Ulli... The ETF Bully

ETFs/Mutual Funds On The Cutline – Updated Through 7/13/2012

Ulli Monday, 16 July 2012, 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 196 (last week 235) 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. 34 ETFs (last week 38) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 419 (last week 625) above the line and 442 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.

Last Week In Review: ETF News And Blog Posts To 7/15/2012

Ulli Sunday, 15 July 2012, 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 7/15/2012.

A lot of bobbing and weaving in the markets, but Friday’s rebound pulled the major indexes to within the unchanged line.

Europe was relatively quiet, so it was somewhat amazing to see the S&P 500 pull itself out of the hole considering the dire news feed in general. We witnessed a disappointing GDP from China, no stimulus lollipop, the worst consumer sentiment this year and higher inflation.

As a result, the markets rallied; at least for one day. Go figure…

This week, we covered the following:

Glenmede Investments: The Economy Is In A Growth Scare, But Not Scary Enough For The Fed

Ulli Sunday, 15 July 2012, 6:00 AM Market Commentary Contact

The June 19-20 meetings records of the Federal Open Market Committee disappointed the markets, as many thought that there was not enough emphasis on quantitative easing. No surprise there as hope of QE has been the only thing propping up the S&P 500 over the past couple of years.

There is a general perception that further asset purchases are “required” by the Fed to kick-start the jobs markets. Jason Pride, director of investment strategy at Glenmede Investments at Philadelphia thinks even though the economy is in a growth scare, it’s not scary enough for the Federal Reserve to launch another round of assets purchase program.

Agreeing that 10-year yields on US Treasury notes, currently hovering around 1.50 percent, suggest that investors are scared about the economy and have turned defensive to protect capital, he said things are going to be difficult for some time due to slowdown in growth. However, it doesn’t mean growth has turned negative. It’s the negative growth or deflation that the Federal Reserve needs to react to, Jason added.

New ETF On The Block: Advisorshares Global Alpha & Beta ETF (RRGR)

Ulli Saturday, 14 July 2012, 6:00 AM Managed ETFs Contact

Bethesda, Maryland-based ETF issuer AdvisorShares has launched another actively managed fund, the AdvisorShares Global Alpha & Beta ETF (RRGR), marking its 15th actively managed fund and the ninth equity product overall.

This is the first product to be managed by the Arizona-based advisory firm Your Source Financial. YSF is run by experienced money manager and popular financial blogger Roger Nusbaum, who has achieved decent fame through “Random Roger’s Big Picture” blog.

The fund intends to invest in a diversified mix of US and global assets with a significant allocation (more than 80 percent) in domestic and international equities, indicating a fairly bullish outlook and looks to outperform major benchmarks such as the Barclays Capital Aggregate Bond Index and the S&P 500 through the firm’s proprietary security selection process that uses a top-down approach of tactical assets allocation that narrows its focus down to sectors, industries or countries and ultimately to individual firms.

This ensures effective risk mitigation and lower volatility since the strategy aims to take advantage of a unique trend or circumstance using assets not correlated to the core holding.

07-13-2012

Ulli Friday, 13 July 2012, 5:17 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, July 13, 2012

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2012/07/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-07122012/

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Market Commentary

Friday, July 13, 2012

US STOCKS BOUNCE BACK ON BANK EARNINGS; IYG RISES, VIXY CRASHES

US stocks rallied Friday with the Dow Jones Industrial snapping a six-day losing streak as banking stocks jumped following a stronger-than-anticipated earnings result from JP Morgan. The bank posted $5 billion in earnings in Q2 despite conceding $5.8 billion in trading losses so far this year through its “London Whale” trader. Let’s see what the effect will be next quarter.

US debts lost allure as 30-year Treasury bonds bounced off from near-record lows amid speculations global central banks initiate stimulus measures to prop up growth. We will find out soon about that possibility which, during the last rumor, ended up being nothing but postponed disappointment.

The Dow Jones Industrial Average (DJIA) surged 1.6 percent, closing 0.4 percent higher over the prior week. Within the Dow’s 30-component index, all but one ended in the positive territory, led by the nation’s largest bank JP Morgan (JPM), up six percent on the day.

The S&P 500 Index (SPX) rose 1.7 percent, up only 0.2 percent over last Friday. Led by the financial-sector index, all of the 10 business groups finished in the green.

Treasuries fell as yield on the benchmark 10-year securities rose 0.02 percentage points to 1.49 after a Labor Department report showed producer price index gained 0.1 percent for the first time in four months. Yield on 30-year bonds climbed 0.01 percentage point to 2.57 percent in late afternoon trading.

ETFs in the news:

As financials rallied following banks’ earnings release, major equity ETFs reversed a week-long losing spree on Friday. Markets were also upbeat that China would hopefully announce stimulus measures after China’s GDP grew 7.6 percent in Q2, year-on-year, against 8.1 percent in the first quarter. This was the country’s slowest growth since 2009.

The iShares Dow Jones US Financial Services Index Fund (IYG) surged 3.03 percent after major US bank stocks rallied following JP Morgan’s 6 percent jump on the day. Bank of America, Citigroup, Goldman Sachs and Morgan Stanley all grew between 3 and 6 percent on the day.

Other financials-related funds such as the Financial Select Sector SPDR Fund (XLF) and SPDR KBW Bank ETF (KBE) also made impressive gains, rising 2.80 percent and 2.69 percent, respectively.

Wagers on further stimulus increased after Federal Reserve Bank of Atlanta President Dennis Lockhart said more assets purchase by the Fed might be coming sooner than anticipated.

The so-called fear-tracking CBOE Volatility Index (VIX) slumped 8.67 percent as risk sentiments improved, pushing the ProShares VIX Short-Term Futures ETF (VIXY) down by 5.77 percent. VIXY is down 60.22 percent year-to-date and trading below its 52-week low level.

Our Trend Tracking Indexes (TTIs) dropped early in the week but then recovered with the markets ending this Friday as follows:

Domestic TTI: +2.56% (last week +2.63%)

International TTI: -2.73% (last week -2.23%)

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 Don:

Q: Ulli: I’ve been pouring over your publications and website to more fully educate myself on how to be a better investor. I am learning a lot, but there is one key concept I am still fuzzy on. Would you please explain M-Index more fully?

I gather that the M stands for momentum and that higher numbers indicate higher momentum. But, where do the numbers come from? How are they derived? And especially, what do we need to know about those numbers when it comes to making investment decisions? Is it wise to only invest in funds that have a larger momentum number? Is there a range that indicates a sweet spot; for example higher than 5 but lower than 20?

Thanks again for being willing to share your knowledge. It is very much appreciated!

A: Don: All terms are explained in the Glossary posted at the top of the weekly StatSheet. In case you missed it, here’s the link:

http://www.successful-investment.com/GlossaryOfTerms.pdf

As I said, the higher the number the more volatile the ETF. There is no such thing a sweat spot. I use it to merely compare one ETF to another. In the end, the best way for most investors is to use one of my Model ETF Portfolios (when the domestic TTI is in Buy mode), which gives you a good balance of bond and equity holdings. Use one that fits your risk tolerance.

When that is combined with my recommended sell stop discipline, you have a better handle on downside risk, which is essential in today’s volatile global market environment.

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https://theetfbully.com/personal-investment-management/