Ulli... The ETF Bully

A Mundane Monday Kicks Off The Week

Ulli Monday, 23 June 2014, 4:30 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

It was too tough for the markets to continue their record breaking trend this Monday, even though we received some positive data that showed an improving housing market. The S&P 500 dropped a tad and the Dow slid slightly. Only the Nasdaq finished the day in positive territory, squeezing out a 0.02% gain.

The main market moving activity today centered on corporate M&A news. The tech lovers out there heard today that Oracle (ORCL), the database and software giant, will buy MICROS Systems (MCRS) for $5.3 billion. We also received word today that GE made notable progress in their $17 bil quest to acquire French infrastructure giant Alstom (ALST).

Perhaps more interesting to those focused on the economy were the existing home sales numbers that came in today. A report was issued this morning that showed existing home sales rose for the second straight month in May. Existing home sales are up 4.9%, which is the best gain since mid-2011. Also, we heard that activity in China’s manufacturing sector in May rose to the highest level since December.

All of these are positive signs that the domestic and global economies are headed in the right direction. But, we all know how investor sentiment can sway from one day to the next regardless of positive economic numbers.

Our 10 ETFs in the Spotlight stayed about even with 1 of them making new highs today; 9 of them are still remaining on the plus side YTD.

ETFs/Mutual Funds On The Cutline – Updated Through 06/20/2014

Ulli Monday, 23 June 2014, 6:11 AM 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 392 (last week 376) 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. 90 ETFs (last week 86) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 788 (last week 749) above the line and 62 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 Federal Reserve Keep Rates Low To Boost Consumption?

Ulli Sunday, 22 June 2014, 6:00 AM Market Review Contact

Following the Fed’s two-day monetary policy meeting this week, Chairwoman Janet Yellen said the central bank is going to stay accommodative for a long time after it ended its monthly bond-buying program this year, reassuring markets a rate hike is not likely any time soon, said Vincent Reinhart, chief US economist at Morgan Stanley.

Asked if Morgan Stanley agrees with Fed vice-chair Stanley Fischer, New York Fed chief William Dudley etc that the US central bank should push ahead with current policies and not change course, Vince said the Fed is going to keep rates low for a very long time. It’s conventional macro wisdom. There’s still resource slack in the economy; inflation is picking up, but it’s still below the Fed’s target of 2 percent. So, policymakers have still got some room to run, he noted.

Noted economists like Milton Friedman, Ben Bernanke and Richard Timberlake have all said central banks are always behind the curve. Asked if Janet Yellen fell short of expectations this week, Vince said policy rate in every country is asymmetric. It goes up a lot more slowly than it goes down because policy tightening is done in a planned fashion.

New ETFs On The Block: SPDR Euro STOXX Small Cap ETF (SMEZ)

Ulli Saturday, 21 June 2014, 5:56 AM Europe, Small Cap ETFs Contact

Europe is expected to witness stronger credit flow in the real economy after the European Central Bank cut its key interest rates this month. Investors are optimistic EU countries will recover from the prolonged recession that started in 2008 and stave off deflation successfully after the ECB’s intervention.

As the business cycle improves, European equities, particularly small cap stocks, are expected to outperform other asset classes since they tend to be highly correlated to local economies.

State Street Global Advisers, the asset management arm behind the SPDR brand of exchange-traded funds, has unveiled a Europe-focused ETF that targets small companies across Europe. The newly launched SPDR Euro STOXX Small Cap ETF (SMEZ) tracks the Euro STOXX Small Index – a gauge consisting of small capitalization companies domiciled in countries within Europe that have adopted the euro as their currency (There are 28 countries in the European Union, but only 18 use the euro).

06-20-2014

Ulli Friday, 20 June 2014, 3:49 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For June 20, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/06/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-06192014/

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Market Commentary

Friday, June 20, 2014

STOCKS ON PATH OF RECORD BREAKING TRAIL

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks nudged deeper into record territory today, rounding out a solid week of gains for the market. For the week, the three major U.S. stock indexes rose 1 percent respectively. The Dow is now within 53 points of 17,000 while the Standard & Poor’s 500 is just shy of 2,000 after rising 6 percent this year.

As we all know, M&A deals have been a big market mover this year. The value of corporate deals has surged 62 percent to $798 billion this year, from $494 billion a year ago, even though the number of acquisitions is about 3 percent lower than last year, according to Dealogic. Earlier this week, we saw Tyson Foods (TYS) finally win the bidding war to buy Hillshire (HSH) for $8.6 billion on Monday. The company ended up paying $63 a share for the food company about two weeks after rival poultry producer Pilgrim’s Pride (PPC) made an initial bid of $45 a share.

The economy fared pretty well this week, and the stock market reacted positively to the Federal Reserve’s announcement on Wednesday, in which the Fed noted that “growth in economic activity has rebounded in recent months,” supporting the case that the steady reduction in asset purchases is indicative of the Fed’s belief that the economy is on stable footing. The Fed’s commentary seemed consistent with general sentiment of a modestly growing economy, a slowly improving labor market, and moderate inflation.

Our 10 ETFs in the Spotlight gained for the week with 4 of them making new highs today; 9 of them are remaining 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:

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:

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 bulls and headed higher closing the week as follows:

Domestic TTI: +3.68% (last Friday +3.36%)

International TTI: +4.66% (last Friday +4.52%)

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 Roslyn:

Q: Ulli: This is in regards to your 10 ETFs in the spotlight. I noticed that XLY has been lagging all year and merely bouncing around its long-term trend line without making any headway. Are you planning to replace this laggard at some time?

A: Roslyn: Yes, I will reevaluate all 10 ETFs at some point, probably the end of the year and replace them with those that fall within the stated guidelines of having a low MaxDD percentage. In the meantime, stick with those that are performing well or make your selections from Thursday’s StatSheet.

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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/