Ulli... The ETF Bully

Ukraine In Turmoil, But U.S. Economy Still Looking Good

Ulli Monday, 3 March 2014, 3:56 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The crisis in Ukraine seems to have investors a bit jittery as the major indexes gave back some of last week’s gains. As escalating military tensions in Ukraine dominated news today, the better-than-expected economic reports we received did little to soften selling across the markets. The Ukraine worries brought about a market sentiment that we haven’t really seen since emerging market worries of Turkey and China more than a month ago.

In economic news, consumers spent more in January, but apparently a good portion of money spent was on utility bills because of the unusually cold winter. We also heard today that the final reading of Markit’s U.S. purchasing managers index accelerated in February and that this final reading for February was the highest level in almost four years. The report basically shows that output and new business picked up sharply. Also, U.S. manufacturers expanded at a faster pace in February and business would have been even better if not for severe winter weather, according to a survey of executives.

Of course, there was a small flight to gold today because of the Ukraine news. Gold futures surged by more than 2% on Monday, lifting prices to their highest level since late October. Gold closed last week in the red as a rise in U.S. consumer sentiment and strength in Chicago’s business barometer helped boost demand for U.S. equities.

Our 10 ETFs in the Spotlight slipped but 6 of them have now turned positive for the year.

ETFs/Mutual Funds On The Cutline – Updated Through 02/28/2014

Ulli Monday, 3 March 2014, 6:07 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 371 (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 93 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. 74 ETFs (last week 72) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 752 (last week 708) above the line and 97 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.

Please note that Mutual fund prices have not been adjusted for yearend distributions.

One Man’s Opinion: Are Technology And Healthcare Likely To Outperform The Market In 2014?

Ulli Sunday, 2 March 2014, 6:01 AM Market Review Contact

Companies actually made more money in 2013 than forecast as evidenced from Wall Street’s top bear UPS raising its 2014 earnings per share target to $117 from 115, said Gina Martin Adams, an equity strategist at Wells Fargo Securities LLC. Earnings grew at a much faster 7 percent annual rate, widening the aggregate S&P 500 base. Hence earnings growth is likely to be lower this year, she said.

Asked to explain the dismal 2.4 percent annualized growth rate in the fourth quarter after a robust 4.1 percent growth in the third quarter, Gina said the investors’ expectations went up following third quarter results even though fundamentals of the economy remained weak.

However, if investors took a broader perspective, not a lot has changed as the economy is still incrementally growing at a slightly faster pace from a year ago, she argued. Asked if equities can grow at the same pace as last year when the economy is clearly showing signs of a slow down, Gina said the markets rallied in 2013 because the economic numbers beat forecasts.

New ETFs On The Block: Ishares Enhanced International Large-Cap ETF (IEIL)

Ulli Saturday, 1 March 2014, 6:17 AM International ETFs Contact

iShares, the world’s largest issuer of exchange-traded funds, unveiled two-new actively managed ETFs that are similar to products the company launched in April 2013.

The iShares Enhanced International Large-Cap ETF (IEIL) and the iShares Enhanced International Small-Cap ETF (IEIS) are the international cousins of the iShares Enhanced US Large-Cap ETF and the iShares Enhanced US Small-Cap ETF, respectively.

The two funds seek to provide long-term risk-adjusted returns relative to broad international large-cap stocks and come at a time when global markets are looking nervous due to slowing growth in the US and China and the Federal Reserve’s dialing back of its monetary stimulus.

02-28-2014

Ulli Friday, 28 February 2014, 4:12 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, February 28, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/02/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-02272014/

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Market Commentary

Friday, February 28, 2014

WEEKLY RECAP; EEM BREAKS 50-DAY MOVING AVERAGE

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The major indexes here in the U.S. had a nice week overall as the chart above shows. We started off on a positive note with the S&P breaking its intraday record high of 1,858.71 and 7 out of 10 sectors posting gains. Energy led the pack of sector gainers on Monday (+1.5%) and for the entire of the week. We saw the market go up and down only to finish where it started on Tuesday and Wednesday.

Thursday was a record breaking day for the S&P 500 as it finally closed at a new all-time high. There was a lot of build-up in anticipation of Janet Yellen’s speech to the Federal Reserve; however, her comments did not indicate that the central bank would lower the pace of its stimulus reduction, so investors felt some relief that there were no negative surprises. On Friday, we received news that domestic GDP for Q4 2013 was 2.4%, down from an initial 3.2% estimate, but the markets took it as a non-event.

Tesla (TSLA) stole many of the headlines this week after Morgan Stanley (MS) revised their target price upwards from $153 to $320 alongside the Company’s announcement that they plan on boosting their battery production capability via the “Gigafactory.”

As you know, emerging markets have been a concern for investors since early January. However, just today the iShares MSCI Emerging Markets Index ETF (EEM) closed above its 50-day moving average, which caught the attention of more than a few. Was this a fluke? I remain skeptical regarding the ability of emerging market ETFs to perform well over the next few months, unless their long-term trend line gets broken to the upside.

Our 10 ETFs in the Spotlight held steady and 7 of them have now turned positive for the year.

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.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) improved from last week’s close and ended as follows:

Domestic TTI: +4.34% (last Friday +3.45%)

International TTI: +6.39% (last Friday +6.12%)

Have a great week.

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 Jim:

Q: Ulli: Just a word to thank you for all you continually share. Your cool head and sane approach to risk reduction make your blog a bright spot on the web. Your switch in emphasis from mutual funds to ETFs has helped many of us make the transition. The cutline rankings have been very helpful. The ten sector table is a helpful focus.

What I miss are the Trend Tracking charts you used to publish. They continue to be an important reference in your blog, and I miss seeing them. Perhaps I have missed the link to the place they are displayed. Do you still share them? A quick look at the charts provided me more sense of perspective and direction than the simple daily report of x% over or under a trend line I cannot see. Am I the only one that misses the charts?

A: Jim: Thanks for your kind words. Yes, you must have missed it; the Trend Tracking charts are the cornerstone to my methodology, and they are being published always in the weekly StatSheet, which is posted every Thursday around 6 pm PST. The link is then mailed in Friday’s update to all readers.

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https://theetfbully.com/personal-investment-management/