ETF/No Load Fund Tracker Newsletter For Friday, December 6, 2013

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2013/12/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-12052013/

————————————————————

Market Commentary

Friday, December 6, 2013

MARKETS BACK ON TOP AFTER A SHAKY WEEK

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

It was just one day, yet there was ample meaning wrapped up in the connection that the 10-yr Treasury note (+3/32, 2.87%) and the stock market both pushed higher. Gold prices and the US Dollar Index, meanwhile, were little changed. This is a positive end to a somewhat sour week that saw the S&P and Dow both swim in the red daily.

The headlines for the employment data this week were reassuring on just about every front. Nonfarm payrolls increased by 203,000 (Briefing.com consensus 188,000) and were revised up for September (to 175,000 from 163,000) and down slightly for October (to 200,000 from 204,000). Nonfarm private payrolls increased by 196,000 (Briefing.com consensus 200,000). The unemployment rate fell to 7.0% from 7.3%

Bitcoin’s value took a tumble this week after the People’s Bank of China issued an official statement about its stance on the digital coin, knocking the cryptocurrency’s value down into the $800s after lofty $1,200 highs. China has been largely responsible for Bitcoin’s dramatic 500% rise in value over the last month, with yuan dominating the trading markets, according to the Genesis Block. China’s government evidently felt that the cryptocoin was getting too hot to ignore.

Our ETFs in the spotlight headed back up to close near their yearly highs:

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).

Now let’s look at the MaxDD% column and review the ETF with the lowest drawdown as an example. As you can see, that would be XLY with the lowest MaxDD% number of -5.73%, which occurred on 11/15/2012.

The recent sell off in the month of June did not affect XLY at all as its “worst” MaxDD% of -5.73% still stands since the November 2012 sell off.

A quick glance at the last column showing the date of occurrences confirms that five of these ETFs had their worst drawdown in November 2012, while the other five were affected by the June 2013 swoon, however, none of them dipped below their -7.5% sell stop.

Year to date, here’s how the above candidates have fared so far:

We are almost back to last week’s highs as the selloff was minor and did not affect the values in the all important “Off High” column by a significant amount.

3. Domestic Trend Tracking Indexes (TTIs)

Trend wise, our Trend Tracking Indexes (TTIs) slipped week over week despite today’s sharp rebound. They remain above their long term trend lines by the following percentages:

Domestic TTI: +4.34% (last Friday +5.07%)

International TTI: +5.96% (last Friday +7.93%)

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.

————————————————————-

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 Mike:

Q: Ulli: What is the difference between the “DD%” and the “trailing stop loss %”?

A: Mike: The DD% refers to the percentage a fund has come off its high. This is the high a fund has made since you purchased it, and it serves as a basis for calculating the trailing sell stop. For example, let’s assume you bought an ETF for $10 and it subsequently moves as follows for the next trading days: 10.05, 9.98, 10.15, 10.21, 10.30, 10.19, 10.14…

The high it has made in this data series is 10.30, which becomes the basis for calculating your 7.5% trailing sell stop, which would be at 9.52. If prices sink through 9.52, without taking out the high of 10.30 first, that would be your trigger point to exit the position.

In my weekly StatSheet listings, you can see the percentage a fund has come off its high in the DD% column. Once that number exceeds -7.5%, it means a sell signal for that fund has been generated. To be clear, if you bought this fund at a different time than shown in the StatSheet, you need to track your own highs (no pun intended) as mentioned above.

Hope this clarifies it.

———————————————————-

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/

———————————————————

Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/

The ETF/No Load Fund Tracker

Monthly Review—November 30, 2013

US Equities Finish November On A High; Europe Sputters

US equities continued their bull run in November with all the three major indexes finishing higher for the month. The Dow Jones Industrial Average and the S&P 500 remained comfortably above their milestone levels of 16,000 and 1,800, respectively, and marked their eighth straight week of advances.

The Dow finished at 16,086.41, up 3.5 percent for November. The S&P 500 closed out at 1,805.81, higher 2.8 percent for the month.

The tech-heavy NASDAQ Composite index climbed 3.6 percent for the month to finish at 4,059.89.

The FOMC minutes from the Fed’s October meeting suggested the central bank could slow the pace of its asset purchases if the labor market showed persistent improvement, causing small hiccups in equities. The markets, however, showed remarkable resilience and recovered quickly, possibly realizing the Fed minutes really didn’t tell anything that the markets didn’t already know. Also, traders seemed to warming up to the Fed’s articulation that a tapering isn’t a tightening, and the Fed funds rate is apt to stay near the zero mark even well after the central bank ends its monthly bond buying program.

Another critical development related to the Fed for the month was the near certainty of Janet Yellen’s confirmation as the next Fed chairman following her appearance before the Senate Banking Committee. The change in leadership is likely to be smooth next year as Fed chairman Ben Bernanke and Yellen seem to be on the same page about the health of the economy.

On the economic data front, consumer sentiment and labor market readings indicated a slow but steady economic recovery. The final November reading of the consumer sentiment index came in at 75.1, bettering October’s reading of 73.2 even as consumers remained skeptical about the congressional deadline for reaching a settlement on the federal budget and debt ceiling.

Separately, a report by the Labor Department showed jobless claims fell by 10,000 to 316,000 in the week ended Nov 23. Economists had called for a rise to 330,000 on a seasonally adjusted basis.

Orders for durable goods fell by 2 percent in October, suggesting weakness in business investments, the Commerce Department said on Nov 27. The lack of bookings for commercial and military jets in the more volatile transportation sector hit October readings.

Orders for durable goods have increased by 4.8 percent in the first 10-months of 2013 while core orders have grown by a lackluster 4.1 percent, the October report said.

Among other economic developments, wholesale inventories ticked up 0.4 percent in September after an upwardly revised 0.8 percent gain in August.

Export prices, excluding agriculture, fell 0.4 percent in October following a 0.3 percent gain in the previous month. Import prices remained unchanged following September’s uptick of 0.2 percent.

Across the Atlantic, European stocks tracked their US counterparts. The Stoxx Europe 600 index closed at 325.16, up 0.9 percent for the month. The pan-European index is up 16.3 percent year to date.

The German DAX 30 index led the region’s advance in November, adding 4.1 percent for the month. Both the French CAC 40 and British FTSE 100 index shed 1.2 percent in November.

Our major holdings meandered with the markets with XLY taking the lead followed by SPY. DVY dragged as it gained only slightly while XLP slowed down from the torrid pace it set in October. Take a look at the chart:

Our main directional indicator, the Domestic Trend Tracking Index (TTI) kept pace with the major indexes and remains solidly on the bullish side of the trend line, as the chart shows:

November turned out to be another good month for those of us invested in equities. It almost seems to be a surreal market environment, which is not surprising given the fact the Fed has determined market direction ever since its introduction of the various stimulus programs.

Surely, there will have to be some kind of pullback in the near future if for other reason than profit taking and/or some sense of reality creeping in. This is also the time when you will hear latest proclamations and estimates as to how high these markets will go next year. Goldman Sachs was the first one in stating that the S&P 500 will fall by 10% over the next 12 months before rallying to the 1,900 level by year end 2014. Then it’s on to 2,100 by the end of 2015 and 2,200 by the end of 2016.

Of course, this is all guesswork and it behooves you to pay no attention. We have our trailing sell stops indentified and will execute them when necessary in accordance with our exit strategy.