ETF/No Load Fund Tracker Newsletter For Friday, June 22, 2012

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ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2012/06/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-06212012/

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Market Commentary

Friday, June 22, 2012

US EQUITIES REBOUND ON EUROPE HOPES; EWP FLIES, VIXY CRASHES

US stocks clawed back Friday, recovering part of Thursday’s sharp losses after the European Central Bank said it will lower rating thresholds and amend eligibility criteria for asset-backed securities to ease access to funds for the region’s banks.

The move to loosen up some of the rules on collaterals that banks can offer in exchange for funds from the central bank was taken by the Governing Council of the Frankfurt-based organization in an effort to boost growth.  Lovely; this is as clear of a sign as you can get that quality collateral no longer exists anywhere in Europe, which makes wonder how long this extend and pretend game can go on.

Treasuries slipped over reports that leaders of Germany, Spain, France, and Italy have decided to consult jawbone further on a €125 billion stimulus plan for the single-currency block to boost growth, equal to one percent of the 17-member economic zone’s output.  I can’t wait to hear the results of that latest futile effort.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 06/21/2012

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ETF/Mutual Fund Data updated through Thursday, June 21, 2012

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

The domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken above its long term trend line (red) by +1.60%. Be sure to tune into my blog for the latest updates.

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Major Indexes Plunge On Bernake Fallout, Economy And Europe; GAZ Floats, GDXJ Crashes

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[Chart courtesy of MarketWatch.com]

The major index ETFs took the year’s second hardest knock Thursday losing more than two percent as investors ran for safe haven assets amid indications of a global slowdown, while rumors of an impending downgrade of 17 major US banks by Moody’s Analytics added to market concerns.

Obviously, disappointment in what the markets perceived as a lack of Fed intervention played a big role and added to downward momentum. Again, my view is that the Fed will not pull out the big guns, if it has any left, until the markets dive towards panic territory or the economy slips officially into a recession. My definition of panic in the markets would be another 20% or so correction from current levels putting the S&P 500 towards the 1,000 milestone.

Treasuries progressed for the first time in three down sessions after Europe’s PMI index for June remained near three-year lows while manufacturing output in Germany, the region’s biggest economy, slowed down at the fastest rate in three years and manufacturing  shrank for the eight month in Asia and China. The global slowdown is now underway, and the US market will not be excluded from its effects.

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Equities Whip-saw And Edge Down As Fed Extends Operation Twist; EWP Rises, VIXY Sinks

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[Chart courtesy of MarketWatch.com]

Equities see-sawed and edged lower Wednesday as the Federal Reserve extended its much anticipated Operation Twist program but stopped short of initiating a more aggressive direct bonds purchase program, which was the exact possibility I discussed in last night’s post.

As the chart above shows, the major indexes went on a wild ride, but held up surprisingly well. Longer term 30-year bonds erased early losses while shorter term Treasuries retreated after the central bank lowered growth forecasts for the largest economy and said it was prepared to do more to support the economy, hinting at more aggressive measures in the future if the labor markets failed to improve.

The Dow Jones Industrial Average (DJIA) closed off 13 points, despite losing more than 94 points in early trade. Within the Dow, 16 of the 30 companies closed higher.

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7 ETF Model Portfolios You Can Use – Updated through 6/19/2012

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Upward momentum continued powered solely by hopes of a major QE program announcement by the Fed today 2:15 pm EST. The S&P 500 added some 2.6% since last week’s ETF Model Portfolio report, which puts it at a level that is only 4% off the highs YTD.

There is nothing else that has contributed to this rise as just about all recent economic data points were downright negative, which has supported hope of more stimulus to come.

It will be interesting to see if the Fed delivers to the magnitude that is expected and priced in by the markets. If they fall short, and don’t meet these elevated expectations, the major indexes will shift into reverse in a hurry. Stay tuned for today’s market commentary.

Take a look at the latest model portfolio update:

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US Stocks Rise Again On Fed Stimulus Hopes; Will Bernanke Deliver?

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[Chart courtesy of MarketWatch.com]

US stocks rallied Tuesday, adding more than one percent for the day on hopes of extension of the Operation Twist as the US central bank’s two-day long FOMC meeting started today.

Resilient housing data for May boosted sentiments further, pushing US indexes to a five-week high.

Treasuries declined after three continuous gain-days amid growing chatters that the Fed will extend its accommodative policies while investors remained hopeful EU leaders will initiate decisive measures to contain the sovereign debt crisis.

The housing sector showed signs of recovery as application for building permits filed by homebuilders grew the fastest in nearly four years though housing starts, more dependent on weather than permits, fell a little short of forecasts.

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