Not A ‘Fed Minute’ Too Soon

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The ‘Fed Minutes’ were perhaps the biggest headline and market mover today. Recent economic data has been disappointing, particularly in the job and housing markets, which has raised questions about the Fed’s future tapering plans. Some of the sluggishness appears to be due to the snowy weather across the country, but despite a weak December jobs report, the Fed’s 10 voting members unanimously decided to reduce the central bank’s bond-buying program to $65 billion in February, down from $75 billion in January. Fed officials said that as long the economic outlook doesn’t change, the Fed will likely reduce its purchases by $10 billion at each meeting. Markets moved accordingly in negative fashion.

Although the broader market was down, some prominent stocks moved higher including Zales (ZLC) which surged about 40% after Signet Jewelers (SIG) unveiled a deal to acquire the Dallas-based jewelry retailer for $21 a share. Tesla (TSLA) said it sold a record number of its Model S sedans in the Q4 2013, and that it expects to deliver even more this year. The company’s shares gained in accordance after the closing bell.

The dollar rose following the release of the minutes from the Fed; gold prices fell for a second straight day and the CBOE Volatility index, often referred to as Wall Street’s fear gauge, rose 11.75 percent. The emerging markets focus remained on rising unrest in both Ukraine and Thailand. Ukraine’s sovereign bonds and currency both tumbled as a renewed wave of violence hit the capital Kiev, adding pressure on Russia’s rouble, which hit an all-time low against the euro.

Our 10 ETFs in the Spotlight slipped a bit with the indexes, but 3 of them still remain in the green for the year.

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Nasdaq Is Streaking Again; Cold Weather Still Drawing Bulls To Gas And Oil

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks edged a bit higher today. The Dow lagged the other leading indexes, weighed down by Coca-Cola (KO) after reporting weak Q4 results; the Nasdaq, however, rose to 13-year highs amid an eighth straight session gain, which it has not experienced since July 2013.

Tesla Motors Inc (TSLA) hit an all-time high following a report Apple’s M&A chief met Tesla CEO Elon Musk last year, sparking speculation Apple (AAPL) could be interested in buying the electric car maker. Forest Laboratories (FRX) was the biggest gainer on the S&P 500 after Actavis (ACT) said it would acquire the specialty pharmaceuticals company in a cash and stock deal valued at about $25 billion.

As the bitter winter cold continues to bear down on the east coast of the U.S., natural gas and crude oil futures are performing accordingly. A new winter storm named Rex has moved through the U.S. Midwest and on Tuesday was hitting the Northeast, bringing strong winds and fresh snow, according to the latest forecast by the Weather Channel. Crude oil and natural gas futures settled higher today with crude oil for March delivery (CLH4) rising 2.1% and natural gas for March delivery (NGH14) gaining 6.5%.

Global markets also edged higher today following a fresh round of stimulus from the Bank of Japan. The Bank of Japan maintained its expansionary monetary policy by extending special loan programs to help support economic growth. All-in-all it was a good day for the markets, and I look forward to seeing what tomorrow brings.

Our 10 ETFs in the Spotlight inched higher, with XLV sprinting, and 3 of them are now in the green for the year.

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ETFs/Mutual Funds On The Cutline – Updated Through 02/14/2014

Ulli 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 357 (last week 318) 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. 70 ETFs (last week 53) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 692 (last week 603) above the line and 157 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: The Market May See A 60 Percent Decline If It Unravels

Ulli Market Review Contact

92835431In early part of October, on October 9 to be precise, the stock market made its low as predicted by Demark Analytics, just as it had done in 1929, said Thomas Demark of Demark Analytics. The market was expected to rally 12.6 percent, identical to the rally in 1929, he added.

Asked if the markets were heading for a crash similar to the one in 1929, Demark said when the market made its high on September 3 in 1929, there were 23 subsequent trading days where the Dow Jones industrial average had a short-term bottom. 23 days aligns with the low end on Monday and subsequent to that there was a four-day rally.

Then the market unraveled and went down 48 percent. The markets are at that inflection point. Everything is aligned at this point though the next 2-3 days are extremely critical. Analyzing both the minutia and the long-term, for example, if the markets close lower today and there’s a weak opening tomorrow, which is followed by weak trading, then possibly the markets are going to unravel quickly regardless of what the news are on that day, Tom noted.

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New ETFs On The Block: Vident Core US Equity Fund (VUSE)

Ulli Equity ETFs Contact

95519646Vident Financials broke into the US exchange traded funds market late last year with the launch of the Vident International Equity Fund (VIDI).  VIDI turned out to be one of the most successful launches in the history of the industry as the fund recorded more than $100 million in assets within weeks of its unveiling. In less than three months, VIDI’s assets under management have grown to nearly $600 million, showing a CAGR of about 200 percent.

Encouraged by the success of its first product, Vident Financials launched their second fund – the Vident Core US Equity Fund (VUSE). With the launch of VUSE, the Atlanta, GA-based issuer aims to build on the sterling performance of US equities last year that saw the S&P 500 logging its biggest annual gain in 16 years and the Dow Industrials in 18 years.

The new fund qualifies as a smart beta ETF and seeks to mitigate risks typical to US equities. It follows the Vident Core US Equity Index, a strategy that seeks to highlight companies with better corporate governance and higher levels of leadership. Risks associated with market cap weighted funds due to poor financial reporting and low valuations are overcome by applying principles-based investment decisions.

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02-14-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, February 14, 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-02132014/

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Market Commentary

Friday, February 14, 2014

EQUITIES STUCK IN RALLY MODE

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Another week of trading has come to a close with stocks gaining for a second straight week and the Nasdaq closing at its highest level since 2000. Let’s recap the trends and events that took place this week. Many were holding their breath to start the week in anticipation of Janet Yellen’s address to Congress. Yellen’s speech turned out to be good news for the markets, which reacted positively during Tuesday’s trading. She was confident that, even though employment rates have been weak, the Fed will stay on track to reduce their bond buying program.

Thursday brought us news that jobless claims for the week ending Feb. 8 came in slightly higher than expected, but retail sales figures missed estimates. Also on Thursday, it was revealed that Time Warner Cable (TWC) will be acquired by Comcast (CMCSA), a merge that will have an unforeseeable impact on the cable TV/Internet market. Friday’s trading closed out the week on the up-and-up as consumer sentiment beat expectations and we received some solid earnings reports from companies such as Cliffs Natural Resources (CLF) and Campbell Soup (CPB).

As earnings season draws to a close, there are still a few key firms left to report next week, however, the focus of the markets will likely shift toward macro data as earnings begin to dwindle, and next week is packed with key economic reports from around the world. Monday will see GDP numbers from Japan, though U.S. markets will be closed in observance of President’s Day. Tuesday will bring CPI results from the U.K. and Germany’s economic sentiment figures. Closing out the week will be U.S. CPI and Canada CPI, which are reported on Thursday and Friday, respectively.

Our 10 ETFs in the Spotlight joined the upward movement of the indexes and 3 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:

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.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) picked up steam and headed deeper into bullish territory.

Domestic TTI: +3.58% (last Friday +2.63%)

International TTI: +5.65% (last Friday +4.32%)

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 Kathy:

Q: Ulli: Two days ago your newsletter said you liquidated these positions but today’s charts are still showing a hold? Am I missing something?

A: Kathy: As I mentioned in the NL, I am tracking 2 different items in the 2 tables. The first one shows any trend line breaks, some of which happened, while the second one tracks the trailing sell stops.

I did sell my positions on a break below the trend line, but you can use the trailing sell stops as well. It all depends on your risk tolerance.

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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/