Indexes Slip As Fiscal Cliff Reality Looms; Food For Thought On Who Is Guilty

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

Fears about the looming fiscal cliff are taking on a new dimension as there is exactly one week left for the President and Congress to come together and avoid the mandatory spending cuts and tax increases.

On extremely low trading volume, the equity indexes gave up ground for the second day in a row during today’s shortened session. Despite some occasional jawboning out of Washington, there simply seems to be no willingness on either side to come up with some reasonable solution  it all appears to be nothing more than a face saving effort.

For a spot on analysis,  including an identification of the guilty party, Mark Grant, author of Out of the Box, has some food for thought in “The Sleeper Must Awaken:”

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ETFs/Mutual Funds On The Cutline – Updated Through 12/21/2012

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 349 (last week 341) 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. 82 ETFs (last week 79) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 700 (last week 673) above the line and 159 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 12/23/2012

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 12/23/2012.

Anxiety about the fiscal cliff outcome was overridden by continued hope that a compromise would be in the cards which lifted the S&P 500 by about 1%.

Friday’s sell off brought back the sobering reality that ‘compromise’ is a dirty word as nothing was accomplished on Thursday night with the result that the markets headed south but not as severely as it originally appeared. I happened to be watching the futures and saw a flash crash take the Dow briefly down by 350 points while the S&P 500 dropped about 40 points.

By Friday morning things had calmed down a bit and helping the indexes later on were well timed news reports that the warring parties were still engaged in conversations. So, hope is still on the agenda, and the drama will continue for the remainder of this year.

Over past week, we covered the following:

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One Man’s Opinion: Can We Live On Stimulus Forever?

Ulli Market Commentary Contact

The Federal Reserve is clearly in this difficult situation where it needs to express its message more forcefully, because it’s not about how much quantitative easing it does, but the message behind it, says Kenneth Rogoff, an economics professor at Harvard.

So, he certainly welcomes their change towards focusing on final outputs like employment and inflation, though he would have liked to see a little bit looser inflation target because the Fed needs to have inflation targets up to drive investments, he noted.

But the latest development (of explicitly tying unemployment rate to inflation rate) is certainly a welcome change and the evolution process is likely to continue, he added.

Asked if the economy needs any stimulus, either from the Fed or the Congress, Ken said the economy can’t survive on stimulus forever. But withdrawing it too rapidly in a fragile economy makes no sense, and the right plan would be to gradually tighten the monetary policy over a long period, he noted. But the real problem is that the system is so paralyzed that it isn’t being able to be creative.

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New ETFs On The Block: Advisorshares Pring Turner Business Cycle ETF (DBIZ)

Ulli ETF News Contact

AdvisorShares, the Bethesda, Maryland-based funds provider of non-index tracking products, has announced the launch of the AdvisorShares Pring Turner Business Cycle ETF (DBIZ), an actively managed fund that seeks long-term growth and capital appreciation across different economic and market cycles through the application of business cycle, technical and fundamental analysis.

DBIZ will be managed by Pring Turner Capital Group, the Walnut Creek, California-based registered investment advisor recognized internationally for its application of proprietary business cycle research. The fund utilizes its business cycle research to proactively change asset allocations and sector-emphasis to optimize returns and minimize risks. DBIZ will invest in three primary asset classes comprising of stocks, bonds and commodities across a wide range of business sectors.

To achieve its investment objective, the fund may invest in US and foreign equity securities, including common and preferred stocks, corporate debt securities rated BBB and above, American Depository receipts, affiliated and unaffiliated exchange-traded funds, exchange-traded notes (ETNs), and cash and cash equivalents. DBIZ may invest in securities of any market sector and in any capitalization range as deemed necessary to achieve its investment objective.

ETF/No Load Fund Tracker Newsletter For Friday, December 21, 2012

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/2012/12/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-12202012/

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Market Commentary

Friday, December 21, 2012

INDEXES SLIDE AS HOUSE SCRAPS TAX VOTE; EUROPE SINKS

US equity indexes tumbled Friday, paring weekly gains, after House Republicans canceled a vote on higher taxes for top earners to avoid going over the fiscal cliff didn’t find enough support, sending budget negotiations deeper into turmoil.

The Congressional Budget Office forecasts a recession in the first half of the next year should the Congress and the White House fail to reach a deal.

On the economic news front, data released by the US government was positive Friday, especially a 0.7 percent hike in orders for durable goods in November. Separately, a Commerce Department report showed spending by US consumers rose 0.4 percent in November while personal income increased 0.6 percent in November, both figures coming in well above expectations.

Fiscal cliff worries, however, found their way into a gauge of consumer sentiment, dragging it down in December. The Michigan University/Thomson Reuters consumer sentiment index declined to 72.9, the lowest reading since January.

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