Bulls Open The Week Thanks To Positive Data

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

Buyers came into the market today as the bulls maintain the Fed still has lingering concerns about the economy and won’t say anything to rattle the market when its two-day meeting concludes on Wednesday.

However, stocks were rattled by a Financial Times story suggesting that Fed Chairman Bernanke is likely to signal the Fed is close to tapering down its $85 billion-a-month in bond purchases. The Dow Jones Industrial Average closed 110 points (0.7%) higher at 15,180, the Standard & Poor’s 500 Index rose 12 points (0.8%) to 1,639, and the Nasdaq Composite added 29 points (0.8%) to 3,452.

Although the story did not contain any new revelations, the mere mention of tapering knocked equities off their highs. Today’s paring accelerated after a British official said the Group of Eight leaders (G-8) see downside risks to the global economy abating even as growth prospects remain weak.

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ETFs/Mutual Funds On The Cutline – Updated Through 6/14/2013

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 39 (last week 313) of them 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. 56 ETFs (last week 57) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 795 (last week 804) above the line and 64 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.

Last Week In Review: ETF News And Blog Posts To 6/16/2013

Ulli Market Review Contact

In case you missed it, here’s a summary of the ETF topics and market commentaries I posted to my blog during the week ending on 6/16/2013.

The prior week’s roller coaster ride continued as the major market indexes meandered in a range without clear direction. The S&P 500 gave back about 1% as fear of the Fed reducing its monthly bond purchases of $85 billion remains alive and well.

It seems as though we’ve been bouncing off a glass ceiling unable to break through. Until there is clear evidence as to when/if the Fed starts its tapering process, the markets may continue trading sideways until, eventually, a breakout will occur. Too much uncertainty will likely bring the downside into play with a major support level being the S&P’s 50-day moving average, which currently hovers around the 1,600 level.

Over past week, we covered the following:

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One Man’s Opinion: Are The Markets Being Perfectly Logical Now?

Ulli Market Commentary Contact

92835431The markets are not being terribly logical and they are not expected to be logical in the short-term either, says David Kelly, Chief Global Strategist at JP Morgan Funds.

Though the markets have remained volatile in recent times, fundamentally, the US economy has improved, Dave noted. Also, since the labor participation rate is falling, the unemployment rate will gradually come down with the current pace of economic growth.

However, none of these numbers change the fact the Fed will be forced into tapering the QE. The Federal Reserve can’t continue to buy bonds at a pace of $1 trillion every year and later this year or early next year, they will have to taper the program. As they do that, long-term rates will go up. Rates (or bond yields) may fall on a few occasions in the short run, but ultimately investors should position themselves for a rate hike over then next few months, he added.

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New ETFs On The Block: DB-X Tackers Introduces Income-Oriented Industry First ETFs (RVNU, UTLT)

Ulli Bond ETFs Contact

71080438Deutsche Asset & Wealth Management, a division of Deutsche Bank AG and a provider of exchange-traded funds, has announced the launch of two new ‘industry-first’ products from its stable of exchange-traded products on the NYSE Arca.

Though ETFs focused on municipal bonds have ballooned to $12.3 billion dollars in assets as of year-end 2012 from $600 million in 2007, the db X-trackers Municipal Infrastructure Revenue Bond Fund (RVNU) and the db X-trackers Regulated Utilities Funds (UTLT) gives investors access to municipal infrastructure revenue bonds and utilities, respectively – sectors currently untapped by other issuers.

Revenue bonds are issued for a wide range of reasons including maintenance of public water and power supplies, building of toll roads and tunnels, replacement and repair of bridges and roads, and for construction of mass transport systems such as ports and airports. Estimates suggest about two-third of municipal market are revenue bonds.

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06-14-2013

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, June 14, 2013

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/06/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-06132013/

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Market Commentary

Friday, June 14, 2013

THEME OF THE WEEK: RED AND VOLATILE

The major averages ended in the red after early gains evaporated during the opening hour amid a variety of factors. Traders cautiously await next week’s two-day monetary policy meeting by the Federal Reserve, which could offer clues into the central bank’s plans for eventually reducing the pace of its stimulus programs.

Moreover, a slew of lackluster economic reports added downward pressure to stocks, as they failed to inspire a continuation of yesterday’s rally. The Dow Jones Industrial Average closed 106 points lower (0.7%) at 15,070. Yesterday, the Standard & Poor’s 500 Index bounced off its 50-day moving average, but today’s session saw the index get rejected by its 20-day average, decreased 10 points (0.6%) to 1,627. The Nasdaq Composite shed 22 points (0.6%) to 3,424.

Big news came as the International Monetary Fund cut its 2014 outlook for America to 2.7% from 3.0% and urged the central bank to carefully manage its exit from stimulus plans.

Elsewhere, Industrial production was unchanged in May, slightly below the consensus of +0.1%. Manufacturing output ticked up 0.1%, led by durables. The Producer Price Index (PPI) rebounded a broad-based 0.5% in May, its first increase in three months, and above the consensus of 0.1%. Moreover, the Reuters/University of Michigan Consumer Sentiment Index fell 1.8 point to 82.7 in the preliminary June reading. Economists expected a smaller pullback to 84.0.

Stocks ended a volatile week as the CBOE Volatility Index climbed to notch its highest weekly close of the year with investors adjusting their near-term volatility expectations. Financial stocks led the market’s decline on Friday, ending lower by 1.3%.

Stocks failed to carry over momentum from last week’s relatively upbeat May employment report, posting the first three-session losing streak this year to finish in the red for the week. For the week, the Dow fell 1.2%, the S&P 500 slid 1% and the Nasdaq lost 1.3%. The bulls were hamstrung out of the gates as Chinese inflation, lending, and trade data disappointed. But the bulk of the pressure came courtesy of festering concerns about further global stimulus measures amid the backdrop of lingering Fed asset-purchase uncertainty.

Meanwhile, the concerns were exacerbated by the Bank of Japan holding off on adding to its aggressive stimulus measures, as some had expected. However, losses were pared by upbeat reports on US jobless claims and retail sales, which did little to clear up Fed exit plan uncertainty, ahead of next week’s policy meeting.

All eyes are on the Fed again next week. What can we expect? Probably more of the same, in regards to uncertain market direction, should the Fed’s language about its potential tapering efforts remain non-committal.

Our Trend Tracking Indexes (TTIs) lost some steam and ended the week as follows:

Domestic TTI: +2.65% (last week +3.04%)

International TTI: +5.14% (last week +6.14%)

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 Thomas:

Q: Ulli: Good morning. I need your opinion; I have a large share of my fixed income invested in HYG & JNK. Should I sell both positions at this time? Thank you.

A: Thomas: As you know, I let my trailing sell stops make those decisions for me, so that I don’t have to be emotionally involved. Depending on your risk tolerance, you can use a 5% or 7% trailing stop.

Figure out your high point from the time you purchased these ETFs, reduce that number by the dividends received, and then apply your sell stop. If it gets triggered, you sell; if not, you continue to hold. That’s what I would do.

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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/