[Chart courtesy of MarketWatch.com]

1. Moving the Markets

It had to happen eventually. The winning streak came to an end today, as uncertainty reigned in regards to tax cuts and corporate earnings, of which some 200 S&P companies are scheduled to report this week. Of course, given current market levels, we are way overdue for a pause.

Interestingly, the markets did not find any footing during the session, as we have become accustomed to, and ended up closing at the lows for the day. As ZH reports, it has now been 242 days since the US equity market has dipped by 3% or more… a new dubious all-time record, and to me another confirmation that markets are manipulated. As far as today is concerned, stocks had their worst outing in 6 weeks.

Despite the major indexes slipping, we saw some green numbers in ETF space. Gaining the most was our winner YTD, namely Semiconductors (SMH), which managed to buck the Nasdaq’s downtrend by gaining +0.38%. Divided ETFs (SCHD) also closed on the positive side with +0.08%. However, red numbers were dominant with Emerging Markets (SCHE) giving back -0.80%, while Aerospace & Defense (ITA) and SmallCaps retreated -0.70% and -0.67% respectively.

The yield on the 10-year bond ended up dropping 1 basis point to 2.38% after having tested higher ground all day, namely the 2.40% level. Gold was lower for most of the session, then suddenly spiked and managed to reclaim its 100 day M/A level. The US dollar (UUP) rallied but faded into the close with a tiny gain of +0.12%.

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By Simon Black

On April 30, 1934, under pressure from Italian-American lobby groups, the United States Congress passed a law enshrining Columbus Day as a national holiday.

President Franklin Roosevelt quickly signed the bill into law, and the very first Columbus Day was celebrated in October of that year.

Undoubtedly people had a different view of the world back then… and a different set of values.

Few cared about the plight of the indigenous who were wiped out as a result of European conquest.

Even just a few decades ago when I was a kid in elementary school, I remember learning that ‘Columbus discovered America’. There was no discussion of genocide.

It wasn’t until I was a sophomore at West Point that I picked up Howard Zinn’s People’s History of the United States (and then Columbus’s own diaries) and started reading about the mass-extermination of entire tribes.

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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 272 (last week 283) 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/2017/10/weekly-statsheet-etf-tracker-newsletter-updated-10192017/

ENDING THE WEEK WITH A BANG

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The major indexes opened up the session on the positive side of the unchanged line and never looked back, as the relentless ascent into record territory continued unabated. The big assist came from the Senate when it passed a “budget blueprint” for the next fiscal year, which is supposed to make way for Trump’s tax cuts, which in turn are vital to keep the bullish meme alive. At least, that’s the interpretation for the moment.

Nevertheless, the bulls feasted on the news, and we closed solidly in the green. GE performed magic today by falling 7% in pre-market trading based on abysmal earnings, horrible cash flow and slashing its profit forecast. A mid-day V-shaped recovery, for no reason, allowed the company to erase all losses and to close in the green. Amazing…

Equity ETFs had a good day, and we saw consistent gains across the board with only a couple of exceptions. Aerospace & Defense (ITA) took the lead with +1.27%; Transportations (IYT) came in second place with +0.90% while MidCaps (SCHM) placed third with +0.63%. The only red figures came from the International arena with the International SmallCaps (SCHC) sliding -0.22% and the International ETF (SCHF) giving back -0.09%.

Interest rates rose with the yield on the 10-year bond jumping 6 basis points to end the week at 2.39%, its highest level since early July. Crude oil rose and gold slipped. The US dollar (UUP) soared +0.58% after the budget vote, which was its best daily performance in 9 months.

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ETF Data updated through Thursday, October 19, 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 +3.11% 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

Early morning selling pressure, possibly related to the 30^th anniversary of the 1987 crash, pushed the major indexes lower, with the S&P 500 being down a non-newsworthy -0.33%, before starting the long climb towards the unchanged line.

Other reports were mixed with earnings being robust while political tensions in Europe and questionable economic data out of China underpinned the early negativity. In the end, two of the three major indexes managed to close in the green with the Nasdaq trailing and closing in the red, in part due to Apple (AAPL) having a really bad day (-3.78%).

A spike in the VIX to 11 caused the markets to show the early weakness, but manipulating this index off the highs and pushing it sharply lower contributed to today’s rebound. Still, the recovery was not much to brag about, as most ETFs closed on a mixed note. On the upside, we saw Dividend ETFs (SCHD) leading with a gain of +0.23% with MidCaps (SCHM) occupying second place (+0.10%). Heading up the losers were Emerging Markets (SCHE) and International SmallCaps (SCHC), which retreated -0.83% and -0.63% respectively.

In the interest rate arena, the yield on the 10-year bond dropped 1 basis point to 2.33% helping the 20-year bond price (TLT) to squeeze out a +0.18% gain. Gold pushed towards its $1,300 level again, while oil slipped -1.23%. The US dollar (UUP) followed suit by gapping down and losing -0.25%.

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