ETF/No Load Fund Tracker For Friday, May 27, 2011

ETF/No Load Fund Tracker StatSheet




Market Commentary

Friday, May 27, 2011


It was a repeat performance of the prior week, as the markets started out to the downside on Monday and spent the last four trading days trying to climb back. In the case of the S&P 500, it was aimless meandering within a narrow trading range as the index ended up giving back 2 points.

The entire month, the major indexes have been tiptoeing on a balance beam, and it appeared that at anytime the downside could come into play big time. It did not happen yet, but even Dr. Doom, Nouriel Roubini, chimed in with a similar tune in “Stocks teetering on ‘tipping point’ of correction.”

However, for May it looks as though the market will have its first down month since November. Economically speaking, there were no reports with any star power effect that could have moved the indexes; it was simply mediocre news, not enough to make a difference one way or the other.

Today’s figures reflected that going nowhere attitude as the dollar was lower, pending home sales dove, but consumer sentiment rose. Maybe the European debt crises has traders on edge as concerns about a Greek default remain headline news, while Ireland, Spain, Portugal and Belgium are on deck waiting for their turn in the dubious spotlight.

The small movement of our Trend Tracking Indexes (TTIs) reflected market sentiment, and we remain fairly close to last week’s numbers as far as distance to the long-term trend lines is concerned:

Domestic TTTI: +4.47% (last week +4.41%)
International TTI: +2.38% (last week +2.59%)

The markets will be closed  on Monday for Memorial Day weekend after which will be facing a good sized menu of economic reports, including Consumer Confidence, Construction spending, Auto sales, Initial claims and Productivity, just to name a few.

The highlight will be Friday’s unemployment report, which may shed some light as to whether economic conditions are worsening or holding steady.

Have a pleasant Memorial Day weekend.




All Reader Q & A’s are listed at our web site!
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A note from reader Robert:

Q: Ulli: I manage my 457 and my wife’s 401with Worden Stockfinder with which I have replicated your momentums and am now working on your %DD.

I have gone back through a lot of your writings and have read where you mention a confirming indicator but haven’t found what it is. Is it proprietary? I have studied market timing for the past 10 years or so and find your system to be as good as any and better than more than a few. Before I found your system, I was using M/A (Moving Average) crossovers but the DD (DrawDown) is much greater than your stop loss.

A: Robert: You must have read way back in the archives, because I no longer use the confirming indicator. It used to be the DJ Transportation Index, but that was a long time ago.

With the use of the trailing sell stops, I found this no longer necessary. I too used to go with the M/A crossovers only, but we had to give back way too much in profits, before the trend lines crossed again to the downside; especially during a buy cycle duration of less than 6 months.



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About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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