Low Volatility Continues for ETFs

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

Markets moved forward once again as the S&P 500 rose 0.22%. Nevertheless, European markets erred to the downside. While it seems like markets have discounted the Greek situation, there’s no promise that market price stability will persist.

Overall, there wasn’t much volatility across U.S. indices, currencies, Treasuries, or commodities today. The VIX went up over 2%, but this pales in comparison to the major price swings we witnessed in late 2011.

Meanwhile, an emergency meeting will be held among European finance ministers to discuss Greece. Greek PM Papademos finally met with party leaders today after delays to try and iron out a resolution. Whether Greece can institute fiscal reforms such as a 20% minimum wage cut remains the big unknown. Ultimately, a 50%-70% haircut on current bonds with the promise of new bonds is no cure for Greece’s financial irresponsibility. Renewed fiscal discipline must come from within the political coffers.

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

Ulli Model ETF Portfolios Contact

January’s upward momentum continued into February, as the S&P 500 jumped some 2.6% since last week’s ETF Model Portfolio report. All models moved higher as well with 3 of them (#3, #4, #5) outperforming the index on a YTD basis.

While that is nice, it is not nearly as important as having some kind of diversification for that moment when downside risk kicks in again. It’s just a matter of time for this rally to run into some kind of a stumbling block, which is why it’s crucial for you to have your exit strategy in place.

If you follow these models, you will find the sell stop tracking on the right hand side of each matrix.

Take a look at the latest ETF Model Portfolio update:

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Major Market ETFs Make Small Gains — International Buy Signal Generated

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

There wasn’t any major action in markets today as the S&P 500 only moved up 0.20%. And although Europe’s problems haven’t gone away, the Euro has picked up lost ground against the dollar, now sitting at $1.33/Euro.

Although the 10-year Treasury rose to 1.97%, the fact that it’s below the 2% mark nevertheless indicates significant risk aversion among investors given continued difficulties in Europe.

With regards to Greece, a clear resolution is still not in sight as it missed another bailout deadline as talks keep getting pushed out due to internal dissension among Greece’s political parties.

At this point in time, Greece still has to come to an agreement with the Troika over the details of its $170 billion plus rescue deal. Adding in more strikes from the unions and persistent public sector backlash, Greece has a substantial hurdle to overcome if it stands any chance of receiving bailout funds.

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ETFs Return To An Uncertain Middle Ground

Ulli Market Review Contact

After last Friday’s major gains, markets tempered quite a bit today as the S&P 500 barely dipped 0.04%. European and Asian indices didn’t move significantly either for the most part. In commodities, oil and gold haven’t greatly fluctuated as of late as well.

The 10-year Treasury yield fell down to 1.90% as it appears investors are slightly more on edge about Greece’s fate. The VIX might still be below 20, but there’s still plenty of risk on the table.

As Greece still hasn’t come to a deal with its bondholders, the prospect of default becomes increasingly likely. Even Greek PM Papademos wants his finance team to determine the potential effects of a default. And the rest of Europe is getting antsy over the matter. Merkel and Sarkozy both said that Greece needs to arrive at a resolution soon. If not, the market reaction could turn ugly.

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ETFs/Mutual Funds On The Cutline – Updated Through 2/3/2012

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 340 (last week 293) 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. 72 ETFs (last week 59) 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 774 (last week 681) above the line and 87 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 2/5/2012

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 2/5/2012.

In a reversal from the prior week, upward momentum gained steam as a better than expected jobs report pushed the major indexes higher while gold finally pulled back.

The Greek soap opera continued in full swing, but the domestic markets were largely unaffected as a hard default is now fully expected. Even our International Trend Tracking Index (TTI) crossed its trend line to the upside and, barring any major pullback, I expect to announce a new ‘Buy’ in that arena within a couple of trading days.

This week, we covered the following:

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