US Equity ETFs Slide On Europe And China Fears; SDK Pops, UMX Sinks

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

US equity ETFs retreated Monday as political uncertainty in Europe continued to dominate the headlines with French President Nicholas Sarkozy losing the first round of elections to socialist presidential aspirant Francois Hollande. Hollande has been openly hostile to Sarkozy’s austerity proposals and has vowed to tax the rich if voted to power.

The Netherlands’ coveted AAA rating came under pressure after the Dutch coalition government collapsed over austerity-measure disputes. Signs of yet another slowdown in the Chinese manufacturing sector spooked investors further as the markets braced for a week heavy on economic and earnings data.

I don’t know how else to say it, but Europe is a basket case. For some always entertaining yet brutally honest and correct comments on this topic, here’s Nigel Farage addressing the UK parliament:

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ETFs/Mutual Funds On The Cutline – Updated Through 4/20/2012

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 334 (last week 316) 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. 66 ETFs (last week 60) 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 804 (last week 785) above the line and 57 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 4/22/2012

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 4/22/2012.

Last Tuesday’s strong rebound gave encouragement to the bulls, but there was no upside follow through, so the markets meandered with a downward bias for the remainder of the week.

While some are focusing on allegedly great earnings reports, the fact that the bar has been lowered does not seem to matter much. Right now, much of the attention will be on this weekend’s first round of elections in France, after which we’ll be facing a week with some 200 earnings announcements.

Upward market direction is sure to be challenged in the event expectations are not met.

This week, we covered the following:

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The Weekly Interview: Emerging Market ETFs

Ulli Emerging Markets ETFs Contact

The emerging markets led by China may prove to be an attractive investment proposition, according to Jay Pelosky, consultant at J2Z Advisory. Jay also helps Morgan Stanley create global and emerging markets equity products.

Speaking on Bloomberg about the domestic economy, Jay said there are four key issues – which he likes to call “sustainable issues,” that need to be addressed.

First, can the US economy return to a self-sustaining growth path without the monetary stimulus from the Federal Reserve?

Second, can the US banks maintain their leadership position in the equity market?

Third, can the LTRO blanket keep the problems under wrap in Europe and fourth, can the Asian reflation efforts be sustained? (The act of increasing money supply or reducing taxes to stimulate the economy)

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Taking Stock: Currency ETFs For Betting Against The Greenback

Ulli Currency ETFs Contact

The US dollar has not really rallied against the euro despite the European debt crisis continuing to dominate global headlines. In fact, the US dollar has remained nearly flat so far in 2012, as indicated by the US dollar index reading (see UUP chart above).

Many investors, however, remain long-term bearish on the world’s leading reserve currency due to a string of macroeconomic factors that currently plague the US economy.

The economy remains highly leveraged, both at the individual, state and federal level while inflation, driven by high energy costs pose significant risks to growth as the Federal Reserve may be forced to raise interest rates to cap rising prices.

More analysts are advising investors to either spread their currency risks or try taking advantage of alternative currencies against the dollar. If you are taking long term positions, or are trying to remove some of the currency risks, you can consider these short-dollar currency ETFs.

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04-20-2012

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, April 20, 2012

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2012/04/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-04192012/

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Market Commentary

Friday, April 20, 2012

US BROAD MARKET EDGES HIGHER ON EARNINGS

US stocks mostly ended higher Friday with two indices reversing a two-week losing streak and recouping early week losses, as Wall Street welcomed another round of decent earnings from American companies and (temporarily) positive developments on Europe.

US Treasuries closed higher for the fifth week in a row, the longest stretch since last June as investors sought refuge in the world’s safest debt assets in an uncertain global environment.

The Dow Jones Industrial Average (DJIA) rose 0.5 percent, up 1.4 percent over the prior week, while the S&P 500 Index (SPX) climbed 0.1 percent with consumer staples and utilities faring the best and financials and technology dropping the most among the 10 industry group.

The NASDAQ Composite (COMP) slipped 0.2 percent, which is the index’s third straight week of losses.

Treasuries changed little from yesterday as the benchmark 10-year yield remained at 1.96 percent. The 10-year yields have remained within 7 basis points of the 2-percent level for two straight weeks now.

Today’s development shows the market’s deep suspicion over Eurozone developments, despite the IMF announcing $430 billion in fresh funding from G20 nations to protect a contagion.

ETFs in the news:

The Global X Uranium ETF (URA) jumped 1.91 percent, as equities closed the week with modest gains. URA, however, remains well below the levels seen before the April sell-off.

The iShares MSCI Spain Index Fund (EWP) rose 2.10 percent, showing some resilience as the week draws to an end. EWP has been on a downward journey since the middle of March as Spain’s financial woes made global headlines.

I suggest you handle all Europe related ETFs with care till after the impending elections in France and Greece to see if some stability returns in the region.  Personally, I doubt it as the core issues that ail Europe have not been addressed.

The Guggenheim Shipping ETF (SEA) rose 1.48 percent to end the week on a positive note. However, you should remain cautious as a deteriorating global economy may put pressure on transportation related products.

Among the day’s top losers, the iPath S&P 500 VIX Short Term Futures ETN (VXX) lost 3.32 percent as risk sentiment improved. This ETF has floundered after capping a multi-session rally at the start of April but has struggled to break away despite market choppiness.

The iShares S&P North American Technology-Multimedia Networking Index Fund (IGN) dropped 2.22 percent as tech companies continue to disappoint. The fund’s eighth largest holding Riverbed Technology dropped to its lowest level since October on weak earnings number, dragging IGN lower.

Our Trend Tracking Indexes (TTIs) improved from last Friday’s close, and both remain above the line and in bullish territory. Here are this week’s closing numbers:

Domestic TTI: +4.60% (last week +4.38%)

International TTI: +3.23% (last week +2.20%)

Have a great week.

Ulli…

Disclosure: No holdings

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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 Dee:

Q: Ulli: I would like to get some guidance from you. I sold all my mutual funds some time ago and want to invest in ETFs and do it the way as shown in your model portfolios.

However, I see that the funds could be triggered to get sold any day based on the 7% sell stop set up when purchased. Once that happens, what would be the replacement funds?

I don’t seem to find that information.

A: Dee: Once you are stopped out of a position, you should first be in cash on the sidelines. You can then either replace that position with another fund that is trending up, or wait to reenter until the sold fund takes out its old high that you used as a basis to calculate the sell stop.

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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/

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

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