Market Review – High Volume ETFs On The Cutline – Updated Through 8/17/2011

While the rebound of the past 5 trading days provided welcome relief to those investors who kept their equity ETF positions through the recent market beating, the effect on the cutline has been negligible.

That’s a sign that the recent rebound came from a much oversold position with short covering playing a big role by providing the ammunition needed to push the bearish forces back, at least for the time being.

Tech weakness contributed to a trading day yesterday that started out well to the upside but ended just about unchanged showing lack of conviction in the face of a continuous barrage of reports showing not just domestic but also global weakness.

It looks to me that Wall Street is still counting on the Fed of pulling out another rabbit from the hat via a possible QE-3. Once that sentiment meets reallity, downside momentum may pick up again. I believe that it’s just matter of when not if.

The expanded High Volume ETF Cutline report 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.

The current report supports my theory of continued weakness as only 16 ETFs are hovering above the cutline, while 74 are stuck in bear market territory.

Take a look at the most recent table:

http://www.successful-investment.com/SSTables/HVETFCutline08172011.pdf

Again, the bears still have the upper hand, and I would stay away from making any new equity ETF purchases until this current slide hits support and manages to establish a bottom.

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:

8/4/11 issue

7/28/11 issue

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

About Ulli Niemann

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