[Chart courtesy of MarketWatch.com]

1. Moving the Markets

It was another session during which the major indexes danced around their respective unchanged lines. Early losses were wiped out for the most part, and we managed to eke out a tiny gain with the exception of the Nasdaq, which closed slightly in the red.

In the ETF spectrum that we are invested in, Transportations (IYT) took the lead with +0.40%, followed by the Dividend ETF (SCHD), which added +0.33%. Lagging behind, but ending the day in the green, were the International SmallCaps (SCHC) with +0.15% and International Equities (SCHF) with +0.06%. With the Nasdaq showing weakness, it’s no surprise that Semiconductors (SMH) ended down -0.37%.

Low volume marked the session and added to the aimless meandering, which also found support from continued geopolitical tensions and political turmoil in Washington. The bulls remained cautious and defensive sectors benefited. Gold was one of those areas, and the shiny metal is again knocking against its $1,300 glass ceiling for the third time this year.

The 10-year bond yield dropped again and has now reached a level last seen in June. It’s a clear sign that economically speaking things may not be what they appear as presented in MSM. The US Dollar (UUP) had recently bounced off the August 1 lows, but seems to have resumed the downtrend and is now approaching that low from above. On the weekly chart, it has now also broken his 200-day M/A, which has not happened since August 2014. It looks to be a bear market in the making.

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Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Harvard professor and chess grandmaster Kenneth Rogoff has said some pretty out there stuff before, in his role as self-appointed crusader against cash, but apparently he’s not done yet. In fact, he might just be getting started.

This time around he sounds like a crossover between George Orwell and Franz Kafka, with a serving of ‘theater of the absurd’ on top. Rogoff wants to give central banks total control over your lives. They must decide what you do with your money. First and foremost, they must make it impossible for you to save your money from their disastrous policies, so they are free to create more mayhem.

Prepare For Negative Interest Rates In The Next Recession Says Top Economist

Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff. Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom.

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Below please find the latest High Volume ETFs Cutline report, which shows how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs are positioned.

This report covers the HV ETF Master List from Thursday’s StatSheet and includes 366 High Volume ETFs ETFs, defined as those with an average daily volume of more than $5 million, of which currently 248 (last week 256) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line (%M/A) from those that have dropped below it.

Take a look:

The HV ETF Master Cutline Report            

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

If you missed the original post about the Cutline approach, you can read it here.

ETF Tracker StatSheet

http://www.theetfbully.com/2017/08/weekly-statsheet-etf-tracker-newsletter-updated-08172017/

THE ROLLER COASTER RIDE CONTINUES

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

A mid-day rally, or was it a dead cat bounce, evaporated with the major indexes closing again below the unchanged line, although by only a slight margin. Volume was low, as it usually is during summer months which, when combined with nervous investors, leaves equities vulnerable. It was the second week of losses for the Dow and S&P, while the Nasdaq has now slipped four weeks in a row, its longest losing streak since May 2016. However, in the bigger scheme of things, this pullback is relatively minor compared to the post-election rally we’ve seen.

Interestingly, the frequently hyped Dow performance YTD has now slipped into second place, as gold’s recent rally pushed it ahead of the blue chip indicator. Gold managed to spike through the $1,300 resistance level today, for the third time this year, but failed to hold it into the close.

In regards to equity ETFs, there were few winners today. Emerging markets (SCHE) took top billing with a gain of +0.73%. Semiconductors (SMH) eked out +0.22% despite weakness in the Nasdaq, and the International SmallCaps (SCHC) ended up +0.35% higher.

Interest rates slipped during the week but closed unchanged today. The US dollar index (UUP) slid -0.33% but remains off the lows for the year enjoying its dead cat bounce while it lasts.

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ETF Data updated through Thursday, August 17, 2017

Methodology/Use of this StatSheet:

1. From the universe of over 1,800 ETFs, I have selected only those with a trading volume of over $5 million per day (HV ETFs), so that liquidity and a small bid/ask spread are assured.
2. Trend Tracking Indexes (TTIs)

Buy or Sell decisions for Domestic and International ETFs (section 1 and 2), are made based on the respective TTI and its position either above or below its long-term M/A (Moving Average). A crossing of the trend line from below accompanied by some staying power above constitutes a “Buy” signal. Conversely, a clear break below the line constitutes a “Sell” signal. Additionally, I use a 7.5% trailing stop loss on all positions in these categories to control downside risk.

3. All other investment arenas do not have a TTI and should be traded based on the position of the individual ETF relative to its own respective trend line (%M/A). That’s why those signals are referred to as a “Selective Buy.” In other words, if an ETF crosses its own trendline to the upside, a “Buy” signal is generated. Since these areas tend to be more volatile, I recommend a wider trailing sell stop of 7.5% -10% depending on your risk tolerance.

If you are unfamiliar with some of the terminology, please see Glossary of Terms and new subscriber information in section 9.

1. DOMESTIC EQUITY ETFs: BUY — since 4/4/2016

Click on chart to enlarge

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) is positioned above its long-term trend line (red) by +2.28% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Not only did the Dow’s 4-day win streak come to an end today, all 3 major indexes showed the same pattern; that is slowly deteriorating momentum throughout the session and closing at the lows. There were no green numbers to be found only varying degrees of losses. Faring the best, were International SmallCaps (SCHC), which gave back only -0.64%. That was in stark contrast to the rest of the field where Transportations (IYT) fared the worst with -2.38% closely followed by Semiconductors (SMH) with -2.37%.

Contributing to this slide were a variety of events ranging from questions about Trump’s agenda to news of a terrorist attack in Spain and disappointing results from Cisco (-4.02%). Dismal Industrial Production data did not help either.

To no surprise, the S&P VIX rallied sharply and surged back to 15 reversing its recent drop. Benefiting from all this uncertainty was Gold, which continued its march towards the $1,300 milestone marker, a level which we have not seen since early last November. Interest rates dropped again with the 20-year Bond (TLT) rallying +0.75%. The US Dollar (UUP) traded in a tight range and managed to add +0.21% for the day.

Please see section 3 below for the effects on our Trend Tracking Indexes (TTIs).

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