Bouncing Back

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Markets made a soft rebound today after closing in the red yesterday. The Dow was up 0.57%, The S&P up 0.61% and the Nasdaq up 0.35%

Apple (AAPL) took a big hit today falling 8% after it released its Q4 numbers. AAPL volume was nearly triple the daily average as investors did not take too kindly to hearing that iPhone sales in Q4 fell short of expectations. The company also announced that it is forecasting 2013 Q1 revenue of $42-44mil, which also falls short of Wall Street’s projected $46mil. Overshadowing the news of Apple’s Q4 shortfall was the revelation that Karl Icahn bought $500mil more AAPL shares today, which gave the stock a slight bump, but nothing substantial.

Visa Inc. (V) was another mover of the day, closing up 2.19%.  If you didn’t catch the news of the economy today, consumer confidence climbed to a 5-month high. The index advanced to 80.7 from a revised 77.5 in December. Let’s hear it for optimism! As we know, higher consumer confidence often bodes well for credit card companies such as Visa, which subsequently benefited from the optimistic news today.

You may remember our discussion regarding investor uncertainty in emerging markets. Well, the topic remained hot in the news today as investors continue to pull funds out of emerging markets such as Brazil and India. The trouble is that relatively safe emerging markets tend to get lumped in with the unstable ones. Consider the iShares MSCI Emerging Markets ETF (EEM).  This ETF, which is down 5%, has exposure to Brazil and India, but also in more stable economies like South Korea and Mexico. So, you should keep a close watch on holdings that are in allegedly “safe” emerging market investments in the days to come.

Our 10 ETFs in the Spotlight recouped some of the recent losses and all are back on the bullish side of their respective trend lines.

Read More

Developing Country Worries? Never Fear, The U.S. Is Here!

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

There was not much good news from the markets today, but not much terrible news either.  It seems that fearful investors are selling off equities worldwide due to shaky economies and plunging currencies in the developing world. While the sell-off in the U.S. has not been as notable as in Europe or Asia, investors are definitely retreating. This continued sell-off pushed the Dow, S&P and Nasdaq lower today. Remember, the turbulence was set off last week by a report from China on a downturn in its manufacturing, which many believed to be indicative that the world’s second-largest economy is slowing.

The U.S. Federal Reserve is adding some icing to the troubled developing world cake. By cutting back the stimulus, money that was formerly invested outside the U.S. in search of higher returns is now making its way back given that domestic rates here are expected to rise. While all of this may seem scary, let’s remember that the IMF expects the global economy to grow 3.7% this year, which is up from 3% last year. Because growth is picking up in the developed world again (U.S., U.K. and Germany) we are in a much better position to pick up the slack of a slowdown in developing countries such as China. The U.S. housing market has rebounded, American consumers are paying down debts, and we have seen decent corporate earnings thus far in 2014.

What is important to remember is that the S&P 500 gained almost 30% last year, which is just unfathomable to many. Because many investors realized tremendous gains there are many who are on edge waiting for the market to correct itself. So, any news that smells kind of funny will make them pull the trigger to sell in order to protect these gains. So let’s try not to get too over-reactive on every piece of news coming out of the developing world, because things are not looking so bad here in the U.S.!

Our 10 ETFs in the Spotlight slipped with the indexes, and I am tracking the pullback closely. None of the featured ETFs has triggered its trailing sell stop, but one just slipped below its long-term trend line.

Read More

ETFs/Mutual Funds On The Cutline – Updated Through 01/24/2014

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 311 (last week 325) 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. 52 ETFs (last week 60) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 590 (last week 703) above the line and 259 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: Will US Equities Outperform Bonds In 2014?

Ulli Market Review Contact

92835431The latest manufacturing data out of China, which showed a contraction, was enough to take global equity markets down Friday, said Mark Eibel, Director of Client Investment Strategies at Russell Investments.  The US earnings season has been pretty mixed and even a strong manufacturing reading out of Europe was not good enough to change the downbeat tone for the day, he noted.

Asked to comment on the January 31 deadline in China about Trust wealth products that could possibly lead to default and trigger a stock-market correction this quarter, Mark said he doesn’t think one data point out of China is enough for such a reaction.

All these days, global attention was focused on the US – the debt ceiling, federal budget negotiations and the Federal Reserve policies. However, the trigger point will not come from the US and it’s more likely to come from outside.

Read More

New ETFs On The Block: First Trust NASDAQ Rising Dividend Achievers ETF (RDVY)

Ulli Dividend ETFs Contact

90272538Illinois-based provider of exchange-traded funds First Trust has introduced its first fund in 2014, adding to its lineup of dividend exchange-traded funds with the launch of its First Trust NASDAQ Rising Dividend Achievers Fund (RDVY). Although 2013 turned out to be a disappointing year for income strategies, demand for yield focused funds remained robust, which probably explains why First Trust chose to launch a fund with a twist in this already overcrowded space.

RDVY tracks the NASDAQ US Rising Dividend Achievers Index, a benchmark that focuses on 50 companies with a history boosting their payouts. Also, companies need to show the potential of raising dividends in the future to be included in the index.

To achieve this, a firm’s earnings growth, levels of cash reserve compared to debt and the proportion of dividend payouts are screened first. Firms with a history of growing dividend payouts and earnings per share, along with a cash-to-debt ratio higher than 50 percent and a trailing 12-month payout ratio below 65 percent make it to the benchmark.

Read More

01-24-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, January 24, 2014

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2014/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01232014/

————————————————————

Market Commentary

Friday, January 24, 2014

STOCKS TAKE A BEATING THIS WEEK

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Well, it was a poor end to a mediocre week in the U.S. stock market. U.S. stocks experienced their largest daily drop of the year with the S&P falling 2.09%, the Dow -1.96% and the Nasdaq -2.15%. The chart above shows the impact of the entire last five trading days. This officially marks the worst week for benchmark indexes since 2012. What is going on?

Many analysts place the blame on increased volatility in global markets, which sparked a large selloff of developing-nation currencies. The Volatility S&P 500 (VIX) index was up 31% today, which adds fuel to the ‘anticipated volatility’ fire. Major markets in Europe and Asia also closed lower and remember that we also had weak growth numbers come out of China yesterday.

Others say that this is the correction we have been waiting for. Let us not forget the old saying “as goes January, so goes the year.” With only five days of trading left this month and with the S&P down 50 points (-3%) the old January effect saying might indicate that we are in for a rough ride this year. This should make for an interesting next week of trading; it is crucial that you have your exit strategy in place and execute your plan should your sell stops get triggered.

Our 10 ETFs in the Spotlight headed south but none of them triggered a “Sell,”, although some have come close as the table below shows.

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).

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:

YTD

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) joined the downward momentum, but they remain on the bullish side of their respective trend lines:

Domestic TTI: +2.67% (last Friday +4.01%)

International TTI: +4.34% (last Friday +6.79%)

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 Don:

Q: Ulli: Is your 39 week moving average really a 195 day moving average?  (39 weeks x 5 trading days per week = 195)

A: Don: There is a small difference. With a 39-week M/A, you recalculate the average only every Friday while when using a 195 day M/A, you would recalculate every day. I prefer the former, though in the end it may not make that much difference. Whatever you prefer, you should use.

———————————————————-

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/