Ulli... The ETF Bully

Stocks Little Changed On Upcoming Fed Decision

Ulli Monday, 28 October 2013, 4:04 PM Market Commentary Contact

[Chart courtesy of MarketWatch.com]

The U.S. markets finished mixed and near the flatline, as traders look toward a barrage of earnings and economic data this week, headlined by the Fed’s monetary policy decision on Wednesday.

The S&P 500 closed at another record high on Monday as expectations were high that the Fed will keep its stimulus in place when it meets this week. Meanwhile, the markets got a taste of the slew of economic data that was postponed as a result of the government shutdown, with industrial production and capacity utilization topping forecasts, while pending home sales unexpectedly fell and growth in regional manufacturing activity slowed more than expected.

On the earnings front, Dow member Merck & Co bested the Street’s profit expectations but fell short on the revenue side, while Burger King Worldwide topped estimates and upped its quarterly dividend. In other equity news, Dow component JPMorgan Chase & Co reached a $5.1 billion agreement to resolve all of its mortgage-backed securities litigation with the Federal Housing Finance Agency. Treasuries and the U.S. dollar finished nearly unchanged, while gold and crude oil prices were higher.

ETFs/Mutual Funds On The Cutline – Updated Through 10/25/2013

Ulli Monday, 28 October 2013, 6:04 AM 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 348 (last week 342) 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. 73 ETFs (last week 75) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 826 (last week 818) above the line and 33 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 The Bond Markets Slump By The End Of The Year?

Ulli Sunday, 27 October 2013, 6:01 AM Market Review Contact

Investors can ignore the Fed and the economic data when they consider where to allocate their funds in the coming months, said Michael Shaoul, chairman and chief executive officer at Marketfield Asset Management LLC.

The Fed is way behind the curve and the equity market certainly understands that. At some point the Fed will wake up to the reality, which will probably be the first quarter of next year. The real danger right now seems the possibility of the bond-market reacting ahead of the Federal Reserve. That may result in the rerun of a situation witnessed earlier, i.e. a big reallocation of assets out of fixed-income. That’s something that needs to be watched very carefully, Mike said.

A lot of value investors have decided to sell out after equity indexes hit all time high and hoard cash. Many mutual fund and Private Equity managers have decided to liquidate their equity holdings. Asked to comment, Mike said it’s a wonderful time to exit equities if the investor bought his stocks 3-4 years ago. The current bull-market has reasons against the backdrop of people trying to ignore how strong it has been. At the moment anybody who says investors need to stay out of the market is congratulated for being prudent.

New ETFs On The Block: Invesco Powershares China A-Share Portfolio (CHNA)

Ulli Saturday, 26 October 2013, 6:04 AM Country ETFs Contact

Invesco PowerShares, the fourth-largest US ETF sponsor and a leading global provider of exchange-traded products, has launched an actively-managed equity, quantitative and rules-based ETF that is focused on mainland China stocks, targeting the Chinese A-shares market. With the recent spate of economic data indicating China slowly getting back on the growth trajectory, China-focused funds have witnessed robust price appreciation in recent months.

The PowerShares China A-share Portfolio (CHNA) will track the SGX FTSE A50 Index, a free-float adjusted and liquidity screened benchmark that provides exposure to the largest 50 companies within China as determined by market capitalization.

The constituent companies of the underlying trade in Chinese renminbi/Yuan on the Shanghai and Shenzen Stock Exchanges and the benchmark are adjusted on a quarterly basis for performance. The index is currently biased toward financial companies and includes China Minsheng Banking, China Merchants Bank, Shanghai Pudong Development Bank and Ping An Insurance.

10-25-2013

Ulli Friday, 25 October 2013, 4:30 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, October 25, 2013

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/10/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-10242013/

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Market Commentary

Friday, October 25, 2013

ANOTHER DAY, ANOTHER NEW HIGH

U.S. equity markets ticked higher on Friday, cementing a third-straight week of gains, aided by Amazon.com’s stronger-than-forecasted revenues and a trouncing of analysts’ quarterly estimates by Dow member Microsoft.

Meanwhile, investors mulled a plethora of mixed global economic data, as U.S. durable goods orders came in mixed, consumer sentiment declined and wholesale inventories rose. Elsewhere, German business sentiment unexpectedly declined, and UK 3Q GDP growth accelerated. The Dow Jones Industrial Average closed 61 points higher (0.4%) at 15,570, the S&P 500 Index gained 8 points (0.4%) to 1,760, and the Nasdaq Composite increased 14 points (0.4%) to 3,943.

In other domestic earnings news, Dow member Procter & Gamble posted inline profits, while UPS posted better-than-expected earnings. Finally, Treasuries, gold and crude oil prices were higher, while the US dollar was nearly unchanged. While there were pockets of weakness during the session, the late push enabled every sector to end the day higher.

The utilities (+1.1%) and telecom services (+1.0%) were the biggest gainers, but still didn’t have much pull in driving the broader market higher given their low weighting in the S&P 500. Modest gains in the consumer discretionary (+0.7%), industrials (+0.5%), financials (+0.4%), energy (+0.4%) and technology (+0.4%) sectors were enough to do that.

Large-cap stocks pretty much led the way in today’s session, which was accented by relatively light volume and the receipt of relatively weak economic data that supported the notion the Fed will stay its current course for longer.

The resilience to selling efforts has been a hallmark of this market since Congress agreed to kick the budget and debt limit cans down the road. In the process, Congress kick started a prevailing belief that their inaction will also lead to inaction by the Federal Reserve. Fortified by that monetary sense of things, the thought that money managers underperforming their benchmarks will be chasing returns, and the fear of missing out on another leg higher, participants have been emboldened to buy on dips.

Indexes also posted gains for the week. The Dow rose 1.1 percent, the S&P 500 gained 0.9 percent and Nasdaq 0.7 percent. The Russell 2000 index of small cap stocks registered its eighth week of gains, its longest streak since 2003.

Our Trend Tracking Indexes (TTIs) joined the party and headed higher as well:

Domestic TTI: +5.01% (last week +4.50%)

International TTI: +8.45% (last week +8.17%)

Have a great week.

Ulli…

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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 Joel:

Q: Ulli: In your latest e-book, and during various posts throughout the year, you mentioned that certain Index ETFs, like the ones of the low volatility variety, are better suited for the use with trend tracking.

Is there any way to get a list of these?

A: Joel: Actually, I am in the process of revamping the daily commentary to include exactly 10 of these, which are most suitable. They are selected by my MaxDD% indicator, which I will comment on in more detail.

The scheduled change along with these new “ETFs in the Spotlight” will be effective as of 11/4/13 with an announcement being mailed to all readers on the prior day. Look for it.

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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/

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

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