7 ETF Model Portfolios You Can Use – Updated through 8/21/2012

Ulli Model ETF Portfolios Contact

Inching ahead on continued central bank intervention hopes was the mode of operation last week, as the major indexes edged up with the S&P 500 taking out its 2012 high yesterday before selling set in.

With our international TTI having generated a new ‘Buy’ signal, as posted on Monday, and the domestic market heading to higher levels as well, I made some Model ETF Portfolio adjustments, by adding some (more conservative) equity positions back in. They are identified in the matrix as “new purchases.”

I stayed with less volatile holdings due to elevated market levels compared to what might have been my choice at the beginning of a new cycle. I still believe that upside potential is limited as opposed to ever increasing downside risk, although the temporary power of manipulating central banks supporting the markets can never be underestimated, as we’ve seen. The question in my mind is as to how long that condition can last.

Here’s the latest model portfolio update:

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Major Market ETFs Retreat As Declining Tech Stocks Eclipse Euro Optimism; ECB Hope Drives Europe Higher

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

Major Market ETFs retreated today with the S&P 500 climbing down from a four-year high as optimism over the European Central Bank’s possible intervention to limit the region’s contagion was eclipsed by a decline in US equities led by technology stocks.

The Dow Jones Industrial Average (DJIA) fell 0.5 percent, with 22 of the 30 stocks within the index ending in the negative territory. Both, the S&P 500 Index (SPX) and the tech-laden NASDAQ Composite (COMP) retreated, losing 0.4 percent and 0.3 percent respectively.

Investors sought refuge in safe-haven assets, pushing yields of Treasury 10-year notes down during the session after a slump in equities fueled worries whether EU leaders would move fast enough to arrest the region’s debt crisis.

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US Equities Pause Ahead Of FOMC Minutes; International Buy Signal Generated

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US equities hit the pause button on a placid August trading session, as investors chose to wait ahead of the Federal Reserve’s minutes from the last meeting due out ater this week as worries about Europe offset gains in the technology and banking sector.

The Dow Jones Industrial Average (DJIA), the S&P 500 and the NASDAQ all closed slightly lower. Within the 30-component Dow, the breadth remained negative with 19 stocks ending lower. The S&P 500 and the NASDAQ ended virtually flat, finishing fractionally lower.

Despite today’s non-action, our International Trend Tracking Index (TTI) has now firmly established itself above its respective trend line by +2.33%—at least for the time being. Effective tomorrow (8/21/12) a new Buy signal is issued for that arena. Let me clarify again which mutual funds/ETFs are affected and which are not.

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ETFs/Mutual Funds On The Cutline – Updated Through 8/17/2012

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 334 (last week 324) 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. 68 ETFs (last week 67) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 803 (last week 788) above the line and 53 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 8/19/2012

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 8/19/2012.

The low volume story continued, and the major indexes managed to crawl higher on uneven economic data with not much coming out of Europe except the occasional sound bite about the support of the Euro.

I expect next week to be somewhat of a repeat with more reality hitting the markets after the Labor Day weekend. A lot will be at stake next month given the widely anticipated decision from the German courts as to the constitutionality of the ESM, which has been widely touted as the savior of the European debt crisis.

As important will be any announcement by the Fed regarding the next quantitative easing (QE) program along with its European counterpart ECB head Mario Monti making good on his market propelling promise that the next plan of action “will be enough.”

I for one can’t wait to see his ideas but, given past history, it may have been just the usual amount of empty jawboning, which the Europeans have elevated to a fine art level.

Nevertheless, all of the above have contributed to the current market rally, so any forthcoming disappointment will be a joyous event for the bears, which are more than ready to strap the lead boots on to the bulls.

Over past week, we covered the following:

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Will Bernanke Keep His Cards Close To His Chest?

Ulli Market Review Contact

Federal Reserve Chairman Ben Bernanke is unlikely to disclose his strategy going forward when he attends the annual economic policy symposium in Jackson Hole in September, says Randall Kroszner, former Federal Reserve governor and a professor of economics at the Booth School of Business at the University of Chicago.

Back in 2010, Bernanke had disclosed his strategy, because he was sure where the FOMC was heading. This time around, however, we have a little stronger data, but not so strong not to make a case for further monetary stimulus, thus complicating the situation.

However, it may be too early for the QE addicted to pop the champagne cork despite improved housing and retail sales data, since we had had false starts earlier. Randy says even he’s curious to see September employment data and would rather wait and watch before making a call.

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