Green Streak Comes To An End

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

The U.S. Federal Reserve was back in the spotlight again as traders worried that the Fed would begin to scale back its monetary stimulus when it meets on Tuesday and Wednesday next week. U.S. equity averages fell, halting a seven-day win streak for the Standard & Poor’s 500 Index as materials producers slid amid growing concern over Syria.

Economic data showed first-time weekly claims for state unemployment benefits, the last major reading on the labor market before the Fed’s meeting, fell to the lowest level since 2006, but the picture was incomplete because two states did not process all their claims.

Nine of ten S&P 500 industry sectors ended in the red. After posting gains in each of the past seven sessions, several of this month’s top performers fell victim to some profit-taking. Financials, industrials, and materials led to the downside with losses ranging between 0.5% and 1.0%. The financial sector was pressured by the underperformance of most large banks as investors attempted to gauge the impact of a slowdown in the mortgage industry.

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Major Index ETFs Rise On Syria Development

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

The Dow and S&P 500 Index continued their recent upward drive, amidst easing concerns over possible U.S.-led military action against Syria, while the Nasdaq closed lower as Apple Inc’s biggest decline since April weighed on the index.

The Standard & Poor’s 500 Index advanced to a one-month high, the seventh straight winning session. Market nervousness abated as U.S. President Obama asked congressional leaders to delay a vote on authorizing military force to give the diplomatic efforts a chance. That has lessened some of the macro concerns out there as investors are rotating back towards the market.

In economic news, wholesale inventories rose 0.1% month-over-month in July, snapping a three month streak of declines, compared to the 0.3% growth forecasted by economists. Elsewhere, the MBA Mortgage Application Index fell 13.5% last week, after the index increased in the previous week. This drop came as a 28% tumble for the Refinance Index was accompanied by a 2.7% decline for the Purchase Index. The average 30-year mortgage rate rose 7 basis points (bps) to 4.80%.

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7 ETF Model Portfolios You Can Use – Updated through 9/10/2013

Ulli Model ETF Portfolios Contact

As the chances of an engagement in Syria became less threatening, the markets did a turnaround, after having slid towards a possible bearish break of the domestic trend line. That did not happen, and the major indexes picked up steam with the S&P 500 gaining +2.68% since last week’s model ETF portfolio report.

Despite the ongoing volatility, low volatility ETFs, such as XLP and SPLV, in which we have positions, were surprisingly lagging, as they have for the past month. Bond ETFs, of course, as I mentioned before, have been the losers for this year and any portfolios containing them have been left behind.

While the recent bounce back was a welcome development after the August selloff, it remains to be seen if this trend can hold or if it turns into a dead cat bounce. It pays to be prepared for either scenario as historical market disasters seem to occur most often during September and October.

Here’s the latest ETF Model Portfolio update:

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Bulls Win For 6th Straight Day

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

Amid more upbeat global economic news and concerns over a U.S.-led strike on Syria continuing to wane, U.S. equities closed with solid gains as the S&P 500 advanced for the sixth straight session. Chinese economic data showed stronger-than-anticipated reads on industrial production, retail sales and lending activity, while Syrian Foreign Minister announced that the country has agreed to Russia’s proposal to put its chemical weapons under international control.

On the equity front, Goldman Sachs, Visa and Nike jumped more than 2.1 percent as the three companies will be added to the Dow Jones Industrial Average, replacing Bank of America, Hewlett-Packard and Alcoa.

Stocks registered the bulk of their gains during the opening hour after China’s industrial output rose 10.4 percent in August from a year earlier and the nation’s retail sales gained 13.4 percent. Both results exceeded economists’ estimates. Equities also climbed yesterday as China’s exports topped forecasts. Meanwhile, new developments about Syria reduced risk for financial markets.

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China Helps Nasdaq To End At Highest Since 2000

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

Global economic optimism, courtesy of a stronger-than-expected read on Chinese August exports and a sharp upward revision to Japan’s 2Q GDP growth, helped to propel stocks to start the week. U.S. markets closed sharply higher on Monday, with the Nasdaq ending at its highest level since September 2000.

Sentiment was also lifted by merger activity and easing concerns about a potential Western-led strike on Syria. Meanwhile, consumer credit was the only item on today’s economic calendar, showing that consumer credit expanded at a smaller-than-expected pace.

U.S. equities climbed from the open thanks to China reported overnight a larger-than-expected trade surplus as imports grew 7.0% (11.3% expected) and exports increased 7.2% (6.0% forecast). Elsewhere, Japan saw its second quarter GDP revised up to 0.9% quarter-over-quarter from 0.6% and Tokyo received the nod to host the 2020 Olympics.

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ETFs/Mutual Funds On The Cutline – Updated Through 9/6/2013

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 297 (last week 272) 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. 59 ETFs (last week 50) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 769 (last week 752) above the line and 90 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.