Major Market ETFs Rally Following Greece’s Vote

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

The major market indexes retraced Friday’s sell off, and then some, as Greece’s parliament voted in favor of strict financial reforms in order to receive the latest bailout package of at least $130 billion Euros.

Athens burned for most of the night as protestors rioted and questioned the wisdom of having to endure more hardship after years of recessionary conditions along with an unemployment rate that is approaching 21% and likely to get worse.

It’s still uncertain whether the bailout will actually go through, as the Eurozone Finance Ministers will meet this Wednesday and will have to be convinced that Greece will abide all terms.

Read More

ETFs/Mutual Funds On The Cutline – Updated Through 2/10/2012

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 332 (last week 340) 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 72) have managed to move into in bullish territory after the recent run up.

The third report covers Mutual Funds on the Cutline. There are currently 762 (last week 774) above the line and 99 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

Last Week In Review: ETF News And Blog Posts To 2/12/2012

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 2/12/2012.

Friday’s pullback left the major indexes almost unchanged for the last week. All eyes are now on the (hopefully) final act of the Greek debt opera as party infighting continued while the realization of a dark and unknown future seems to have sunk in.

February 15th has been announced as a cutoff point to agree on a new bailout deal. Otherwise, sufficient funds to meet the March repayments will not be available.

This week, we covered the following:

Read More

All Eyes On Greece – The Saga Continues

Ulli Market Commentary Contact

In what seems to be a never ending saga, the Greek crisis has now hit another critical point. While the austerity measures agreed to this week were a necessary step towards cutting Greece’s debt load, it came at great political and social costs as internal unrest has hit a new fever pitch.

There is still no deal with bondholders, and no assurance from the Troika that Greece will receive a bailout payment in March. A lack of confidence in Greece’s ability to impose long-term fiscal discipline is understandably a major concern, as Merkel and others are now perturbed by Greece’s indecision, which has shaken markets.

To get an overview of recent developments in Greece and what might be store in the coming weeks, check out this video from the BBC. At the present time, Greece’s economic future depends on whether it can set political bickering aside and establish a credible plan to cut its debt in an orderly fashion. Otherwise, default may soon arrive.

Potential Value Added From Commodity ETFs

Ulli Uncategorized Contact

While equity ETFs have displayed some impressive form this year, they have certainly hit some rough patches in the last few years and perhaps may again in the near future. Having a sizeable fixed income ETF allocation is certainly a prudent way to minimize your risk exposure, especially if you have equities and bonds spread across various asset classes.

But for those looking to enhance diversification in their portfolios and don’t mind taking on a little additional risk, commodity ETFs are a viable option. As far as our model portfolios are concerned, we have some commodity ETFs. For instance, our Aggressive Portfolio contains PowerShares DB Commodity Index (DBC), which contains oil, gold, and metals holdings. Not to mention, our go-to mutual fund (PRPFX), includes gold and silver ETFs.

However, according to Warren Buffet’s sage advice, some of which he recently disseminated, investing in commodities such as physical gold or gold ETFs isn’t such a good idea. The Oracle of Omaha has a point about better long-term performance in equities, but if you’re looking to add minimal gold exposure in the short-term, it can help to serve as a hedge. Not to mention, the SPDR Gold Trust ETF has returned over 25% in the last 12 months.

Read More

02-10-2012

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, February 10, 2012

ETF/No Load Fund Tracker StatSheet

————————————————————-

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-02092012/

————————————————————

Market Commentary

Friday, February 10, 2012

MAJOR MARKET ETFS FINALLY HIT THE RED

After several days of gains, markets finally dropped, with the S&P 500 falling a modest 0.69%. European and Asian indices were more substantially in the red. In commodities, oil and gold were also down.

Demonstrating the volatility in fixed income, the 10-year Treasury fell below 2% to a yield of 1.97%. Most startlingly, the VIX had a massive jump of 11.65% to rise above the 20 level. We’ll have to see if this foreshadows more volatility in the near future.

If anything causes a bigger spike in volatility, it would likely be the effect of an unfavorable outcome in Greece, especially if it’s unexpected. Greece not only has internal dissension, but it must finalize a deal with will be agreeable with bondholders and the troika. From my point of view, we’re on high risk alert.

Although Greece made some progress yesterday, the tension is greater than ever. Not only are unions upping the ante with more strikes, but five Greek politicians resigned due to disagreement over austerity measures. Papademos is in a tight spot as some politicians want to go ahead with the fiscal cuts in order to receive bailout funds and keep Greece in the Eurozone while others can’t muster the nerve to accept the cuts and face public backlash.

While Greece worries about getting its bailout money, it appears that Portugal will need more aid than expected. Germany’s finance minister hinted that the planned $100 billion plus bailout package may not be enough, especially as Portugal’s borrowing costs for medium-term to long-term debt are well into double digits.

In the U.S., dismal housing numbers are not going away, prompting Bernanke once again to stress the importance of a turnaround in housing to help the U.S.’s economic fortune. Despite a decrease in mortgage rates, housing hasn’t dramatically improved.

With regards to our Trend Tracking Indices, our Domestic TTI is currently sitting at +4.89%, giving us justification to hold on to our domestic equity ETF exposure. Meanwhile, for the first time since September 2010, we’ve generated a buy signal for international equity ETFs, as the International TTI has emerged from bear territory (as posted on 2/7/12) to sit at +1.96%. Nevertheless, we want to be more cautious in the international sphere where there is more volatility.

This past week was generally mild in terms of market activity, but in the wake of today’s big jump in volatility and further signs of strain in Europe, we’ll have to see if next week brings more downside. Make sure you have your trailing stop losses implemented in case this happens.

Have a great week.

Ulli…

————————————————————-

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 GH:

Q: Ulli: “Concerns linger over the European banking system with regards to capital shortfalls. There is speculation that a number of banks that submitted proposals for achieving capital adequacy might still not reach a necessary target of 9% tier one capital. With 30 banks that collectively need roughly $150 billion in capital to meet this target…”

I don’t know why there should be any concern. As we’ve learned in the age of intervention (since March 2009), targets move. Sometimes targets disappear…and new ones appear.

Honestly, I think that idea has a lot to do with why markets are less volatile and steadily moving upward now. Can investors be blamed for becoming complacent?

I’ve been overly skeptical of long positions for years now. And I’ve only recently become more “daring” when moving money into ETF’s. And my idea of daring is increasing positions in consumer staples!

Do you think I’m a good measure of market direction to the upside, or a contrarian indicator that screams “SELL”!? (tongue-in-cheek)

A: GH: Well, you could be a contrarian indicator…

I agree with what you said in terms of targets and your overall skepticism. That’s why my preference is not to make market interpretations but let the trends be my guide. I have found over the past 25 years that my personal assumptions and opinions are not necessarily aligned with market direction.

It’s far more effective to follow the long-term trends and use trailing sell stops to control downside risk while accepting the fact at the same time that you will be wrong occasionally and that subsequent whipsaw signals are simply part of the equation.

———————————————————-

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/