cease to exist.

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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 May 30, 2014

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05292014/

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Market Commentary

Friday, May 30, 2014

EQUITIES HEADING INTO UNCHARTERED TERRITORY

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Equities had several new record highs on the week, lifting the tally to 14 new highs in the S&P 500 in 2014. For the week, all major indexes climbed as the 5-day chart above shows.  The S&P 500 rose 2.1% in May, which was its fourth consecutive monthly increase. Also, all three primary U.S. stock composites are now positive for the 2014 calendar year. So, things are looking good, at least for the time being, as we head into the summer months.

Investors tuned in today to see if the positive momentum would continue or if the weak GDP report yesterday would weigh on stocks today. Although the gross domestic product data was weaker than anticipated, the primary U.S. stock composites still managed to track through positive territory throughout the last session of the month.

Overall, economic data of recent has not been a bit hard to decipher. Personal spending fell 0.1% in April, revised GDP showed the economy contracted by 1.0% in Q1. However, the consumer confidence index rose in May and durable goods orders were up 0.8%. While data is surely mixed, the sentiment among investors is that the economy should (slowly but surely) continue to show solid growth moving forward.

Our 10 ETFs in the Spotlight picked up some steam; 7 of them made new highs today while 9 of them remain on the plus side YTD.

Read More