Last Week In Review: ETF News And Blog Posts To 8/12/2012

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 8/12/2012.

In one of the lowest volume weeks in some five years, the S&P 500 managed to eke out another gain of 1%. This lack of participation makes it very easy to distort true market direction, especially as global economic news continues to be ignored.

With just about all of Europe on vacation, the predominant thought of Wall Street traders is the next move by the ECB, and it is expected to be a big one, which is necessary to justify current market levels.

Based on history, the ECB may not pull out the widely expected ‘bazooka’ after all to solve the ever worsening European debt crisis, as is its weapon of last reserve may only be a water pistol; or worse, it may have been just empty jawboning.

If so, the markets will not take too kindly to a ‘non-solution,’ which will bring the downside into play again, especially after the S&P 500 has now produced 6 up days in a row on nothing but hope for more stimulus.

Over past week, we covered the following:

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Would The Euro Be Much Better Broken Up?

Ulli Europe Contact

The cure for the ongoing euro crisis lies in that either Germany allows above average inflation or the Club Med countries witness depression in order to adjust for relatively higher costs, says Charles Dumas, Chief Economist and Chairman of Lombard Street Research Ltd.

However, with China slowing down, German inflation is unlikely to go up since German exports depend largely on Chinese demand.

Talking of the Chinese economy, Dumas says a one percent export growth in (not seasonally adjusted) July doesn’t come as a surprise since export growth for May and June were surprisingly buoyant, which has kind of averaged out in July.

Overall, their exports have not done too badly, but it’s the domestic demand that has really gone down with inventories piling up and investments slowing down. China’s domestic demand is unlikely rise shortly because firms are facing a downward pressure on margins, impacting wages. That being said, the slowdown of Chinese domestic investment is a cause for worry since it drives German exports.

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New ETFs On The Block: Advisorshares QAM Equity Hedge ETF (QEH)

Ulli Long/Short ETFs Contact

AdvisorShares, the Maryland-based ETF issuer famous for its impressive line-up of actively managed funds, recently launched the QAM Equity Hedge ETF (QEH) to widen its product portfolio.

QEM, the 16th fund from AdvisorShares’ stable, will be sub-advised by Commerce Asset Management (CAM), a Memphis, Tennessee-based investment advisor and subsidiary of Commerce Holdings LLC that oversees approximately $700 million in assets.

QEH seeks to provide superior risk-adjusted returns by employing an actively-managed long/short investment strategy and seeks to surpass the risk-adjusted returns of approximately 50 percent of the constituents of the HFRI Equity Hedge (Total) Index.

CAM uses its proprietary research by employing Markov Processes International’s (MPI) proprietary and patented algorithms and style analysis techniques along with the patented Dynamic Style Analysis (DSA) hedge-fund software while maintaining its exposure in the benchmark HFRI Equity Hedge (Total) Index.

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08-10-2012

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, August 10, 2012

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2012/08/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-08092012/

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Market Commentary

Friday, August 10, 2012

CHINA EXPORT DATA SPOOK US, EUROPE EQUITIES; BUT THE RALLY GOES ON

US stocks managed to cling to gains Friday finishing the week higher despite disappointing economic data from China that stoked fears of a global slowdown.

The USD declined against most of its global peers as weak Chinese data rekindled ideas of coordinated stimulus measures by global central banks. The dollar index, a gauge of the USD against a basket of six global currencies, fell to 82.541 on Friday from 82.646 a day earlier.

Chinese data triggered a selloff in Europe with the main benchmark declining after a five day winning streak, led by food, oil and drug stocks. The benchmark however, closed up 1.6 percent for the week.

Economists have started to wonder about the potential effect of alleged monetary stimulus by central banks that markets are widely anticipating in September. With most of Europe away on vacation, doubt is being expressed in regards to the urgency of the European Central Bank’s intervention plan.

Spanish stocks retreated with the IBEX 35 falling 0.75 percent. Following International Energy Agency’s warning of weak global demand, Europe’s energy-related stocks declined the most. French CAC 40 lost 0.3 percent while Germany’s DAX fell 0.6 percent.  The FTSE 100 slipped 0.1 percent in London.

US Treasury yields sank in today’s session for the first time in six as Chinese exports climbed just one percent from a year earlier in July pushing investors to safe havens. Imports also grew slower-than-forecast at 4.7 percent with trade surplus shrinking unexpectedly in July. A report from the Bureau of Labor statistics showed export prices declined 0.3 percent while import priced fell 0.6 percent.

As equities drifted aimlessly over weak Chinese economic news throughout the day before securing a slim margin in the US on absolutely no volume, investors became worried on growth prospects across the world.

However, Turkish equities outperformed other markets today with the iShares MSCI Turkey Investable Market Index Fund (TUR) rising 1.44 percent on the day. TUR features among the best performing emerging market funds returning an eye-popping 36 percent year-to-date. The International Monetary Fund expects the country’s GDP to grow 2.3 percent in 2012 and 3.2 percent in 2013.

On the back of strong risk appetite, the fear-tracking volatility index has taken a beating. As the CBOE Volatility Index dropped below 15 today, the ProShares VIX Short-Term Futures ETF tumbled, losing 1.90 percent on the day. This ETF may break out sharply if markets experience a pull back next week.

Our Trend Tracking Indexes (TTIs) leaked higher following the S&P 500, and the International TTI crossed above its respective trend line.  As I pointed out in yesterday’s StatSheet, I want to see more staying power before issuing a ‘Buy’ signal for that arena.

Again, the churning to the upside this past week has been on downright atrocious volume, and I would not read too much into this until all Wall Street players, along with their European cousins, have returned from vacation.

Here’s how we ended the week:

Domestic TTI: +3.10% (last week +2.72%)

International TTI: +1.56% (last week -0.03%)

Have a great week.

Ulli…

Disclosure: No holdings

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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 Larry:

Q: Ulli: how do I cut through all the words about what happened in the past and find out what specific ETF’s to buy or sell right now?  Where are the specific buy/sell recommendations made, since I have minimal time to read so many words that don’t tell readers what investment decisions to make every day?

A: Larry: That’s one of the reasons why I set up the ETF model portfolios, which are updated every Wednesday. Here’s the latest link:

https://theetfbully.com/2012/07/7-etf-model-portfolios-you-can-use-updated-through-7242012/

You simply pick the one that meets your risk profile and set up your trailing sell stops, which will take you a couple of minutes to monitor on a daily basis. That way, you don’t have to go through the StatSheet and Cutline tables.

Hope that helps.

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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/

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

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

ETF/No Load Fund Tracker Newsletter For Friday, August 10, 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/2012/08/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-08092012/

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Market Commentary

Friday, August 10, 2012

CHINA EXPORT DATA SPOOK US, EUROPE EQUITIES; BUT THE RALLY GOES ON

US stocks managed to cling to gains Friday finishing the week higher despite disappointing economic data from China that stoked fears of a global slowdown.

The USD declined against most of its global peers as weak Chinese data rekindled ideas of coordinated stimulus measures by global central banks. The dollar index, a gauge of the USD against a basket of six global currencies, fell to 82.541 on Friday from 82.646 a day earlier.

Chinese data triggered a selloff in Europe with the main benchmark declining after a five day winning streak, led by food, oil and drug stocks. The benchmark however, closed up 1.6 percent for the week.

Economists have started to wonder about the potential effect of alleged monetary stimulus by central banks that markets are widely anticipating in September. With most of Europe away on vacation, doubt is being expressed in regards to the urgency of the European Central Bank’s intervention plan.

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 08/09/2012

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, August 9, 2012

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

The domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken above its long term trend line (red) by +3.06%. A break back below it will generate a Sell signal to move out of all domestic equity positions. Be sure to tune into my blog for the latest updates.

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