Equity ETF Indexes Advance; GAZ On Fire, VXX Sinks

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US stocks continued their advancement Monday, as modest homebuilder’s data indicated the sector’s gradual recovery ahead of other housing-related data this week.

The gains were supported by Apple’s hefty dividend announcement and $10 billion share buy-back program over the next three years. Tech stocks advanced the most though some of the heavyweights retreated. US 10-year notes tanked for the ninth consecutive day, as risk sentiments improved and investors dumped Treasuries for more risky assets.

The Dow Jones Industrial Average (DJIA) climbed 0.04 percent to 13,238.98. Technology, financials and energy stocks led the day’s gainers. The Dow reversed the day’s early losses after Wells Fargo and National Association of Home Builders said their builders’ sentiment index remained near their five-year high. 18 of the 30-component Dow advanced for the day.

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Traveling

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Today’s market commentary will appear later than planned, as I am traveling for most of the afternoon and evening. I hope to have it posted by about midnight PST.

ETFs/Mutual Funds On The Cutline – Updated Through 3/16/2012

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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 349 (last week 356) 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. 76 ETFs (last week 76) 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 817 (last week 814) above the line and 44 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 3/18/2012

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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 3/18/2012.

Last week’s overhead resistance was overcome as the Dow and the S&P 500 cleared their respective hurdles of 13k and 1,400.

That brings up the question as to how much higher can we go and where in the cycle might we be?

ZeroHedge featured this chart showing that, as market euphoria increases, we may be closing in on the top:

[Click on chart to enlarge]

I agree with where we might be at this particular point in time, but our Trend Tracking Indexes (TTIs) will eventually confirm once we have reached and passed that top.

This week, we covered the following:

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Fixed-Income ETFs Are Getting A Lot Of Attention, What’s The Reason?

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ETFs were created with equities in mind, but a lot of fixed-income products have been launched recently that have garnered much investor interest. What’s the reason?

If Matthew Tucker, head of fixed-income strategy at Blackrock’s iShares units is to be believed, these ETFs have grown in volume since they were launched over a decade back.

Due to greater liquidity, they have started to attract pretty much every investor to the bond market, including private investors, institutional investors, wealth managers and individual investors, who are trading in fixed income ETFs now, much like equity ETFs.

Fixed-income products have democratized the credit market and individual investors who can’t access the high-yield bonds or corporate bonds market because the transaction costs are very high, can buy high-yield products like HYG with 450 high yield securities combined to create the fund.

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Not Sure If The Bull-Run Is Fundamentals Driven? Here’s How You Can Hedge With ETFs

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The stock market is scaling newer heights every day, as economic data indicates a recovery that’s more sustainable and fundamentals driven. The core sectors of the economy have done well in 2012 and the momentum is gaining traction, if you believe the published numbers. However, though the domestic growth story gains credence, international events may turn the mood negative sooner than later.

Energy prices remain a key concern and may slow down growth if not checked. The Eurozone still provides many challenges, especially Greece, Portugal and Spain. Elections are due in April/May and Athens may spring a surprise following the voting. Spain is struggling with high unemployment rate and a spiraling budget deficit. True, the LTRO has given the peripheral states three years time to spruce up their balance-sheets; still they remain vulnerable to external shocks.

Fortunately, the ETF industry offers investors safety nets from downside risks. Sophisticated investors may choose to invest in derivatives to mitigate risks, while a great many opt for more traditional instruments like bonds and precious metals.

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