Ulli... The ETF Bully

ETFs/Mutual Funds On The Cutline – Updated Through 5/18/2012

Ulli Monday, 21 May 2012, 6:00 AM 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 157 (last week 274) 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. 22 ETFs (last week 46) have managed to remain in in bullish territory after the recent sell off.

The third report covers Mutual Funds on the Cutline. There are currently 312 (last week 748) above the line and 549 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 5/21/2012

Ulli Sunday, 20 May 2012, 8:00 AM 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 5/21/2012.

Seems like market behavior has been in repeat mode all month, as the benchmark S&P 500 index got spanked at the tune of -4.3% for the past week. It now has only about 1.49% to go before breaching its widely followed 200-day moving average. Any break below that level is sure to invite more selling.

The DJ Transports so far have been leading the way to the downside by crossing below the respective long term trend line by -1.83%.

Again, I sound like a broken record when reminding you that this is not the time to be a hero, but it is the time for capital preservation, as downside momentum has increased, which is supported by the continuously spreading debt problems in Europe. Follow your trailing sell stops and execute them when they get triggered.

This week, we covered the following:

Are We Turning Overly Bearish Over Europe?

Ulli Sunday, 20 May 2012, 6:00 AM Europe Contact

With the endgame in Europe over Greece in sight, are the markets overly worried about a possible euro breakup following Athens’ exit? Karen Olney, head of thematic equity strategy at UBS AG certainly doesn’t think so.

Europe still provides tremendous value and global investors have not capitulated yet though there are specific calendar risks involved (e.g. – Greece election on June 17). The S&P is down about 7 percent from its recent peaks, which indicates investors haven’t capitulated over a possible euro break up. Other indicators such as put-to-call ratio, bull minus bear and the volatility index reading doesn’t suggest a bear run, though some parts pockets in Europe may have witnessed them.

As far as flight of capital is concerned where investors start to withdraw money from the banks in the peripheral region and deposit them at the stronger core countries, the European Central Bank may have to come out with some kind of deposit guarantee scheme to restore depositor’s confidence. Personally, she doesn’t think that Greece is going to go out of the Euro and would rather continue with the reforms process.

Taking Stock: Emerging Markets Dollar Denominated Bond ETFs

Ulli Saturday, 19 May 2012, 6:00 AM Bond ETFs Contact

As global economies continue to stutter with little growth expected from the developed European nations, the emerging markets are expected to drive global growth in the decades to come. Emerging markets currently contribute 30 percent of global GDP which will only grow in the future.

Emerging market bonds are perceived as riskier, which is rewarded by higher returns. However, many emerging markets have improved their fiscal health and their budget deficits are in fact lower than many developed countries, which indicate lower risk. Also inflation risk has diminished greatly for most countries.

The following two ETFs have a diversified portfolio and can be considered by investors with a little more aggressive streak, which to me is a requirement when seeking exposure in the emerging market fixed income area:

05-18-2012

Ulli Friday, 18 May 2012, 5:21 PM Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, May 18, 2012

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2012/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05172012/

————————————————————

Market Commentary

Friday, May 18, 2012

US STOCKS EXTEND LOSSES AS FACEBOOK EUPHORIA EVAPORATES; VXX GAINS, KCE SINKS

US stocks closed lower Friday with the broad markets closing out the worst week of the year. Despite Facebook’s much talked about IPO today, shares of the social networking site barely rose above the offering price.

Investors remained wary of the markets as latest reports suggested the European Central Bank and the European Council are preparing for Athens’ eventual exit from the European Union. The nation’s banking sector has come under added stress as many depositors have withdrawn money fearing forced conversion of the currency if eased out of EU.

The benchmark US Treasury changed little after coming close to a record low level ahead of next week’s $99 billion coupon-bearing debt auction.

The Dow Jones Industrial Average (DJIA) ended the week at 12,369.38, its 12th down day in the last 13. The blue-chip index is down 6.4 percent for the month and is off 3.5 percent for the week.

The S&P 500 Index (SPX) lost 9.64 points to finish the week at 1295.22, its third straight week of losses, with healthcare witnessing the steepest fall while telecommunications gained the most among its 10 industry groups.

The NASDAQ Composite Index (COMP) tumbled 34.90 points to close at 2,778.79, down 5.3 percent for the week.

Treasury 10-year benchmark yields rose 0.01 percentage point to 1.71 percent, down 0.11 percent for the week. The yield had dropped to 1.6937 percent during the day’s session, approaching the record 1.6714 set on Sep 23.

ETFs in the news:

Among the day’s top gainers, the Barclays iPath S&P VIX Short-Term Futures ETN (VXX) remained on top, rallying 6.48 percent for the day. The CBOE volatility index rose 2.49 percent for the day. VXX has added nearly 30 percent in the past two weeks as the eurozone continues to spook global markets.

Meanwhile another volatility tracking product, the ProShares VIX Short-Term Futures ETF (VIXY) also closed an impressive 6.27 percent higher. The fund traded nearly two million shares today, about four times more than its daily average volume.

The State Street SPDR KBW Capital Markets ETF (KCE) was among the day’s top losers, shedding 1.63 percent for the day. The Financial Select Sector SPDR Fund (XLF) lost 1.15 percent on a day when financial ETFs got hammered across the board.

Our Trend Tracking Indexes (TTIs) headed lower as well, with the domestic one hanging on to the plus side of the trend line. The International TTI has been heading further south and is now entrenched in bear market territory.

Here are this week’s closing numbers:

Domestic TTI: +1.47% (last week +3.26%)

International TTI: -5.08% (last week -0.18%)

Several sell stops were triggered this week, and I took evasive action. On the chopping block for Monday will be VTI, one of our core holdings, unless, of course, a huge rally is materializes all of a sudden.

These are extremely uncertain times in the market, and I suggest you make plans as well to exit your most volatile holdings.

Have a great week.

Ulli…

Disclosure: No holdings

————————————————————-

READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

A note from reader Kent:

Q: Ulli: One would have to think, with the huge numbers average investors chasing yield, and with the launching of new ETF’s that are upping the risk level, like the high yield ETF that you mentioned, and with yields about as low as they can go, that we are setting up for the bond crash of a lifetime.

A: Kent: Well, long term you could be right. However, in the short-term, yields could go a lot lower due to the Europe crisis unfolding and worsening every day. Once a crash/contagion happens, the flight to safety will be on, which will be into US Bonds and similar instruments.

In case you forgot, I recommend a trailing sell stop of 5% for bond ETFs/funds.

———————————————————-

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

———————————————————

Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/