Taper Worry Is Back On

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The major indexes meandered with the Dow coming off its record high as worries about the Fed reducing its stimulus program sooner rather than later. Atlanta Fed president Lockhart threw the fly in the ointment by proclaiming that the central could cut back its bond buying program as soon as December while Dallas Fed president Fisher chimed in that they will have to taper at some point.

And that’s how it will be from heron forward, as markets may rally on mediocre economic news and sell off on positive ones; we’ve seen that theme all year. Again, personally, I don’t believe that the economy has any staying power on its own, and we may very well see increased stimulus next year rather than a reduction.

The S&P’s two-day winning streak came to an end as the earnings season is winding down. Today’s predominantly sideways action may continue for a while until a new driver emerges that could propel the indexes higher; of course, the fear of a long overdue correction will always be with us, so be prepared to have your exit strategy in place via my recommended trailing sell stop discipline.

Here are our ETFs in the spotlight:

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The Dow Makes Us Bow Again

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The Dow Jones has exceeded expectations once again as it rose to another all-time high today.  It seems investors are “hanging 10” on the wave of momentum that the surprisingly strong U.S. jobs report created last Friday.  This is a hard pill to swallow as we near year-end, because all-time highs like this often make investors skeptical to put more money into stocks, yet at the same time it is so hard to walk away from returns like we have seen in 2013.  However, we are still in Bull Market territory.

In the ETF world today, the Healthcare and Energy sectors were the top performers, showing gains of 0.24% and 0.18% respectively.

With all the tweets about Twitter’s IPO last week and given the volatility inherent to software IPOs, one might be hesitant to invest directly in the company.  However, investors that do not want to take the risk of investing in a single company such as Twitter will have another option for owning the social media stock this week.

At least a couple of ETFs are set to add TWTR to their portfolio in the next five days, creating a new avenue for investors to own a piece of the company: Global X Social Media ETF(NASDAQ: SOCL), Renaissance IPO ETF (NYSE: IPO) and First Trust IPOX 100 Index ETF (NYSE: FPX) will most likely all pick up the stock, but I am curious to see who adds it to their portfolio first.

Here are the ETFs in the spotlight:

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ETFs/Mutual Funds On The Cutline – Updated Through 11/8/2013

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 322 (last week 332) 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. 68 ETFs (last week 71) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 797 (last week 811) above the line and 62 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: Will US Growth Will Pick Up Next Year?

Ulli Market Review Contact

92835431

The economic recovery will not be as good as it has been historically after recessions, but the economy will do better than what it has done recently, said Maury Harris, managing director and chief US economist at UBS. There have been a number of problems that have been holding back growth and probably won’t be as harmful next year. From a historical standpoint, this isn’t normal, Maury said.

There was a modest increase in consumer spending recently. Asked if that means people have more disposable income or they are simply using credit to pay for basic necessities, Maury said a couple of things are going on simultaneously now.

Firstly, incomes are not going up that fast, but neither are prices. So whatever people are making can be stretched further. Secondly, the latest report shows people have started to borrow again. Also, for people who own home, there has been a nice turnaround in house prices; a phenomenon that economists call the “wealth effect.” So there has been a couple of factors that have been pushing up consumer spending, he explained.

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New ETFs On The Block: Wisdomtree’s Germany Hedged Equity ETF (DXGE)

Ulli Hedge Fund ETF Contact

91551519While the eurozone is still struggling with high joblessness and shrinking economies, Germany, the European Monetary Union’s largest economy, continues to amaze by remaining competitive and notching up respectable growth quarter-on-quarter.

Exports, which contribute more than 50 percent of German economic output, is likely to benefit further going forward from a broader global recovery.

WisdomTree, the New York-based exchange-traded fund issuer known for its line-up of currency-hedged products, has decided to leverage the German growth story through the launch of the Germany Hedged Equity Fund (DXGE). The fund employs hedging strategies to mitigate the risk of unpredictable currency movements that tend to affect returns.

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11-08-2013

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, November 8, 2013

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/11/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-11072013/

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Market Commentary

Friday, November 8, 2013

BULLS SMILE BRINGING A HEARTY SALUTE TO VETERANS DAY

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The major indexes all closed on a bullish note today rebounding 1%+ as the weekly chart above shows.  Stocks were higher on the week, led by the increase in basic materials stocks.  Equity ETF funds saw substantial outflows last week as the Dow Jones Industrial Average hit record highs.

In corporate news, Twitter and BlackBerry represented two extremes. Twitter’s much anticipated IPO was a soaring success. Not only was it 100% glitch-free, which was a major focus after Facebook’s IPO faced technical problems last year, but more important, the social media firm’s shares soared, rising 73% from the initial price of $26 per share.

Although Twitter still hasn’t turned a profit, millions of investors are betting on its potential.

In contrast, BlackBerry’s executives’ faces turned red, as the once-dominant Smartphone maker continued to stumble, unable to attract financing for a planned $4.7 billion sale

The U.S. economy added 204,000 jobs in October, much more than the 125,000 expected. However, the unemployment rate rose to 7.3% in October from 7.2% in September.

While market volatility could certainly resurface at any time, it’s interesting to note that years with returns over 20% during the first 10 months continued that strong performance through the end of the year, historically recording a return of about 6% the last two months.

Let’s look at the ETFs in the spotlight:

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, all of them never 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

With Thursday’s sell off and Friday’s rebound, only SPY managed to close at new highs for the year as the “Off High” column shows. All others have pulled back slightly.

3. Domestic Trend Tracking Indexes (TTIs)

Trend wise, our Trend Tracking Indexes (TTIs) slipped but remain above their long term trend lines by the following percentages:

Domestic TTI: +3.98% (last week +4.33%)

International TTI: +6.48% (last week +7.37%)

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 Ron:

Q: Ulli: With the daily commentary changes mentioned this week, will the fund tracker and cutline reports no longer be published or accessible? Thanks, and I truly enjoy reading your articles.

A: Ron: No, all reports will remain the same as before; the new commentary is simply an enhancement. You were probably looking for the StatSheet Thursday night; I got behind schedule and posted it this morning.

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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/