ETF/No Load Fund Tracker Newsletter For Friday, February 17, 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/2012/02/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-02162012/

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Market Commentary

Friday, February 17, 2012

US STOCKS END WEEK ON A HIGH, ETFS ARE THE NEW BELLWETHERS OF THE MARKETS

US stock indexes closed higher for the week with the DJIA closing within sniffing distance of 13,000 on a solid week though investors remained wary of crucial vote on Greek on Monday.

Amid a thinly traded Friday ahead of a three-day holiday weekend, all major indexes posted healthy gains on positive economic developments and hopes of an early Greek settlement.

The DJIA closed higher with a gain of 0.35 percent, while the S&P edged up 0.2 percent but the Nasdaq closed 0.3 percent lower over yesterday. Meanwhile, a research report prepared by technology and trading firm ConvergEx Group shows that nearly $8 billion has flowed out of the US equity mutual funds while US equity ETFs have attracted approximately the same amount during the period.

A whopping $34 billion has flowed in ETFs through Feb 13, which is more than double the weekly $2.6 billion inflow recorded last year, in a sign that to know the pulse of the financial markets, it’s important to know the movements in the ETF universe.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 02/16/2012

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ETF/Mutual Fund Data updated through Thursday, February 16, 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 +5.46%. Be sure to tune into my blog for the latest updates.

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Big Turnaround For Equity ETFs

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[Chart courtesy of MarketWatch.com]

After yesterday’s dip, equity ETFs made up lost ground and then some as the S&P 500 gained 1.10%. The 10-year bond also moved back up to hit a yield of almost 2%. Overall, there have been large fluctuations in risk perception.

There was a spate of positive economic news that contributed to equity bullishness such as a 4-year low in jobless claims as well as an increase in housing starts in January.

However, the spotlight is on Greece. The Greek finance minister announced that a bailout deal could come as soon as Monday, but we’ve already heard this story before given the number of countless delays. Until a deal is finalized, I have no reason to breathe a sigh of relief.

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Greek Overhang Weighs Down on Major Market ETFs

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[Chart courtesy of MarketWatch.com]

Further uncertainty in Greece sent major market ETFs into the red, with the S&P 500 falling 0.54%. Despite weakness in equities and the Euro inching back down toward $1.30/Euro, gold and oil were on the upside.

The primary catalyst for the pessimistic mood continues to be delays surrounding the Greek bailout, or lack thereof. There has been talk that EU officials are trying to come up with a way to push the bailout into April in light of Greece’s political dissension.

As if playing a game with no end in sight, I’m afraid that Europe wants to keep pushing its problems out considering the amount of difficulty in arriving at a solution. With this in mind, market risk will most probably heighten significantly in the coming days.

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7 ETF Model Portfolios You Can Use – Updated through 2/14/2012

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Momentum slowed over the past week with the S&P 500 adding only 0.3%. Will Greece receive new bailout money, or not, has been the main question as the Eurozone Finance ministers will have the final say if and when funds will be released.

Opinions abound that Greece will head for a default anyway, a view that I share, and this possibility has the markets somewhat on edge. Technically, we are due for a rebound anyway and, if that is coupled with a disorderly default, it will most likely magnify downside momentum.

Again, it’s important that you establish your exit strategy now, during times of calmness, so you don’t get stressed out when the market heat is on.

Take a look at the latest ETF Model Portfolio update:

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A Timid Day for Equity ETFs

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

Markets were relatively stagnant today despite the cancellation of a Greek bailout meeting. The atmosphere is becoming increasingly tense as the deadline looms, putting Greece’s chances of receiving bailout funds in jeopardy.

Despite flatness in equities, the 10-year Treasury dipped to 1.92%, a sign that investors remain in a risk adverse mood. A disorderly default in Greece could propel further flight to safety.

To add more insult to injury, Greece’s economy contracted almost 7% in 2011, meaning that there will be plenty of suffering in 2012 and the following years due to the new, stricter austerity measures. Greek PM Papademos has noted that a failure to resolve the country’s predicament can quickly lead to chaos.

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