Ulli... The ETF Bully

Corporate Earnings Continue To Impress Investors

Ulli Monday, 21 April 2014, 3:57 PM Market Review Contact

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Another big week of corporate earnings announcements is underway and markets reacted well to positive earnings announcements from companies such as Haliburton (HAL), Netflix (NFLX) and Hasbro (HAS). The S&P 500 gained 0.4% ending the day exactly where we started on April 1st. The continued climb of the markets over the past week is refreshing, needless to say, after a volatile start to the month, when a sell-off in high-flying technology and biotechnology stocks pushed the overall market lower.

Close to a third of the companies in the S&P 500 are scheduled to report Q1 earnings this week, which will give us a better picture on the state of the economy moving forward. McDonald’s (MCD), Delta Air Lines (DEL) and Apple (AAPL) are among the 159 companies in the S&P 500 that are scheduled to report. Together, the companies represent about a third of the value of the index. Of the 87 companies in the S&P 500 that had reported results through Monday morning, 62.1 percent have topped earnings expectations, according to Thomson Reuters data.

Nokia (NOK) said on Monday it expects the sale of its handset business to Microsoft (MSFT) to be finalized on April 25, as it had received all the required regulatory approvals. The closure of the 5.4 billion euro ($7.5 billion) deal, which was agreed in September, had been delayed due to pending approvals, but earlier this month the companies won a crucial nod from Chinese regulators.

Our 10 ETFs in the Spotlight gained with 2 of them making new highs today while 9 are in the green YTD.

ETFs/Mutual Funds On The Cutline – Updated Through 04/17/2014

Ulli Monday, 21 April 2014, 5:55 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 365 (last week 344) 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. 80 ETFs (last week 76) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 652 (last week 489) above the line and 197 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 S&P 500 Finish Above 2,000 By Year End?

Ulli Sunday, 20 April 2014, 6:00 AM Market Review Contact

The recent decline in the stock markets can be characterized as an internal correction as broad averages like the S&P 500 didn’t correct much, said Ed Yardeni, President and Chief Investment Strategist at Yardeni Research.

True, NASDAQ had a bigger correction, but if one focuses on the sectors that witnessed sizeable corrections such as biotech and internet stocks, they were fairly highly valued with high P/E ratios. And despite the correction, they are still expensive.

If investors look at growth stocks, the stocks that excite them about the future, there really aren’t that many that might excite them. So they (biotech and internet stocks) tend to attract a lot of investors who are looking to make a killing, which makes them extremely volatile. It’s better to focus on the big-cap companies rather than just technology, industrials and health-care, he noted.

New ETFs On The Block: ETRACS Monthly Reset 2X Leveraged S&P 500 Total Return ETF (SPLX)

Ulli Saturday, 19 April 2014, 6:15 AM Leveraged ETFs Contact

ETRACS, the exchange traded notes (ETN) issuing arm of Swiss banking major UBS AG, has launched a leveraged S&P tracking ETN that resets its holdings every month.

The ETRACS Monthly Reset 2X Leveraged S&P 500 Total Return ETN (SPLX) will reflect the monthly compounded 2X, or 200 percent leveraged performance of the S&P 500 Total Return Index. The S&P 500 Total Return Index is one of the leading benchmarks for measuring the performance of large cap US stocks.

If the US economy continues to grow at current pace, the Fed will most likely wind up its asset purchase program by the end of this year. The European Central Bank and the Bank of Japan, however, are likely to continue with their ultra-loose monetary policies well into 2016, which in turn is likely to push up asset prices globally. Many investors believe US equities are likely to give decent returns following last year’s solid performance.

04-18-2014

Ulli Friday, 18 April 2014, 3:32 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For April 18, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/04/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-04172014/

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Market Commentary

Friday, April 18, 2014

AFTER A SLOW START, INDEXES PICK UP MOMENTUM

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

During this Holiday shortened week, the major indexes managed a strong comeback with the S&P 500 gaining 2.7%, which was its best showing since July last year; this puts us only 7 points away from where we started the month.

The 30-day chart above shows that it’s been a roller coaster ride with the S&P at one point threatening to break above the 1,900 milestone only to succumb to severe selling pressures, but the bulls were finally able to gain the upper hand again over the past 4 trading days.

The major trends in the market place, as measured by our Trend Tracking Indexes (TTIs), remain intact as you can see in section 3 below.

As I pointed out yesterday, our 10 ETFs in the Spotlight went sideways with one of them still remaining below its long term trend line; however, 1 made a new high today while 9 are now in the green 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, with the exception of XLY, 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) recovered from last Friday and closed higher:

Domestic TTI: +2.26% (last Friday +1.17%)

International TTI: +3.20% (last Friday +1.80%)

Have a great Easter 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 Tom:

Q: Ulli: I’m a fan of low-cost Vanguard ETFs. Which ones would be equivalent to the 10 you track? Do the 10 you track have better performance or liquidity to justify paying a higher fee?

A: Tom: I don’t know which ones are the equivalents; you will have to do that work yourself. The 10 I have listed were selected based on the criteria I mentioned. The fees with these high volume ETFs are very low to begin with, so I don’t concern myself with whether Vanguard ETFs are a fraction lower or not. My idea is to use a sound methodology and not try to pick up nickels and dimes…

Also, you should look not only at fees but also the bid/ask spread, which is where you really can pay more in illiquid ETFs. SPY, for example, is the largest and most liquid ETF in the universe, and I doubt the Vanguard equivalent can come close to this liquidity and low bid/ask spread.

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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/