I will be traveling over the next few days, including the weekend, and will return late Monday.
I should be able to get most posts out on time, with the exception of today’s market commentary. I anticipate to be able to have it online by around 8 PM PST.
Ulli…
Continued weakness caused by Europe’s uncertainties pulled the S&P 500 down another -2.4% since last week’s ETF Model Portfolio update.
Besides the fear of contagion from the Greek debt crisis along with no current government and new elections slated for June 16, markets are faced with having to deal with the lack of concrete solutions in sight.
Not helping matters domestically was JPM’s sudden and unexpected $2 billion trading loss, which just underscores the fact that derivatives trading and risk management are two things that don’t necessarily function in tandem. There will be much more fallout in my opinion.
Today’s after hours surprise came from JC Penny, which posted a loss, with shares trading down by some 13%. My point is that momentum is slowing, and you’d be well advised to pay attention to your trailing sell stops.
Here’s the latest update:
US equity ETFs retreated Tuesday, while the Dow inched towards its four-month low as developments from eurozone kept investors edgy despite steady economic numbers from the home-front.
US retail sales grew by 0.1 percent in April, while CPI reading changed little for the month. The New York Empire State Index showed manufacturing bounced bank in May, zooming to 17.1 in May from 6.6 in April.
US Treasuries yields traded close to seven-month lows, with the 10-year benchmark yields rising slightly after European statistics office reported little GDP growth in the region in Q1, beating a 0.2 percent contraction forecast.
US equities marched south Monday with all three indexes losing about one percent as markets remained concerned over the future of the currency-union in Europe and the safety of American banks following JP Morgan’s unexpected 2-billion trading loss.
Greece’s political parties struggled to form a coalition over the weekend, fuelling fears of a re-election that is expected to swing towards the extreme lefts who have vowed to reverse the country’s austerity measures, risking its continuation in the eurozone. Long-term, that would be the best solution for Greece.
The Dow Jones Industrial Average (DJIA) tumbled 125.25 points while the S&P 500 Index (SPX) lost 19.64 points to settle at 1338.35 with the financial sector faring the worst among the 10 business groups.
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 274 (last week 309) 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. 46 ETFs (last week 58) have managed to move into in bullish territory after the recent run up.
The third report covers Mutual Funds on the Cutline. There are currently 748 (last week 789) above the line and 113 below it out of the 861 that I follow.
Take a look:
2. ETF High Volume Cutline Report
In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.
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 5/13/2012.
Much uncertainty about the worsening European debt crisis pulled the benchmark S&P 500 index lower by some 1.2% for the week. Overall, upward momentum has slowed, especially in the international area as shown by my International Trend Tracking Index (TTI), which is now hovering on the plus and minus side of its long term trend line by a very small percentage.
Towards the end of the week, news of JPM’s trading losses, so far estimated to be in the $2 billion range, caused nervousness on Wall Street. The big question in my mind is whether that was an isolated incident or if there is more to come. I my guess is the latter but it may take some time for the other cockroaches to emerge.
This week, we covered the following: