7 ETF Model Portfolios You Can Use – Updated through 9/11/2012

Ulli Model ETF Portfolios Contact

After ECB’s Mario Draghi’s “all out” announcement last Thursday, the markets ripped higher with the S&P 500 gaining some 2% since last week’s portfolio report.

I guess you could say he pulled out the big guns but, as has been the case all too often in the past, it’s only talk so far. As we’ve come to be accustomed to, the markets did not care, and they reacted with a rally on the mere intention, no matter how many hurdles remain to turn his proposal into a feasible and executable plan.

Two more market moving events are on the agenda, namely the German high court’s announcement as to the legality of the ESM today, which is followed tomorrow by the Fed’s announcement on the next QE 3 program, which is highly anticipated and already priced in the markets.

In the meantime, here’s the latest ETF model portfolio update:

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US Stocks Rebound Ahead Of FOMC Meet, German Court Decision; Europe Stocks Push Higher

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US stocks fought back Tuesday, rebounding from yesterday’s pullback as investors grew positive ahead of a German constitutional court ruling on the EU-wide bailout fund while speculations grew the US Fed will announce further stimulus after its two-day FOMC meeting starting tomorrow.

Treasuries retreated, pushing yields higher even though US auction for $32 billion of three-year notes drew record demand. Ratings agency Moody’s Investor Services had warned hours earlier it would cut US credit rating if the country failed to improve its debt-to-GDP ratio in next year’s budget negotiations.

European stocks rallied in late trade as risk appetite improved ahead of the US Fed’s two-day FOMC meeting starting tomorrow. The pan-European Stoxx Europe 600 index added 0.3 percent after trading in the negative territory for most of the day.

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Equity Indexes Fall As Concern Over Europe Overshadows Stimulus Bets; European Stocks Decline; German Court Ruling On Deck

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

Equity Indexes pulled back today after surging to multi-year highs Friday as risk sentiment weakened amid news reports that Greece has initiated talks with creditors after its ruling-coalition failed to reach an agreement over spending cuts.

Markets are jittery ahead of Wednesday’s German high court’s decision on the validity of the EUR 500 billion European Stability Mechanism (ESM) even as speculation over the prospect of another round of assets purchase by the Fed rose (expected Thursday) following weak employment data.

The Dow Jones Industrial Average (DJIA) lost 52 points while breadth within the blue-chip index turned negative with decliners eclipsing gainers 19-to-11. The S&P 500 Index (SPX) fell 9 points, or 0.6 percent, with telecommunications the sole gainer and tech hitting the ground hardest among its 10 business groups.

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ETFs/Mutual Funds On The Cutline – Updated Through 9/7/2012

Ulli 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 350 (last week 317) 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. 74 ETFs (last week 64) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 825 (last week 781) above the line and 36 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 9/9/2012

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 9/9/2012.

After the ECB’s Draghi pulled out the big guns, the markets went into overdrive pushing the major indexes to multi-year highs. As I pointed out, nothing has actually been chiseled in stone; so far his ideas are merely promises and, as always, the devil will be in the details with Germany ultimately having the last word.

As we’ve witnessed over the past few months, neither the ECB nor the Fed really need to take any action to push the markets higher; the mere mention of the fact that new versions of QE still exist is enough to put a floor under equities.

It appears that current stock market levels are no longer a function of economics, but simply the result of central planning, as Wall Street has become addicted to the next fix from the Fed, whatever that will be.

Makes me wonder where the markets would be at, once the Fed runs out of ammunition and Wall Street has to face reality and accept the fact that either stimulus no longer exists or its effects have been negated. It will not be a pretty moment.

Over past week, we covered the following:

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ECB’s Intended Bond Purchases Will Calm The Markets; But For How Long?

Ulli Market Commentary Contact

The European Central Bank’s decision to buy unlimited bonds from the secondary markets for the peripheral economies was the right decision, since it comes with strong conditions that will result in structural reforms and fiscal discipline, says Anders Aslund, Senior Fellow at the Peterson Institute for International Economics.

The so-called Outright Monetary Transactions or OMT by the central bank does not violate the Maastricht Treaty, which prohibits direct purchasing of government bonds since the bank will buy them from the secondary market.

Germany’s opposition that this amounts to lending the profligate governments, albeit indirectly, is thus allegedly not maintainable. Moreover Chancellor Angela Merkel herself backed the plan couple of weeks ago, he noted.

The OMT kicks in only when the struggling countries make a formal request for international aid, but neither Italy nor Spain has made any formal request so far. Is it because of the stigma attached?

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