Pull-Back Is Gaining Momentum

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

Despite an early rally following upbeat European economic data, the major averages were unable to hold their flat lines past the opening 90 minutes, reversed course to close lower for a third-straight trading day.

The Standard & Poor’s 500 Index spent the entire day in a steady decline as minor bounces were met with aggressive selling. The Index lost 13 points (0.8%) to 1,613; while the Dow Jones Industrial Average declined 127 points (0.8%) to 14,995, and the Nasdaq Composite tumbled 37 points (1.1%) to 3,400.

Volatility spiked by exacerbated skepticism of the continuity of global central bank stimulus efforts. All 10 main industries in the S&P 500 retreated. Utility stocks fell 1.1 percent, extending a six-week decline to 11 percent. Cyclical sectors led to the downside as financials and discretionary shares ended with losses near 1.0%. Meanwhile, the defensive cousin of the discretionary space, consumer staples (XLP), outperformed the broader market with a loss of only 0.6%.

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7 ETF Model Portfolios You Can Use – Updated through 6/11/2013

Ulli Model ETF Portfolios Contact

Another volatile five trading sessions, but the week ending rally saved the day as the S&P 500 only lost 0.31%.

Uncertainty about the Fed’s possible tapering continued, while interest rates are inching higher wreaking havoc with some of the bond ETFs. Even VNQ was hit hard, triggered our trailing sell stop and was sold on 6/5/13.

So far, equity indexes, like the widely followed S&P 500, have come off their highs but have not reacted as negatively to higher rates as is usually the case. Historically, bonds have been the canary in the coal mine as far as equity direction is concerned. We’ll have to wait and see if it plays out that way again.

I think we’re in a crucial phase of this bull market where the indexes have attempted to move higher but, so far, these attempts have resembled dead cat bounces with no follow through to the upside. When things get this uncertain, it’s wise that you revisit your sell stop points again and execute them as they get triggered.

Here’s the latest ETF Model Portfolio update:

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All Red—All Day

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

Stocks slid in a volatile session today, followed the global concerns surrounding the limits of additional stimulus from central banks from around the world. Major indexes fell more than 1 percent after the open but shaved most of the losses by midday to flirt with positive territory, only for the selling to resume towards the session’s end.

The Dow Jones Industrial Average declined 117 points (0.8%) to 15,122, the S&P 500 Index ended lower for a second day, lost 17 points (1.0%) to 1,626, and the Nasdaq Composite tumbled 37 points (1.1%) to 3,435.

Overseas concerns contributed to a rise in global interest rates, which, in turn, fueled the selling of equities. The major indexes dropped early followed the disappointing reaction to the Bank of Japan’s (BoJ) monetary policy decision, where it will maintain its current aggressive stimulus stance, which includes asset purchases. Although no major changes were expected, some were disappointed that the central bank did not offer any measures to combat the recent bond market volatility.

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No Convictions—Markets Slip In Quiet Session

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

Major market index ETFs had an up and down Monday as they moved above and below the flat line in choppy action, finishing mixed and nearly flat, as a plethora of divergent global economic data and an empty domestic docket met an upgrade of the U.S.’ credit rating outlook by Standard & Poor’s.

The market did not provide a lot of trading excitement today. The Dow Jones Industrial Average declined 10 points (0.1%) to 15,238, the S&P 500 Index lost nearly a point to 1,643, and the Nasdaq Composite gained 5 points (0.1%) to 3,474.

There was some excitement when it was announced before the open that Standard & Poor’s raised its U.S. outlook to Stable from Negative, citing a lessening of downside risks to its AA+ rating for U.S. sovereign debt.  The reaction to the revision of the U.S. sovereign credit outlook gave stocks only a short-lived lift, as a concurrent rise in long-term interest rates seemed to limit the stock market’s enthusiasm for the outlook change. The yield on the 10-year note moved up to 2.23%, or roughly six basis points higher than where it settled on Friday.  There were no major U.S. economic reports scheduled to be released today.

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ETFs/Mutual Funds On The Cutline – Updated Through 6/7/2013

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 313 (last week 316) 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. 57 ETFs (last week 58) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 804 (last week 809) above the line and 55 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 6/9/2013

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 6/9/2013.

It was a roller coaster ride on Wall Street, as the bears took over for the first time in a while, but the bulls battled back and, in the end, all losses were recovered while the S&P 500 managed to eke out a gain of 0.7%.

It was one of those weeks that could have ended very badly with the Dow slipping below 15,000 and the S&P rapidly approaching the 1,600 level. Suddenly, the dip buying crowd appeared and, in anticipation of a better than expected employment report, the major indexes rallied sharply during the last hour on Thursday with momentum picking up Friday; so, we closed at the day’s highs.

Over past week, we covered the following:

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