Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 09/05/2013

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ETF/Mutual Fund Data updated through Thursday, September 5, 2013

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If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

TTI

The Domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our Trend Tracking Index (TTI—green line in above chart) has bounced off its long term trend line (red) by +1.15% after briefly dipping below it late in June.

To avoid a potential whip-saw, a Sell signal to move out of all domestic equity positions will be generated once we have clearly pierced the line to the downside. Be sure to tune in for the latest updates.

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Three Days Of Gains In A Row

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

The U.S. equity markets extended their winning ways for a third-straight session, with benchmark indexes staging the longest rally since July, as some favorable employment reports and a record high reading in services sector activity suggested that investors may be expecting the Federal Reserve to begin tapering its asset purchases later this month.

Meanwhile, gold sank almost 2 percent to two-week lows after the data. Although stocks finished in positive territory, their gains were capped by Treasury yields hitting their highest levels since July 2011. Elsewhere, the likelihood of a military strike on Syria continued to linger on traders’ minds.

Interest rates have been on the rise throughout the quarter, and that has pressured the most rate-sensitive sectors. Consumer staples (-0.1%), telecom services (-0.8%), and utilities (-0.4%) finished at the bottom of today’s leaderboard, which widened their third quarter losses.

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09-05-2013

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The ETF/No Load Fund Tracker

Monthly Review—August 31, 2013

Major Equity Indexes Slip And Slide During August

All major domestic indexes headed south during the month of August as higher interest rates, continued taper talk and the Syrian war drums proved to be too much of an obstacle to overcome.

The month started out positive with the S&P 500 reclaiming its psychologically important 1,700 level during the first few days, but that was the highlight. The benchmark index, and our major holdings in XLP and DVY, reversed their trend and headed towards bear market territory.

The pullback was slow and steady with only a few brief dead cat bounces as the following chart shows:

Chart1

It’s interesting to note that none of our trailing sell stops were triggered, although XLP came within 1% of being liquidated but, towards the end of the month, all indexes headed back up slightly.

Looking at the big picture, our main gauge, the Domestic Trend Tracking Index (TTI), slipped as well and, on the last trading day of the month, came within 0.84% of signaling an “all-out” liquidation for our domestic holdings. Here’s the TTI chart:

TTI

We currently remain above the trend line and will continue to hold on to our current positions. This week’s payroll report and unemployment rate may give us some clue as to whether the Fed will actually reduce its QE efforts or not.

Current consensus is that they will follow through and implement a reduction, however, if the reports come in worse than expected, like less job creation and a higher unemployment rate, you could see a huge rebound rally as bad news is good news, and the Fed’s tapering may not actually happen. If the fact that economic bad news can actually be good news for the markets sounds perverse to you, you’re not alone.

We are living in a world where unintended consequences can influence markets all of a sudden, which means that we always have to be prepared to step aside to the safety of the sidelines. Whether it’s “taper talk” by the Fed, or the beating of the Syrian war drums, depending on the magnitude of the news event, markets can rally in the face of adversity or sink and head towards bear territory on what you and I might consider positive developments.

The trend is not only our friend, but also the only thing that is real in this all too unreal environment. As always, I will be prepared to execute our sell stops when the markets tell me that it’s time to do so. Not having an exit strategy under these conditions can be very costly to your financial health once the inevitable correction occurs.

Bulls March On Powered By Good Data

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

Domestic stocks rallied to close higher for a second-straight session, led by automakers and technology companies, as a Senate panel voted to authorize military action in Syria and on the heels of the Federal Reserve releasing an upbeat Beige Book report.

The S&P 500 settled higher after regaining its 100-day moving average shortly after the open. About 6.1 billion shares changed hands on U.S. exchanges today, slightly below the daily average so far this year.

The major automakers reported U.S. August sales today, with Chrysler’s, Ford’s, and General Motor’s sales rising at least 12.0% y/y, all beat out analysts’ growth expectations. Today’s numbers marked the strongest month since October 2007. Meanwhile, the Federal Reserve also released its Beige Book, a summary of anecdotal economic data from all twelve Fed districts.

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7 ETF Model Portfolios You Can Use – Updated through 9/3/2013

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More uncertainty about the potential engagement in Syria caused the major indexes to fluctuate sharply on an intraday basis, as early rallies were offset by mid-day selloffs, which were followed by late day rebounds.

In the end, the S&P 500 managed to eke out a gain of +0.61% since last week’s ETF model portfolio report. Besides continuous war talk, the markets will have to deal with this Friday’s upcoming nonfarm payroll report (NFP), along with the unemployment figures. If these numbers come in close to as expected, chances are enhanced that the Fed will follow through with reducing their QE efforts, although the time table may be uncertain.

If the NFP disappoints hugely, odds are that “tapering” is off the table, which may give the markets a much hoped for boost. No one knows how the dice will fall, but with our Domestic TTI only hovering less than 1% above its long-term trend line, we could exit our holdings fairly soon should adverse market news hit the tape.

Here’s the latest ETF Model Portfolio update:

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Major Indexes Edge up Cautiously On Upbeat Economic Data

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

U.S. equities bounced off afternoon lows to finish in the positive but were far off session highs in choppy action, as investors received many market moving news. Catalysts included upbeat manufacturing reports out of the U.S., China, and Europe with the increasing likelihood of a US-led military response toward Syria, as House Speaker Boehner said that he supports the President’s plan.

M&A reports also dominated the equity headlines, with Dow member Verizon Communications agreeing to acquire Vodafone Group’s stake in Verizon Wireless for $130 billion, while fellow Dow component Microsoft said it will purchase Nokia’s cellphone business for $7.2 billion. In other deal-making news, CBS Corp and Time Warner Cable reached a programming agreement, while Jarden Corp inked a deal to buy Yankee Candle for about $1.75 billion in cash. Today’s participation marked an improvement over most August sessions as nearly 800 million shares changed hands on the floor of the New York Stock Exchange.

The S&P 500 rose more than 1 percent in early trading after Obama sought congressional authorization before taking military action, a move seen likely to shelve any strike for at least several days. The early gains did not hold past the initial two hours as late-morning comments from House Speaker John Boehner and Majority Leader Eric Cantor.

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