Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 08/22/2013

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, August 22, 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 +1.69% 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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Bulls Show Signs Of Life, Finally

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

U.S. equity index ETFs finally snapped their six-day losing streak to finish higher, thanks to some encouraging reads on manufacturing in the U.S., China and Europe, despite a lackluster weekly jobless claims figure and a halt in trading on the Nasdaq.

The second-largest U.S. stock exchange ceased trading on all securities, remaining dormant for three hours before re-opening, as a result of a technology issue. The outage led to what was easily the lowest full-session volume of the year, with about 4.23 billion shares changed hands, well below the daily average.

Stocks climbed out of the gate after upbeat survey data from China and the Eurozone reassured investors. China’s HSBC preliminary Manufacturing PMI Index surprisingly improved to 50.1 for August, from 47.7 in July, exceeding expectations. This was the first reading above the key level of 50, which denotes expansion, since April. Meanwhile, the Eurozone Services PMI Index rose to 51.0 in August, from 49.8 in July, and compared to the 50.2 level that economists had anticipated. This was the first reading above the key level of 50 in 19 months, led by growth out of Germany.

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Tug-Of-War Gives Bears The Upper Hand

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

Investors were anxiously waiting to see when the Fed would start to slow its $85 billion monthly asset purchases, with most predicting September as the beginning of the end of the aggressive quantitative easing program, known as QE4.

However, the Fed’s report offered no additional insight into the timing, keeping the taper anxiety of late intact. U.S. equities pared the losses that came immediately following the release of the minutes, but the bounce lost steam and stocks finished solidly lower.

Equities sold off in response to the Fed’s report, but the S&P followed the slide with a rally to fresh highs before returning into the red just ahead of the close. All ten sectors registered losses with rate-sensitive telecom services (-1.2%) and utilities (-1.2%) leading to the downside. Out of the ten sectors, only energy (-0.5%), health care (-0.5%), and technology (-0.1%) outperformed the broader market.

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7 ETF Model Portfolios You Can Use – Updated through 8/20/2013

Ulli Model ETF Portfolios Contact

The market pullback continued as fears about the Fed’s potential tapering remained the number one concern on Wall Street. The S&P 500 gave back -2.48% since last week’s ETF model portfolio report.

It’s been an unusual year in that bonds have failed to balance out portfolios during those times when equities are in retreat mode. It’s not really a great surprise as interest rates had only one way to go, and that is up, after having reached manipulated all-time lows.

Also, widely diversified portfolios have not performed well but those with only a few funds, like our #5, have done ok, while some of the index ETFs took the spotlight. Most investors are over diversified, which reminds me of Warren Buffett’s saying that “wide diversification is only required when investors do not understand what they are doing.”

Here’s the latest ETF Model Portfolio update:

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Stocks Finally See Green Ahead Of Fed Minutes

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

While the broader market and the Nasdaq finished with gains to snap a four-day losing streak, blue chips spent most of the day in positive territory, but took a nosedive in the last half-hour of trading to end lower.

Retailers’ results surpassed estimates and investors awaited signals on stimulus measures from the Federal Reserve. Dow member Home Depot bested the Street’s estimates and guided higher, TJX Company’s results were above projections, and Best Buy Co easily exceeded analysts’ forecasts, while J. C. Penney posted a wider-than-expected loss despite posting sequentially improved same-store sales.

A retreat in Treasury yields contributed to the relative strength of equities as the benchmark 10-yr yield fell seven basis points to 2.82%. The pullback in yields helped rate-sensitive sectors such as telecom services (+0.5%), utilities (+0.8%), and home builders. The relative strength of home builders provided a measure of support to the discretionary sector, which ended atop the leaderboard.

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Week Starts off on Fourth Straight Loss

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

The above picture is worth a thousand words. U.S. equity markets closed in negative territory for the fourth-straight session to start the week off on a sour note, after energy shares dropped and Treasury yields again jumped to a two-year high.

Today marked the first occurrence of a 4-day losing streak for both the S&P 500 Index and Dow this year. The Nasdaq was positive for most of the session, spurred by gains in technology shares, such as Apple and Google, before selling pressure in the last hour of trading turned the index negative. Investors are eagerly awaiting the mid-week release of the minutes from the most recent Federal Open Market Committee meeting.

While today’s economic calendar did not provide anything for traders to mull, the rest of the week will offer some insight into the health of the economy, headlined by the minutes from the Fed, likely keeping the timing and pace of Fed tapering and the prospect for rising interest rates in the bond market on center stage.

Some analysts believe the economy appears on the rebound, but neither hot enough to force the Fed’s hand nor cold enough to engender recession fears. However, given elevated market sentiment, seasonal tendencies and some technical deterioration within the stock market, many believe the market has become vulnerable to a pullback.

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