A hike in interest rates may not happen in the US this July though that probably remains the appropriate policy move, said David Joy, chief strategist at Ameriprise Financial.

Ameriprise expects the US economy to grow by 3 percent in 2015, which justifies the beginning of a liftoff; but whether that happens in June or July remains to be seen. After Friday’s GDP number and the latest round of monthly data, the Fed can justify a push-back as long as they want and June-July looks appropriate, he added.

Not so long ago people were fairly convinced of a rate-hike by the middle of this year, but the narrative changed suddenly indicating a hike may not happen before the end of 2015.

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Investors have always been fascinated by the investing prowess of market legends such as Benjamin Graham, Peter Lynch and Warren Buffet et al for decades. Their success in picking value areas of the stock market by sticking to fundamentals is no small achievement and neither are they easy to replicate.

However, in recent years a number of so-called guru ETFs has popped up to make life easier for the uninitiated. While most of the exchange traded funds have managed to meet investor expectations, none of them offers investors direct access to the investing methodologies applied by the legends of Wall Street. The newly-launched Validea Market Legends ETF (VALX) seeks to fill that void.

Validea Capital Management, the Connecticut-based investment advisor promoted by veteran fund manager John Reese, is the sponsor of VALX. The actively-managed fund follows a unique methodology in that it analyzes 10 different “guru” models that include, among other factors – value, growth, momentum and income. Next, it chooses 10 stocks from each investment strategy to constitute the underlying 100-stock portfolio, indicating the fund is very well diversified.

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ETF/No Load Fund Tracker StatSheet

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

http://www.theetfbully.com/2015/01/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-01292015/

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Market Commentary

Friday, January 30, 2015

A DISAPPOINTING END TO A DISAPPOINTING MONTH…AGAIN

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Despite being one of the best performing equity markets in 2014, the S&P 500 is off to a choppy and sluggish start to 2015. Slow growth and deflation pressure in Europe have led to more aggressive central bank (ECB) stimulus, while alleged stronger growth prospects in the U.S. may demand a shift in Fed policy in the second half of 2015.

To recap the first month of trading, January finished 3.1% lower, similar to the 3.6% decline we saw in 2014. While we all know the saying “as January goes, so goes the year,” those that left the market after the decline in January 2014 would have missed a 15.5% gain in February through December. In fact, since 1950, a negative return in January accurately predicted negative returns for the year about 50% of the time – basically a coin flip. No one can predict what the markets will do. So, I think the lesson here is, let long-term trends dictate investment decisions, not catchy sayings.

Looking to next week and a fresh month of trading and economic data, we will receive an employment report on Friday. The expectations are for more than 200,000 job additions for the 12th consecutive month. Economists expect 230,000 jobs to have been added in January, and for the unemployment rate to stay at 5.7%. Other reports include the ISM manufacturing and non-manufacturing indexes, personal income and spending, and auto sales.

All of our 10 ETFs in the Spotlight headed south today and only one is showing green numbers for the year. Take a look at the table in section 2.

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ETF/Mutual Fund Data updated through Thursday, January 29, 2015

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 10/22/2014

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a “Sell” for this arena effective 10/14/2014, which was followed by a violent break back above the line on 10/22/14 generating a new “Buy.” It was a classic whipsaw signal, and you can read more on my blog as to the events as they were unfolding.

As of today, our TTI (green line in above chart) is positioned above its long term trend line (red) by +2.53% keeping us in the market with our established positions.

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks staged a strong afternoon rally and closed higher today as the major indexes broke a two-day losing streak. Utilities led the way for the S&P 500, as all ten sectors of the index posted gains.

In tech news, shares of Alibaba (BABA) plunged 8.5% after the Chinese Internet giant reported revenue that fell short of analyst expectations. The company is also dealing with a report from the Chinese government that said it allowed the sales of fake goods on its e-commerce platforms, however, there is much that is still to be determined. Google Inc.’s (GOOG) fourth-quarter sales and profit missed estimates as the Web Company’s advertising business faced more competition on mobile devices.

Continuing in the world of internet, Time Warner Cable (TWX) continued to lose cable subscribers in the three months ended in December as Americans experiment with cutting the cord to their cable. Perhaps mobile TV and streaming is the way of the future. However, the cable giant is not willing to give up by any means.

In economic news, the Fed strengthened its assessment of the U.S. economy Wednesday, noting it is expanding at a solid pace and generating strong job growth. The central bank also indicated it would remain “patient” in raising interest rates from near zero, which was expected.

All of our 10 ETFs in the Spotlight managed to follow newly found upside momentum and closed higher with XLY leading the charge with  a +1.36% gain. YTD, 4 of the 10 remain on the plus side as you can see in section 2.

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks took a dive today, ending another wild ride with a plunge deeper into the red after the Federal Reserve’s latest policy statement.

The Federal Reserve gave no indication today that it would stand down from plans to raise interest rates this year, noting that it expects unusually low inflation to gradually pick up as the “transitory effects” of tumbling oil prices fade.

Speaking of the slick commodity, oil prices slid again today. U.S. crude oil fell 4%, volatile as it has been and plunged deeper into the red after the Federal Reserve’s latest policy statement. The Fed used more positive language to describe the outlook for the economy and the job market here at home; however, it seemed that Wall Street wasn’t buying into it.

In tech, Facebook (FB) topped earnings estimates for the seventh straight quarter. Facebook reported fourth-quarter revenue of $3.85 billion, an increase of 49% from $2.59 billion in the fourth quarter of 2013. Analysts had expected revenue of $3.77 billion. So, there is much to tip your hat to if you are looking at Facebook’s numbers to kick off the year.

Slipping and sliding, all of our 10 ETFs in the Spotlight headed south with the financials (IYF) leading the way by surrendering -1.82%; YTD, however, 4 of them still remain on the plus side as you can see in section 2.

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