Market Loses Steam As Euphoria Over “Incomplete” Jobless Data Fades; Europe Stocks In Rally Mode

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US markets erased gains to end nearly flat today as early optimism over upbeat economic data faded and a slump in Apple Inc weighed on technology stocks.

Earlier, stocks rose for the first time this week and commodities rallied as risk sentiment improved following a record decline in US unemployment claims. A Labor Department report showed applications for jobless benefits declining by 30,000 last week to 339,000, the lowest since February 2008, what was later touted as an anomaly as one state may not have posted their numbers.

US trade deficit widened to $44.2 billion in August as weak demand slowed American exports to their lowest level since February, a Commerce Department report showed.

A separate report revealed import prices rose faster than expected at 1.1 percent in September while export prices rose 0.8 percent during the same period.

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Heading South On Earnings Worries; Europe Retreats Over IMF Warning

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US stocks pulled back sharply Wednesday with the S&P 500 posting its fourth down session in a row, as investors became concerned over growth, or the lack thereof, after aluminum producer Alcoa cut its global demand outlook citing weak Chinese demand.

Chevron’s warning on third quarter profits weighed on the Dow Industrials after the oil conglomerate said Q3 earnings will be substantially lower than second quarter results.

Extending losses into the third straight session, the Dow Jones Industrial Average (DJIA) plunged 129 points as breadth within the blue-chip index turned negative with laggards overshadowing winners 26 to 4.

The S&P 500 Index (SPX) shed 9 points with energy hitting the ground hardest and financials fronting the gainers among its 10 business groups.

Treasuries extended their winning streak after European leaders failed to make any breakthrough over containing the region’s sovereign debt crisis, increasing the allure of safe haven assets.

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7 ETF Model Portfolios You Can Use – Updated through 10/9/2012

Ulli Model ETF Portfolios Contact

The markets received a dose of reality yesterday as fears about sharply reduced earnings took center stage followed by the IMF cutting global forecast outlooks.

Despite the 1% drop in the indexes, I believe that equity market levels are still way out of whack with fundamentals, a theme which may very well play out further over the next few weeks, unless earnings surprise to the upside in a major way.

I have finally started to update some of the past dividends for our model portfolios. Time gets the better of me, so I am not always up to date. At this point, all dividends for models #1 and #2 have been brought current, and I hope to be caught all up by next week.

The S&P dropped some 5 points since the last report, which did not affect model performance by a large margin.

Here’s the latest ETF model portfolio update:

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Equities Tumble Ahead Of Earnings Season; Europe Drops After IMF Forecast

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

Equities plunged today with the S&P 500 and NASDAQ extending losses for the third straight day as investors chose to remain on the sidelines while third quarter earnings season started unofficially.

The Dow Jones Industrial Average (DJIA) slipped 110 points, finishing lower for the second day in a row. The 30-stock blue chip index turned overtly negative with decliners outpacing gainers 27 to 3 while the S&P 500 Index (SPX) fell 14 points with the energy sector emerging the sole winner among its 10 major business sectors after oil prices rallied on heightened tensions in the Middle East.

There was no place to hide as bond yields increased (BND, TLH, TIP) the most in three weeks despite the International Monetary Fund cutting global growth forecast late Monday by 0.2 percent to 3.3 percent. The agency also trimmed growth projections for 2013 to 3.6 percent from its earlier July forecast of 3.9 percent.

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Earnings Worries Pull The Major Indexes Off Their Highs; Europe Stumbles

Ulli Market Commentary Contact

There was no surprise in this corner as Wall Street pulled back in anticipation of a weak earnings season with the 11-quarter year over year streak of gains being in jeopardy.

Even though expectations have been ‘dumbed’ down, it’s still questionable whether this very low bar can even be conquered. If not, we’re in for a pullback, which is long overdue anyway given the total disconnect from underlying fundamentals.

Analysts are looking for a correction in the area of of 3-5% no matter how earnings turn out. While I would not hold my breath, I have repeatedly said that the downside is bound to come into play despite the Fed’s attempts to the contrary. The unanswered question is what the trigger will be to give the bears the upper hand for a change.

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ETFs/Mutual Funds On The Cutline – Updated Through 10/5/2012

Ulli ETFs on the Cutline Contact

ETFs/Mutual Funds On The Cutline – Updated Through 10/5/2012

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 350 (last week 348) 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. 75 ETFs (last week 76) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 822 (last week 816) above the line and 46 below it out of the 861 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.