One Man’s Opinion: Will The European Central Bank Be Forced Into QE Next Year?

Ulli Market Review Contact

92835431The European Central Bank is likely to include in their Stress Test the money that commercial banks have raised and the fines they have incurred, said Erik Britton, director at Fathom Consulting.

The eurozone final inflation reading for June came in at 0.5 percent, matching an initial estimate. Asked if investors should take heart since price levels are not falling, Erik answered in negative. The issue in Europe is a highly indebted economy. The peripheral countries, including Italy, are particularly highly indebted.

The trouble with debt is that when inflation falls, it becomes a toxic mix. It turns out that, in Italy for example, an inflation rate of sub 1 percent is good enough for the economy to be on an unsustainable path. Italy’s inflation has been trending downwards for the last couple of years along with the rest of eurozone and that process is likely to continue as the economy is in a recessionary environment, he noted.

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New ETFs On The Block: iShares Currency Hedged And REIT ETFs (HEZU, REET)

Ulli International ETFs Contact

156288184BlackRock’s iShares, the world’s largest issuer of exchange traded funds, added two more funds to its tally recently to expand its lineup on investment themes that found favor with investors this year.

While the iShares Currency Hedged MSCI EMU ETF (HEZU) is a European equity-play that has a currency-hedge streak, the iShares Global REIT ETF (REET) is a global real-estate equity play with exposure in developed and emerging markets.

Following the Fed’s taper announcement last year, many currencies across the world witnessed heightened volatility on the back of heavy dollar outflow from international markets. The slide stoked demand for products that offered protection against currency fluctuations, bringing currency-hedged funds under the spotlight.

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07-18-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For July 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/2014/07/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-07172014/

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Market Commentary

Friday, July 18, 2014

MARKETS CLOSE OUT A TUMULTUOUS WEEK ABOVE WATER

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets were up and down this week, reacting to a range of factors. Solid earnings results from many large U.S. companies, as well as better-than-expected U.S. manufacturing readings and upbeat GDP suggesting the Chinese economy is stabilizing all helped support stocks.

Grabbing much of the attention, however, were geopolitical concerns – including news of the downed Malaysia Airlines passenger jet near the Russia-Ukraine border and the Israeli ground invasion into the Gaza Strip – which dragged markets lower mid-week, as the 5-day chart above shows.

In M&A news, we heard today that U.S. drug maker AbbVie Inc (ABBV) bought Dublin-based Shire Plc (SHPG) in a 32 billion pound ($54.7 billion) deal. The merged group will also have more firepower for acquisitions, particularly to bolster the rare disease business, the foundations of which were built on acquisitions by Shire.

In the week to come, international conflicts will certainly be watched closely for developments, while a minimum amount of economic data reports will direct the market’s attention to a busy week for corporate earnings announcements. Inflation data may grab some headlines on Tuesday with the release of the consumer price index for June.

Our 10 ETFs in the Spotlight went predominantly sideways 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) changed only slightly from last week’s close:

Domestic TTI: +2.90% (last Friday +3.05%)

International TTI: +3.35% (last Friday +3.05%)

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 Tarantola:

Q: Ulli: The performance of the ETFs in the Spotlight is impressive. Do you have any suggestion on how some or all of them might be included in a portfolio? Or could they form a portfolio in themselves?

A: Tarentola: I can’t give direct advice, since I don’t know your circumstances. You should make your selections based on your risk tolerance. Sure, you could use all of them, if you have a larger portfolio or just some of them.

As a general observation, most investors diversify too much. For example, for a $500k portfolio, I have used as few as 4 ETFs. Whatever your mode of operation, be sure to use my recommended sell stop discipline.

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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 18, 2014

Ulli ETF Tracker 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-07172014/

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Market Commentary

Friday, July 18, 2014

MARKETS CLOSE OUT A TUMULTUOUS WEEK ABOVE WATER

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets were up and down this week, reacting to a range of factors. Solid earnings results from many large U.S. companies, as well as better-than-expected U.S. manufacturing readings and upbeat GDP suggesting the Chinese economy is stabilizing all helped support stocks.

Grabbing much of the attention, however, were geopolitical concerns – including news of the downed Malaysia Airlines passenger jet near the Russia-Ukraine border and the Israeli ground invasion into the Gaza Strip – which dragged markets lower mid-week, as the 5-day chart above shows.

In M&A news, we heard today that U.S. drug maker AbbVie Inc (ABBV) bought Dublin-based Shire Plc (SHPG) in a 32 billion pound ($54.7 billion) deal. The merged group will also have more firepower for acquisitions, particularly to bolster the rare disease business, the foundations of which were built on acquisitions by Shire.

In the week to come, international conflicts will certainly be watched closely for developments, while a minimum amount of economic data reports will direct the market’s attention to a busy week for corporate earnings announcements. Inflation data may grab some headlines on Tuesday with the release of the consumer price index for June.

Our 10 ETFs in the Spotlight went predominantly sideways with none of them making a new high for the day.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 07/17/2014

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, July 17, 2014

Table of Content082312

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our TTI (green line in above chart) is positioned above its long term trend line (red) by +2.46%.

To avoid a potential whip-saw, a Sell signal to move out of all domestic equity positions will be generated once we have clearly pierced the red line to the downside. Be sure to tune in for the latest updates.

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Downed Malaysian Passenger Jet Shakes Markets

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks seemed to have been spooked today by the news of the Malaysian passenger jet that went down in Ukraine near the Russian border. Additional news that Israel had launched a ground offensive into the Gaza Strip only added fuel to the fire, so to speak. The major indexes stumbled, as the chart above shows, with money pouring into U.S. government bonds.

The yield on the 10-year Treasury note fell to its lowest level since May. Gold and oil prices rose. Airlines took a hit, too. The NYSE ARCA Airline index was down 2.7%. Shares of Boeing (BA), whose aircraft was being flown when the Malaysia Airlines plane went down, fell 1.2%.

Despite today’s decline, stocks remain near record territory. The Dow closed at a record high on Wednesday, its second this month, and the S&P 500 is hovering near its most recent all-time high of 1,985.44 set on July 3. These facts may have encouraged investors to sell some of their stock holdings Thursday midst the chaos.

Even with growing geopolitical uncertainty, the market has remained focused on company earnings, which have been mostly favorable so far. Let’s stay tuned for (hopefully) more positive corporate earnings to come.

Our 10 ETFs in the Spotlight stumbled with the indexes; no new highs were made.

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