Ulli... The ETF Bully

ETFs/Mutual Funds On The Cutline – Updated Through 2/8/2013

Ulli Monday, 11 February 2013, 6:00 AM 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 367 (last week 368) 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. 83 ETFs (last week 85) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 808 (last week 810) above the line and 51 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.

P.S.: Please note that the DD% columns for OIH, RTH and PPH have not been adjusted for recent splits.

Last Week In Review: ETF News And Blog Posts To 2/10/2013

Ulli Sunday, 10 February 2013, 8:00 AM 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 2/10/2013.

Monday’s sell off in the markets proved to be short lived as upward momentum resumed and, while the indexes spent the rest of the week meandering sideways, the S&P managed to add 0.33% from last Friday’s close while the Dow had its first weekly negative close this year.

Any sort of correction would be a healthy thing given the run we’ve had since the November sell off. Otherwise, if this spike to the upside continues, the eventual awakening could be rude and financially painful.

Some bond ETFs have already come off their highs and broken their long term trend lines but have not triggered their trailing sell stop points. TLH, in which we have positions, has come close a few times.

Higher yields equate to higher interest rates and lower bond prices, but it’s too early to tell whether this reversal is temporary. If it’s not, and this low interest period is slowly coming to an end, there is a good chance that stocks will follow and head south as well.

Over past week, we covered the following:

David Stockman: Housing Boom Is Not Sustainable; Another Bubble Waiting To Burst

Ulli Sunday, 10 February 2013, 6:00 AM Market Commentary Contact

Many believe the robust housing data signals a long-term recovery in the struggling housing market and is a bright spot in the overall broader domestic economic recovery.

The euphoria is not without a basis as data supplied by the National Association of Realtors show existing home sales in December shot up 12.8 percent over the same period in 2011 while the total number of sales rose to a five-year high in 2012. The annual increase in existing home prices also surged to the highest level since 2005, with the median home price up 11.5 percent in December over the same period in 2011.

But not everybody is convinced the recent recovery is sustainable and believes it is another bubble in the making. David Stockman, former director of the Office of Management and Budget in the Reagan Administration is one of the skeptics.

David believes we are not witnessing a real, sustainable and organic recovery because in a world of medicated money by the central bank, things are not what they appear to be. There is some uptick in volume and prices are starting to come out from the sub-basement where it was down 30 percent. But it is happening in the most speculative former of sub-prime markets where massive amounts of fast money is rolling in to buy or rent on a speculative basis for a quick trade and as soon as they conclude that prices have moved enough to produce a return, they’ll be gone as fast as they came, he noted.

New ETFs On The Block: Credit Suisse Gold Shares Covered Call ETN (GLDI)

Ulli Saturday, 9 February 2013, 6:00 AM Covered Call Strategy Contact

Credit Suisse launched a new exchange-traded note (ETN) last month that offers investors exposure to price movement of gold in addition to monthly income distributions. The Credit Suisse Gold Shares Covered Call ETN (GLDI) is the first gold fund in the US that deploys a covered call strategy.

GLDI is linked to the Credit Suisse NASDAQ Gold FLOWS 103 Index, FLOWS stands for Formula Linked Over Write Strategy), a benchmark representing a hypothetical rolling covered call strategy (also known as buy-write strategy) on a notional long position in SPDR Gold Shares (GLD). The fund simultaneously sells out of money call options on the open positions on a monthly basis with a strike price that is approximately 103 percent of the price of GLD.

The advantage of this strategy is that GLDI generates periodic (monthly) cash income from the sale of options (in the form of premiums) that a direct long-only strategy would not, and helps offset losses when market price of gold is falling. However, in a rising market, profits generated by the long positions in the underlying asset (GLD in this case) can be limited if the sold call-options become ‘in the money,’ and the profits will be capped at three percent per month. This makes the product ideal for investors keen to preserve their capital from downside risks while seeking some regular income. Also gold-linked funds tend to offer effective hedge against inflation.

02-08-2013

Ulli Friday, 8 February 2013, 6:17 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, February 8, 2013

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2013/02/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-02072013/

————————————————————

Market Commentary

Friday, February 8, 2013

US AND EUROPE RISE ON TRADE DATA

US stocks advanced Friday on strong trade data, pushing the S&P 500 to the highest level since November 2007 though the Dow Industrials retreated for the week, snapping a five-week long winning streak.

Stocks received some support from economic data in early trade. A report by the Commerce Department showed trade deficit narrowed to $38.5 billion in December from $48.6 billion in the previous month, thanks to record exports of petroleum products. Today’s better-than-expected trade data may lead to revisions of fourth-quarter GDP numbers into positive territory.

Trade data released by China’s customs administration showed exports jumped 25 percent and imports climbed 29 percent, adding to evidence of a growth rebound in the world’s second largest economy.

The Dow Jones Industrial Average (DJIA) rose 49 points to 13,993, after rising to an intraday high of 14,022 though it recorded its first weekly decline in six, dropping 0.1 percent for the week while the S&P 500 Index (SPX) added 9 points and climbed 0.3 percent.

Treasuries were little changed on Friday though the benchmark 10-yield posted its biggest weekly decline since November after political leaders agreed to trim the European Union budget, adding to concern that the world’s largest trading bloc will struggle to expand, spurring demand for safe-haven assets.

European stocks surged ahead Friday after robust trade data from the US and China boosted risk sentiment, with banks leading the northward march.

The Stoxx Europe 600 index added 1.2 percent to close at 287.34. Friday’s jump, however, was not good enough to push the index in the green territory for the week and the pan-European index extended losses for the second straight week.

In the ETF space, the Market Vectors Vietnam ETF (VNM) was one of the biggest gainers, adding 3.05 percent for the day.

The Invesco Powershares QQQ Trust Series (QQQ) also jumped, adding 1.03 percent for the day.

Our Trend Tracking Indexes (TTIs) offered a mixed picture as the Domestic TTI headed higher while the International TTI retreated. Both closed the day as follows:

Domestic TTI: +3.35% (last week +3.23%)

International TTI: +11.04% (last week +12.31%)

Have a great week.

Ulli…

————————————————————-

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 John:

Q: Ulli: I’m in the UK and really appreciate your insights to the market in general. I have a question – when do you add to positions? Do you wait for the market to pull back or would you, for example, add funds on a monthly basis. If so would you do so at the moment with markets so over extended? Hope you can help.

A: John: Well, the ideal time is always at the beginning of a buy cycle. However, once time has passed, I try to add new money on down days. Say, we are in bullish territory with my TTI, and I want to add some more VTI, then I would wait for a day when equities are pulling back and place my order at that time.

If I am looking to add a bond position, I use the same approach in that I look for a down day in bonds. For most investors, I recommend a balanced portfolio as opposed to an outright equity one. While it gives you a lesser return, it also decreases the risk quite a bit.

Personally, I am not in favor of adding small amounts on a monthly basis. My preference is to wait until I have say $5k or more and then invest it in a fund/ETF that is appropriate at the time. Again, there is no right or wrong; it’s simply my preference.

———————————————————-

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/

———————————————————

Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/