Last Week In Review: ETF News And Blog Posts To 3/17/2013

Ulli Market Review Contact

In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 3/17/2013.

It was a slow week with the S&P 500 “only” adding 0.6% to the prior five trading day’s sharp gains as the benchmark neared its 2007 all-time high. While the Dow has been frolicking in record territory for the past 10 days or so, the S&P has been lagging behind.

It seems that it’s only a matter of time until this milestone will be conquered as well since, as I posted before, the Fed, with its loose monetary policy, has become the decision maker and planner as to how much the equity indexes are allowed to move and in which direction.

Since economic fundamentals are disconnected from current market levels, I can see only two scenarios in the long run. Either the fundamentals improve, due the Fed’s desired and intended wealth effect, justifying the elevated market levels, or, the indexes reverse their trend and head sharply south to synchronize with the slowing economy.

There is way to anticipate when either one of these scenarios will occur, so it behooves you to not try to be a hero and make a wild guess, but to simply follow the trends and use my recommended exit strategy when necessary. To my way of thinking, only the market trends, as I measure them via my Trend Tracking Indexes (TTIs) can give you a true answer as to where market direction is while the fundamentals present a murky picture at best.

Over past week, we covered the following:

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One Man’s Opinion: Is New Cash Driving The Market Indexes Higher?

Ulli Market Commentary Contact

92835431It is assumed the “great rotation” causes money to flow from bonds to equities that drives the stock market higher. However, in the present context, many disagree saying it’s simply new cash that’s driving the markets higher.

Jeffrey Rosenberg, chief investment strategist for fixed income at BlackRock Inc, is one who agrees with that theory. If you look at the data, you’ll see that what happened last year when we had the fiscal cliff concern, people were afraid and we saw a growth in deposits and money market funds. First two months of the year, that money came out of bank deposits and money market funds and went into the stock markets. However, it’s not the great rotation yet, but the”other great rotation” where hard cash has flown into equities, noted Jeff.

Asked what yields are required to drive people to equities from bonds, Jeff said you need to see significant and protracted losses in the bond market to witness the “great rotation,” i.e. yields of above 3 percent for 10-year Treasury notes; current yields are nowhere near that now, he said, adding the US witnessed 30 years of declining interest rates and it will take more than one month to convince people to take their money out of their bond portfolios.Read More

New ETFs On The Block: Global X Superdividend US ETF (DIV)

Ulli Dividend ETFs, Low Volatility ETFs Contact

146026450Global X Funds, a New York-based provider of exchange-traded funds best known for its niche offerings, has launched the Global X SuperDividend US ETF (DIV). As the name suggests, the fund is a direct play on one prominent theme; the investors’ thirst for dividend and yield.

However, the new ETF features an additional source of appeal for the conservative investor; it plays on the soaring popularity of low volatility products. In short, it combines two highly popular styles – high dividends and low volatility.

Popularity of high income products have surged over the past couple of years as interest rates have hit rock-bottom, confining yield to fixed income instruments and savings products. Likewise, low volatility products have grown popular as investors sought protection from increasing market volatility caused by various factors including the European sovereign debt crisis, the global economic slowdown and the US political uncertainty over budget negotiations.

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03-15-2013

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, March 15, 2013

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/03/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-03142013/

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Market Commentary

Friday, March 15, 2013

DOW RETREATS AFTER 10-DAY STREAK OF GAINS; EUROPE SLIPS

US stock indexes retreated, sending the Dow Industrials lower for the first time in 11 days and containing the S&P 500 just as it neared its record close following a surprise drop in a gauge of consumer confidence.

Data released today painted a mixed picture of the economy. Equities eased up after the University of Michigan-Thomson Reuters index of consumer confidence fell to an initial March reading of 71.8 from a final 77.6 reading in February, and raising worries about the impact of higher income tax rates on household spending.

Earlier in the day, the Labor Department said consumer price index rose 0.7 percent in February, driven higher by a spike in energy prices. Annual inflation rate came in at 2 percent, within the range the Federal Reserve feels comfortable in.

Separately, data released by the Federal Reserve showed industrial production rose 0.7 percent last month after being flat in January, and beating forecasts for a 0.4 percent growth.

Also, a gauge of manufacturing in the New York region expanded for a second month in March while industry managers grew optimistic about the future.

The Dow Jones Industrial Average (DJIA) shed 25 points to 14,514, snapping a 10-day winning run, its longest in more than 16 years and leaving the blue-chip index with a 0.8 percent weekly gain.

The S&P 500 Index (SPX) slid 3 points to 1,561, trimming its weekly gain to 0.6 percent. Telecommunications and consumer staples declined the most while utilities were the sole winner among its 10 business groups.

Treasury prices surged for the first time in three days, pushing 10-year yields below the 2 percent mark for the first time in six days as an unexpected drop in consumer confidence cast doubt over the strength of the economic recovery.

The US dollar dropped, easing to a one-week low against the euro after a report showed inflation was contained within the Fed’s stated target, giving the Federal Reserve reason to maintain its accommodative policies.

Meanwhile, European stocks traded lower Friday as US consumer confidence dipped in February (as eurozone finance ministers prepared to discuss a bailout package for Cyprus), but finished the week higher for a fourth time, the longest winning streak in almost three months.

Discussions about Cyprus could prove thorny as European politicians seem to be reluctant to back a bailout without significant concessions.

The Stoxx Europe 600 index slid 0.4 percent to close at 297, closing out the week 0.6 percent higher. The pan-European index has added 2.6 percent since the beginning of March.

Our Trend Tracking Indexes (TTIs) moved higher over the past week and ended up as follows:

Domestic TTI: +3.51% (last week +3.29%)

International TTI: +10.50% (last week +10.24%)

That means, until proven otherwise, the bullish trend is alive and well, and we will follow it until our trailing sell stops give us the signal to exit.

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 Steve:

Q: Ulli: Can you provide a basic explanation of your momentum (M-Index) without giving away your proprietary method?

A: Steve: All terms are described in the Glossary section, which is posted on the top of every StatSheet. In case you missed it, you can read it here:

http://www.successful-investment.com/GlossaryOfTerms.pdf

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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/

ETF/No Load Fund Tracker Newsletter For Friday, March 15, 2013

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/03/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-03142013/

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Market Commentary

Friday, March 15, 2013

DOW RETREATS AFTER 10-DAY STREAK OF GAINS; EUROPE SLIPS

US stock indexes retreated, sending the Dow Industrials lower for the first time in 11 days and containing the S&P 500 just as it neared its record close following a surprise drop in a gauge of consumer confidence.

Data released today painted a mixed picture of the economy. Equities eased up after the University of Michigan-Thomson Reuters index of consumer confidence fell to an initial March reading of 71.8 from a final 77.6 reading in February, and raising worries about the impact of higher income tax rates on household spending.

Earlier in the day, the Labor Department said consumer price index rose 0.7 percent in February, driven higher by a spike in energy prices. Annual inflation rate came in at 2 percent, within the range the Federal Reserve feels comfortable in.

Separately, data released by the Federal Reserve showed industrial production rose 0.7 percent last month after being flat in January, and beating forecasts for a 0.4 percent growth.

Also, a gauge of manufacturing in the New York region expanded for a second month in March while industry managers grew optimistic about the future.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 03/14/2013

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, March 14, 2013

Table of Content082312

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 +3.71% as part of the post election rebound.

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 into my blog for the latest updates.

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