Ulli... The ETF Bully

ETFs/Mutual Funds On The Cutline – Updated Through 1/18/2013

Ulli Monday, 21 January 2013, 6:01 AM ETFs on the Cutline Contact

ETFs/Mutual Funds On The Cutline – Updated Through 1/18/2013

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 373 (last week 363) 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. 87 ETFs (last week 84) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 787 (last week 781) above the line and 72 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 1/20/2013

Ulli Sunday, 20 January 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 1/20/2013.

Despite option expiration day last Friday, trading did not show much volatility for the first few days until the S&P 500 broke out to the upside and ended up gaining about 1% for the week.

The theme continued to be the same as intraday pullbacks were minor and afternoon lift-a-thons a given. We are now in a trading environment where it has almost become impossible to look for a pullback to add new positions as temporary ‘down periods’ last only minutes before the markets are being pushed up again.

Nothing goes up forever, and this market will not be an exception. We may very well be heading further into bubble territory, but reality has to to set in sooner or later.

If you are participating in this rally, be sure to have your exit strategy in place, because the exit doors will get crowded in a hurry once the rush starts. Again, while the timing of it is unknown, you need to be prepared.

Over past week, we covered the following:

One Man’s Opinion: Will Fiscal Tightening Cause A Recession In 2013?

Ulli Sunday, 20 January 2013, 6:00 AM Market Commentary Contact

Fiscal tightening won’t cause a recession in 2013, says Michael Darda, chief economist and chief market strategist at MKM Partners. The latest unemployment benefit claims number fell to a five-year low and is a leading indicator for the labor market. Housing starts are strong though they are at a low level. The upswing is gaining momentum indicating some firming rather than a deceleration, Michael noted.

Expectation for economic growth is pretty subdued for 2013; the Bloomberg consensus is two percent, similar to what was witnessed last year, he noted. But the forward financial and monetary indicators are saying the growth forecast may be 100 basis points (one percent) too low despite the so-called fiscal drag, he added.

Asked if he has a two-pronged strategy to deal with the debt-ceiling debacle: one when we get through this debacle and one until we hit that debt-ceiling, Michael said that could be problematic as was experienced during the so-called fiscal cliff. A lot of investors chose to move to the sidelines till the issue was resolved while the market went through new highs during the so-called crisis, he noted. So it’s not probably wise to design a strategy around the debt-ceiling. If the outlook is upbeat, you’d rather buy on weakness rather than selling on strength.

New ETFs On The Block: Global X Junior MLP ETF (MLPJ)

Ulli Saturday, 19 January 2013, 6:01 AM Master Limited Partnerhips Contact

Global X Funds, the New York-based provider of exchange-traded funds famous for niche strategies, has launched the Global X Junior MLP ETF (MLPJ), a fund that targets the small-cap segment of the Master Limited Partnership (MLP) segment.

MLPJ will track the Solactive Junior MLP Index, a benchmark that measures the performance of US-listed energy and resource MLPs involved in everything from mining to production of natural resources to storage, transportation and marketing with market capitalizations of between $200 million and $2.5 billion.

MLPs are typically operators and owners of energy and resource infrastructure assets such as refineries, storage tanks and oil and gas pipelines and were first created in the mid 80s.

A growing number of MLPs are also involved in the exploration and production of energy assets. The partnerships trade like equities and have been strong performers lately because of the strong tax-efficient cash distributions they offer. These entities don’t attract federal income tax liability since they derive most of their revenues from steady fees like real estate rents, transportation and storage charges, cash dividends and interest incomes, etc.

01-18-2013

Ulli Friday, 18 January 2013, 6:33 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, January 18, 2013

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2013/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01172013/

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Market Commentary

Friday, January 18, 2013

DOW RISES TO FIVE-YEAR HIGH AS US STOCKS RALLY; EUROPE DRIFTS MOSTLY LOWER

US stocks on Wall Street rallied Friday, sending the Dow Jones Industrial Average to a five year high and logging gains for a third consecutive week, as House Republicans plan to vote on a three-month increase on the debt limit and investors analyzed several corporate earnings report.

Equities received a jolt of optimism from Washington after House Majority Leader Eric Cantor of Virginia said Congress members won’t get paid if the House or Senate doesn’t pass a budget by the end of the proposed three-month extension. The US is expected to hit the borrowing limit of $16.4 trillion sometime between mid-February and early March.

Stocks had sunk in early trading after data released showed the University of Michigan’s consumer sentiment index fell to 71.3 in January from 72.9 the previous month. Economists had expected a reading of 75.

Economic news from China provided some much-needed relief after data released by the world’s second largest economy showed GDP grew at 7.9 percent in the fourth quarter, slightly beating expectations of a 7.8 percent increase.

The Dow Jones Industrial Average (DJIA) rose 54 points; up 1.2 percent for the week. General Electric led Friday’s gainers with a 3.5 percent rise as fourth quarter earnings and revenues exceeded estimates. Orders for industrial equipment grew two percent for the quarter while order backlogs hit a record $210 billion.

The S&P 500 Index (SPX) added 5 points to finish at 1486, its highest close since December 2007 and up one percent for the week. Industrials paced the gains while technology was the sole laggard among the index’s 10 major industry groups.

Treasury prices rose, pushing 10-year yields down from the highest level in a week over speculations US lawmakers will fail to reach an agreement over raising the nation’s debt limit, spurring demand for safe haven assets.

Benchmark notes had briefly trimmed gains amid reports the House will extend an increase in the debt ceiling temporarily for three months. The gains were extended after Speaker John Boehner said a budget that allows spending cuts must be passed before any long-term deal is reached.

European stocks meanwhile closed lower after a choppy trading session Friday as a weak reading on US consumer confidence offset the optimism over a stronger-than-expected Chinese economic growth data.

In the ETF space, volatility-linked funds were on the back foot as equity averages hit five-year highs on Friday. The ProShares VIX Short-term Futures ETF (VIXY) slumped 6.19 percent after the CBOE Volatility Index fell 8.2 percent to 12.46, the least since April 2007. The ProShares VIX Mid-Term Futures ETF (VIXM) also slipped, shedding 3.41 percent for the day.

Asia-related ETFs were also on the rise following China’s strong Q4 GDP reading. The iShares FTSE China 25 Index Fund (FXI) surged 0.82 percent while the SPDR S&P China ETF (GXC) picked up 0.45 percent.

The iShares MSCI Japan Index Fund (EWJ) rose 0.36 percent while the iShares MSCI Emerging Markets Index Fund (EEM) added 0.22 percent on the day.

Our Trend Tracking Indexes (TTIs) moved higher with the indexes and closed the week as follows:

Domestic TTI: +3.10% (last week +2.73%)

International TTI: +10.45% (last week +10.16%)

The market’s up move has been relentless, and we are bound to enter bubble territory, as index levels are disconnected from economic reality, at least to my way of thinking. Have your exit strategy prepared should this vertical ascent come to an end all of a sudden.

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 Chris:

Q: Ulli: Quick question: Looking at your index tracker trend lines, is it safe to assume, since the Int’l TTI is +10%, that you view int’l ETFs as a better investment over the near term vs. domestics?

A: Chris: You could look at this way, but I don’t. The International TTI has gone up almost vertical, which means that it would most likely correct more severely once the bottom in Europe drops out. I believe that it will, I just don’t know the timing of it.

As such, my preference would be the Domestic Market, which is also at “unreasonable” levels to underlying fundamentals but not to the extreme Europe is.

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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/