Ulli... The ETF Bully

Halfway Through The Year The S&P Is Up 6%

Ulli Monday, 30 June 2014, 4:04 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Both the Dow and S&P 500 lost ground slightly after flirting with record highs previously. We are now officially halfway through the trading year and the S&P 500 is up 6%, logging 22 record highs along the way. Over the past two months stocks have resumed their upward trajectory after getting off to their worst start in five years in the first quarter.

Utility stocks also did well. The sector rose 0.8%, making it the biggest gainer of the 10 industry sectors that make up the S&P 500 industry. The utilities sector has done very well overall this year, climbing 16.4% thus far as bond yields have fallen.

American Apparel (APP) dropped 6% after the company announced plans to adopt a shareholder rights plan in an effort to prevented ousted chairman (and founder) Dov Charney from seizing control. The sell-off follows a surge of nearly 30% on Friday.

General Motor (GM) was among the day’s losers. Trading in the auto titan’s stock was briefly suspended in the afternoon after the company announced that it was recalling at least 7.6 million more vehicles dating back to 1997 to fix faulty ignition switches.

Today’s aimless meandering on the last day of the month proved to be a non-event for our ETFs in the Spotlight, although 2 of them managed to make new highs.

ETFs/Mutual Funds On The Cutline – Updated Through 06/27/2014

Ulli Monday, 30 June 2014, 6:04 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 394 (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. 92 ETFs (last week 90) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 786 (last week 788) above the line and 64 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 Raise Rates Even If Wages Don’t Pick Up?

Ulli Sunday, 29 June 2014, 6:16 AM Market Review Contact

The US Fed must re-calibrate their estimates after the disappointing first quarter gross domestic product (GDP) reading as the first six months of 2014 is likely to be flat despite a strong rebound in the second quarter, said Ellen Zentner, Senior US economist at Morgan Stanley. Although the data going into the second half is looking well enough for the Fed to feel optimistic, it’s getting cloudier with prices going up and wages remaining stagnant, she added.

Asked if the Fed is out of sync with the markets, as all leading financial institutions have revised their growth estimates downwards for the year following the release of the first quarter GDP reading on June 19, Ellen said answered in affirmative. Despite the Fed drastically marking down the growth forecast at its June FOMC meeting, it still remains too optimistic for 2014. The US central bank is also overestimating growth for 2015 and 2016, because supposedly the economy will be moving into a rising interest rate environment by then, she observed.

Asked if markets had already factored in the first-quarter reading before Thursday’s official release, thereby removing uncertainties, Ellen answered in affirmative. However, the question now remains what kind of growth rate investors are settling for beyond the second quarter.

New ETFs On The Block: iShares Core Dividend Growth ETF (DGRO)

Ulli Saturday, 28 June 2014, 6:13 AM Dividend ETFs Contact

iShares, BlackRock’s exchange traded funds unit, recently expanded its fairly-successful core suite of ETFs to help long-term investors keep more of what they earn. The world’s largest issuer of ETFs added 10 new funds to its Core suite of products to take its ‘broad and cheap’ approach one step further and added investment strategies such as value, growth and dividends to the mix.

One of those new funds, the iShares Core Dividend Growth ETF (DGRO), will compete in an already crowded income-seeking segment that is also gaining popularity because it focuses on dividend growth.

The investment strategy of DGRO is simple, yet powerful; it has a dividend increase streak requirement that is used to screen potential constituents from the universe of dividend paying stocks. This strategy implies companies that continually increase their dividend payouts will ensure bigger long term returns.

06-27-2014

Ulli Friday, 27 June 2014, 4:11 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For June 27, 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-06262014/

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Market Commentary

Friday, June 27, 2014

RIDING THE ROLLER COASTER

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Today’s reversal from an early sell off pretty much resembled the activity of the past 5 trading days as the chart above shows. While we did not recover all of the losses, the S&P 500 ended within 2 points of where it had closed last Friday.

Helping today’s rebound was the end-of-the quarter re-balancing of portfolios by institutions with the main beneficiary being the Nasdaq, which got pushed above the unchanged line. For the week, this index outperformed the S&P and Dow by gaining 0.7%.

The only economic data point for the day was the release of the consumer sentiment, which rose to 82.5 in June from 81.9 in May. That does not mean all is well for the overburdened consumer as retail, especially discretionary, which is represented in one of our 10 Spotlight ETFs (XLY), has been lagging all year and is not showing any signs of a recovery.

Some of our 10 ETFs in the Spotlight gained for the week; no new highs were made today and all of them 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, 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) were mixed with both of them retreating slightly:

Domestic TTI: +3.63% (last Friday +3.68%)

International TTI: +3.92% (last Friday +4.66%)

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 David:

Q: Ulli: Do your performance figures for ETF’s in the Spotlight assume reinvestment of cash dividends? Either way, how do you adjust performance figures to accurately reflect the gain?

A: David: For simplicity sake, I use dividend adjusted prices for the basis as the YTD table shows. Therefore, dividends are not reinvested, and the performance displayed represents the change in prices only for the period shown.

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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/