7 ETF Model Portfolios You Can Use – Updated through 8/14/2012

Ulli Model ETF Portfolios Contact

We have reached the dog days of August. No volume to speak of, in fact some days it reached 10-year lows, as I posted, which makes this a market that can be pushed either way with very little effort.

As a result, the S&P 500 barely budged from last week’s model portfolio report and, barring any unforeseen circumstances, I would expect this meandering to continue until after Labor Day.

September promises to be a month filled with possibilities that, based on upcoming events, can rock the major indexes big time depending on the news events and their interpretations. One of the most widely watched announcements will be the decision from the German constitutional court regarding the validity of the ESM, on which Europe’s hopes for survival rest at this time.

Of course, as we’ve seen before, bad news can be good news in today’s bizarre market environment depending on if the Fed/ECB continues to show willingness to serve up more QE—if for no other reason than to keep the S&P 500 above the 1,400 level.

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

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Domestic Stocks End Flat Despite Better Economic Numbers; Germany And France Hold The Fort

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

Domestic stocks pared better economic-data driven early gains Tuesday in the final trading hour, after media reports suggested Greece was set to seek more time to meet its budget-deficit reduction targets. As if more time would really make a difference.

The Financial Times of London suggested Greece is expected to propose 1.5 percent deficit reduction annually from the present 2.5 percent annual target.

The Dow Jones Industrial Average closed marginally higher while both the S&P 500 and the tech-heavy NASDAQ slipped.

Yields on US Treasury notes rose, pushing prices down as US retail sales for July came in higher-than-estimated, easing demand for safe-haven assets. Retail sales, contributing 70 percent to the GDP, grew for the first time in four months, diluting speculations of further quantitative easing by the Federal Reserve.

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US Equities End Mostly Lower As Japanese GDP Disappoints; Europe Slips On German Lawsuit

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US equties mostly declined Monday after six straight up sessions as weak Japanese Q2 GDP reading weighed on investors despite a successful auction of Italian bonds that somewhat eased market concerns on Europe.

Both the S&P 500 and the Dow Industrials ended the day modestly lower as investors rushed to take profits while the NASDAQ recovered from early losses to finish slightly higher ahead of tomorrow’s retail sales data for July.

However, trading volume on the NYSE has now reached downright absurd low levels by hitting its lowest non-Holiday figure in over a decade! This means that any movement in the indexes can be easily manipulated by those still playing the game hoping that none of the bad news matters, such as lower earnings guidance, and slipping company revenues. Why? Because at some time the central banks are expected to serve another helping of QE, which is supposed put a floor under the market and keep traders happy. This will work until the day that it doesn’t.

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ETFs/Mutual Funds On The Cutline – Updated Through 8/10/2012

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 324 (last week 283) 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. 67 ETFs (last week 55) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 788 (last week 689) above the line and 73 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 8/12/2012

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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