Uncertainty Hurts Stock Index ETFs

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

U.S. equity markets finished near their lows in a volatile session following a four day rally in the Standard & Poor’s 500 Index, as yesterday’s optimism that a deal among U.S. lawmakers was close seemed to slip away in the wake of continued bickering among the political parties that have stalled the talks.

After the market closed, futures indicated continued pressure after Fitch placed the United States’ AAA rating on rating watch negative, citing the debt ceiling gridlock.

Markets displayed modest losses at the open, but were able to turn positive by late afternoon. The rebound was based on optimism associated with the budget jawboning in Washington. However, selling pressure intensified during the final 90 minutes of the session amid indication that the Senate has halted its negotiations pending the outcome of the House vote.

Read More

Stocks Bounce Higher After Shaky Start

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

After beginning the day lower on the failure of U.S. lawmakers to come to a debt ceiling agreement to avoid a potential default, stocks ended a volatile session with modest gains to finish higher as bits of news about potential progress came throughout the day. Volume was lighter than usual due to the closure of U.S. bond markets for Columbus Day.

The domestic economic calendar was also empty, while several markets overseas were closed for holidays. Stocks slumped at the open after the weekend ended without any concrete progress in Washington. Despite the opening weakness, dip-buyers were quick to step in, drawing encouragement from late-morning reports indicating a bipartisan meeting was scheduled to take place at the White House.

The rebound continued into the afternoon with upbeat quotes from lawmakers providing additional support. A brief slip ensued during the final 90 minutes of the session when the White House meeting was postponed in order to allow more time for talks. Strikingly, the market did not appear too concerned with the cancellation as the major averages ended the session on their highs.

Read More

ETFs/Mutual Funds On The Cutline – Updated Through 10/11/2013

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 327 (last week 321) 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. 69 ETFs (last week 66) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 800 (last week 795) above the line and 59 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.

One Man’s Opinion: Is The Economy Ready For A Taper?

Ulli Market Review Contact

92835431The economy has not improved enough for tapering to begin between now and the end of the year thinks Lindsey Piegza, chief economist at Sterne Agee & Leach and a member of the National Association for Business Economics. The uneven data is really the underlying reason why Fed officials remained consistent in their bond purchase program.

The economy is yet to see a steady improvement that Fed officials want to see in order to warrant a rollback in bond purchases. A “steady” improvement is required because there’s only one employment report due between now and the next FOMC meeting, i.e. one data point before the govternment eventually comes back to full running capacity. And one data point doesn’t make a trend nor does it imply a steady improvement even if an outsized (jobs) report is published, she argued.

Asked to explain the recent revelation that there was a lengthy policy debate among the Fed officials over whether the economy had improved enough to begin tapering and that several members said the decision to hold off was “a relatively close call,” Lindsey said she would have expected a lot of conversation given that Fed officials have been increasingly vocal with a divergence of opinions.

Read More

New ETFs On The Block: RevenueShares Ultra Dividend Fund (RDIV)

Ulli Dividend ETFs Contact

105487691With the Federal Reserve deciding to hold off its much-anticipated taper last month, many market participants now believe that record low interest rates are likely to continue for a bit longer than previously thought, suggesting dividend funds may be a better option in the short and medium haul.

Though the dividend-income space became fairly crowded after a number of providers launched new dividend ETFs over the past few month, RevenueShares created a new income-rich option with the launch of the Ultra Dividend Fund (RDIV) in an attempt to replace low fixed-income yields with high dividend paying equities.

RevenueShares is the first-to-market a “revenue-weighted” dividend ETF, a strategy that looks to give investors a way to target income-producing equities in the US market by focusing on weighting by revenue rather than market capitalization. RDIV achieves this tracking the Ultra Dividend Index, a combination of dividend and revenue-weighted securities from the benchmark S&P 900 index.

Read More

10-11-2013

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, October 11, 2013

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2013/10/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-10102013/

————————————————————

Market Commentary

Friday, October 11, 2013

TRADERS ENTERING THE WEEKEND ON HIGH HOPES

Domestic equity markets were able to extend their recent gains today, continuing a major rally in the previous session amid growing optimism that a solution to the budget and debt ceiling concerns may be delivered soon as negotiations continue on Capitol Hill.

The Dow Jones Industrial Average closed 111 points higher (0.7%) at 15,237, the S&P 500 Index gained 11 points (0.6%) to 1,703, and the Nasdaq Composite increased 31 points (0.8%) to 3,792. Elsewhere, treasuries were nearly unchanged on the heels of a larger-than-forecasted decline in U.S. consumer sentiment. Bond markets will be closed on Monday in observance of Columbus Day. Meanwhile, gold and crude oil prices were lower, while the U.S. dollar was flat.

In earnings news, Dow member JPMorgan Chase topped analysts’ expectations after excluding a large legal expense, while Wells Fargo exceeded analysts’ bottom line projections, but its revenues were bogged down by lower mortgage-related activity. The financial sector (+0.6%) ended in-line with the S&P.

Stocks climbed amid morning reports indicating a new proposal had been put forth by Republicans that would end the government shutdown and avoid a Treasury default. However, a subsequent White House meeting failed to produce a concrete agreement. In the end, the two sides did not appear to be much closer to a solution as the shutdown is set to enter its third week.

Even though the deadlock has yet to be resolved, equities cheered the mere presence of some form of discussion. All ten sectors registered gains with energy (+1.0%) ending in the lead. The sector posted a solid gain even as crude oil fell 1.0%.

Meanwhile, the other commodity-related sector-materials–underperformed as miners weighed. The Market Vectors Gold Miners ETF fell 2.1% while gold futures tumbled 2.1%. Elsewhere among cyclical sectors, discretionary shares (+0.8%) finished ahead of the broader market with homebuilders contributing to the strength. The iShares Dow Jones US Home Construction ETF advanced 1.7% as all major builders rallied. After a shaky start, stocks finished in the positive to close the week.

The Dow rose 1.1 percent, the S&P 500 rose 0.7 percent while the Nasdaq fell 0.4 percent as some of the strongest gainers in the tech sector sold off during week as investors were taking profits. Earnings season will be in full swing next week but fiscal issues will remain a main focus for traders, and the U.S. government shutdown could continue to complicate the economic calendar.

With the 2-day rally overcoming the early sell-off, our Trend Tracking Indexes (TTIs) edged slightly higher and closed as follows:

Domestic TTI: +3.01% (last week +3.02%)

International TTI: +6.41% (last week +6.14%)

Have a great week.

Ulli…

————————————————————-

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 Bill:

Q: Ulli: On 9-6-13, FOCPX dropped 8.8% about $6.66 per share. I called a Fidelity rep and he said because Apple fell 9-10% and FBIOX also declared and paid a Capital Gain and Dividend of around $1.189 per share, but it’s sort of floundering around not moving and actually down three days in a row for the last three days.

I guess my question is, are people getting out because of that drop and should I get out also?

I understand when a lot of people get out of a fund they have to sell off and that makes the fund drop.

A: Bill: Here’s how I look at it:

FOCPX made a high of 80.84 on 8/5/13, which would be the number to use for your trailing sell stop. Say, 7.5% of that high would put a sell signal at a break below 74.78, which happened only briefly before this fund recovered. I could not verify the distribution of $1.19.

If that is in fact correct, you need to reduce the high price by that amount, which would make the new high $79.65. Now you calculate the sell stop point of 7.5%, which brings it down to $73.68, which has not been reached yet.

That’s the process I go through to determine if a stop has been triggered. If it has, I will execute the next day, unless there is a huge rebound in the making.

Hope that clarifies your thinking.

———————————————————-

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/