ETF/No Load Fund Tracker Newsletter For Friday, May 18, 2012

ETF/No Load Fund Tracker StatSheet




Market Commentary

Friday, May 18, 2012


US stocks closed lower Friday with the broad markets closing out the worst week of the year. Despite Facebook’s much talked about IPO today, shares of the social networking site barely rose above the offering price.

Investors remained wary of the markets as latest reports suggested the European Central Bank and the European Council are preparing for Athens’ eventual exit from the European Union. The nation’s banking sector has come under added stress as many depositors have withdrawn money fearing forced conversion of the currency if eased out of EU.

The benchmark US Treasury changed little after coming close to a record low level ahead of next week’s $99 billion coupon-bearing debt auction.

The Dow Jones Industrial Average (DJIA) ended the week at 12,369.38, its 12th down day in the last 13. The blue-chip index is down 6.4 percent for the month and is off 3.5 percent for the week.

The S&P 500 Index (SPX) lost 9.64 points to finish the week at 1295.22, its third straight week of losses, with healthcare witnessing the steepest fall while telecommunications gained the most among its 10 industry groups.

The NASDAQ Composite Index (COMP) tumbled 34.90 points to close at 2,778.79, down 5.3 percent for the week.

Treasury 10-year benchmark yields rose 0.01 percentage point to 1.71 percent, down 0.11 percent for the week. The yield had dropped to 1.6937 percent during the day’s session, approaching the record 1.6714 set on Sep 23.

ETFs in the news:

Among the day’s top gainers, the Barclays iPath S&P VIX Short-Term Futures ETN (VXX) remained on top, rallying 6.48 percent for the day. The CBOE volatility index rose 2.49 percent for the day. VXX has added nearly 30 percent in the past two weeks as the eurozone continues to spook global markets.

Meanwhile another volatility tracking product, the ProShares VIX Short-Term Futures ETF (VIXY) also closed an impressive 6.27 percent higher. The fund traded nearly two million shares today, about four times more than its daily average volume.

The State Street SPDR KBW Capital Markets ETF (KCE) was among the day’s top losers, shedding 1.63 percent for the day. The Financial Select Sector SPDR Fund (XLF) lost 1.15 percent on a day when financial ETFs got hammered across the board.

Our Trend Tracking Indexes (TTIs) headed lower as well, with the domestic one hanging on to the plus side of the trend line. The International TTI has been heading further south and is now entrenched in bear market territory.

Here are this week’s closing numbers:

Domestic TTI: +1.47% (last week +3.26%)

International TTI: -5.08% (last week -0.18%)

Several sell stops were triggered this week, and I took evasive action. On the chopping block for Monday will be VTI, one of our core holdings, unless, of course, a huge rally is materializes all of a sudden.

These are extremely uncertain times in the market, and I suggest you make plans as well to exit your most volatile holdings.

Have a great week.


Disclosure: No holdings



All Reader Q & A’s are listed at our web site!
Check it out at:

A note from reader Kent:

Q: Ulli: One would have to think, with the huge numbers average investors chasing yield, and with the launching of new ETF’s that are upping the risk level, like the high yield ETF that you mentioned, and with yields about as low as they can go, that we are setting up for the bond crash of a lifetime.

A: Kent: Well, long term you could be right. However, in the short-term, yields could go a lot lower due to the Europe crisis unfolding and worsening every day. Once a crash/contagion happens, the flight to safety will be on, which will be into US Bonds and similar instruments.

In case you forgot, I recommend a trailing sell stop of 5% for bond ETFs/funds.



Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:


Back issues of the ETF/No Load Fund Tracker are available on the web at:

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
This entry was posted in ETF Tracker and tagged , , , , , , , , . Bookmark the permalink.

Comments are closed.