Ulli... The ETF Bully

Markets Start Week With A Bang

Ulli Monday, 24 February 2014, 4:03 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The U.S. markets started the week out with a bang. The S&P 500 (SPX) hit an all-time intraday high of nearly 1,859.00 and finishing up 0.6%. Gains were broad across the board, with nine of the ten S&P 500 sectors up on the day. The market seems to be gaining momentum as it follows in suit with the big winners of 2013 (Google, Netflix, Tesla, Facebook, Priceline). Also, sentiment has been bullishly responding to the abundance of M&A activity we have seen thus far. To add to the list, today we heard RF Micro Devices Inc agreed to buy TriQuint Semiconductor Inc for about $1.6 billion, and Men’s Wearhouse Inc raised its cash tender offer for rival men’s clothing retailer Jos. A. Bank Clothiers Inc to $63.50 per share from $57.50.

Chesapeake Energy (CHK), the second-largest natural gas producer in the U.S., was a big gainer today. The stock rose 2.63% after the company announced it is considering selling or spinning off its oilfield services unit, Chesapeake Oilfield Services.

The average U.S. price for a gallon of regular gasoline at the pump has climbed for 17 days in a row. This marks a total increase of about 15 cents a gallon and AAA predicts that prices are likely to continue to rise in the weeks ahead as we head towards refinery maintenance season. For your information, this is the largest price increase since mid-July and the longest streak of daily increases since last May.

As the week progresses, I am looking ahead to Thursday when Federal Reserve Chair Janet Yellen will speak to the Senate Banking Committee in a semi-annual testimony about monetary policy. Yellen has been a champion of the U.S. economy thus far in 2014, stating on numerous occasions that emerging market volatility is not a big risk to the U.S. and that the U.S. should continue reducing its bond buying program.

Our 10 ETFs in the Spotlight all showed gains and now 5 of them have turned positive for the year.

ETFs/Mutual Funds On The Cutline – Updated Through 02/21/2014

Ulli Monday, 24 February 2014, 6:10 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 359 (last week 357) 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. 72 ETFs (last week 70) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 708 (last week 692) above the line and 141 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: Should The European Central Bank Have Done More To Boost Economies?

Ulli Sunday, 23 February 2014, 6:03 AM Market Review Contact

The first eurozone composite Purchasing Manager’s Index reading for February came in at 52.7, falling short of the 53.1 that economists had called for. However, the services component of the index has improved by-and-large in most countries over the past few months and the latest reading (51.7 versus forecast of 51.9) is consistent with that, said Gilles Moec, European co-Chief Economist at Deutsche Bank AG.

The services sector improved faster because fiscal austerity is probably not as tough now as it was 2-3 years ago. There has been some normalization of domestic demand, which is reflecting in the services data. On the manufacturing front, things are a little more difficult though because it depends a lot on the type of traction available outside Europe.

Investors could be tempted to read the small dip in German manufacturing PMI as an indication of what’s going on in China (Chinese manufacturing PMI slipped deeper in the contractionary region for the second straight month in February). However, prudence is required since the relationship between German and Chinese manufacturing PMI is not linear though it’s a possibility.

New ETFs On The Block: Wisdomtree’s Bloomberg Floating Rate Treasury Fund (USFR)

Ulli Saturday, 22 February 2014, 6:03 AM Income ETFs Contact

WisdomTree, the New York-based fifth largest provider of exchange-traded funds in the US, unveiled the WisdomTree Bloomberg Floating Rate Treasury Fund (USFR) recently to tap into the growing demand for floating rate debt.

As historically low interest rates start to normalize, bond prices – particularly the longer duration debt will start to slide, and thus the demand for shorter duration floating rate debt to mitigate interest rate risk.

The new fund provides exposure in floating rate notes, or FRNs, and pays floating coupons quarterly. The variable interest rate will be reset every week and is calculated by adding a predetermined spread over a short-term interest rate, in this case yield on the most recent 13-week Treasury bill auction. This is the US govt’s first FRN offering and the first time since 1997 the US Treasury debuted a new security for investors.

02-21-2014

Ulli Friday, 21 February 2014, 4:03 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, February 21, 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-02202014/

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Market Commentary

Friday, February 21, 2014

WEEK IN REVIEW

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Friday ended the week on a bit of a sour note given that markets had performed relatively well for the last few days. Today, Priceline (PCLN) gained 2.5% and Intuit (INTU) was up 4.6% after beating earnings estimates. Amazon.com (AMZN) was slightly lower after reports it will list brands such as Ralph Lauren.

A lot of investor news this week seemed to center on the major M&A deals that were announced. Last week, Comcast (CMCSA) said it’s acquiring Time Warner Cable (TWC). Later we heard that Apple’s (AAPL) M&A people were talking with Tesla (TSLA). Then came the blockbuster deal: Facebook (FB) is buying WhatsApp for $16.4 billion.

Perhaps the most disturbing of these deals is the Time Warner-Comcast deal. Many are worried that this may be too large a consolidation of entities that play a major role in not only how we view content, but also what content we view.

International stocks were higher after the prior day’s slump as the Bank of Japan’s January meeting minutes indicated that its aggressive stimulus could persist for more than the market’s expectation of two years. The USD fell against the euro on Friday after weak US housing data stoked concerns about the American economy, but notched its first week of broad gains against a basket of major currencies in three weeks.

Our 10 ETFs in the Spotlight held steady 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:

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) meandered sideways and closed only slightly changed from the prior week.

Domestic TTI: +3.45% (last Friday +3.58%)

International TTI: +6.12% (last Friday +5.65%)

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/