Market Commentary – High Volume ETFs On The Cutline – Updated Through 7/27/2011

Continued uncertainty from the lack of progress in the debt ceiling talks pressured the markets, and the major indexes lost for the 3rd day in a row.

Not helping were a worse than expected durable goods orders report indicating that an economic slowdown may be indeed a possibility. That’s no surprise to me as I have been elaborating for some time on the theme that a stimulus induced ‘recovery’ simply does not have legs.

Yesterday’s drop did some technical damage in that the S&P 500 broke again below its 50-day moving average by -0.50%, but remains above its more important long-term 200-day average by +1.85%.

As I mentioned last Friday, our international Trend Tracking Index (TTI) had been doing the trend line dance by moving above and below it without clear direction. As of yesterday, the international TTI again closed below its trend line by -0.97%, which is in tune with our current position of not being invested in that market.

The expanded High Volume ETF Cutline report now includes all ETFs above and below the cutline (trend line). 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 90 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.

Currently, there are 54 ETFs hovering above this dividing line between bullish and bearish territory (shown in yellow), while 34 of them are positioned below it.

Go ahead and review this expanded ETF table:

Similar to last week, a quick glance reveals that currently 2 ETFs (IDX and FXA) have made new highs (0.00% in the DD% column), while they are also sporting positive momentum numbers across.

As you can see, there are several other ETFs on the positive side, but their DD% numbers are a bit high and/or in some cases, the trend line has been crossed already by a fairly high percentage.

Nevertheless, as new ETFs cross above the line, you can easily track them and make your decisions accordingly.

If you are a new reader and missed the original Cutline report, which also featured some “how to use” information, please review it here.

Quick Reference:

7/20/11 issue

7/13/11 issue

7/6/11 issue

6/29/11 issue

6/22/11 issue

6/15/11 issue

6/8/11 issue

5/25/11 issue

5/18/11 issue

5/11/11 issue

5/4/11 issue

4/27/11 issue

4/20/11 issue

Disclosure: No holdings in ETFs discussed

About Ulli Niemann

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