ETF/No Load Fund Tracker Newsletter For Friday, October 5, 2012

ETF/No Load Fund Tracker StatSheet




Market Commentary

Friday, October 5, 2012


US equities closed mixed Friday, but posted weekly gains after initial euphoria over a significant drop in US unemployment rate faded, as a cloudy outlook on global economy gave way to caution ahead of the quarterly earnings season beginning next week.

The unemployment rate fell to 7.8 percent in September, dropping below the eight percent mark for the first time since President Obama took office in January 2009. Following the revised estimate of 142,000 job additions in August, the economy added 114,000 jobs in September, a Bureau of Labor Statistics report revealed. Also hourly earnings climbed 0.3 percent for the month.

Higher 1.3 percent on the week, the Dow Jones Industrial Average (DJIA) added 35 points to finish at 13,610. Within the 30-stock blue-chip index, winners outpaced laggards 20 to 10 as the Dow industrials hit its highest since December 2007.

The S&P 500 Index (SPX) closed fractionally lower at 1461, still managing a 1.4 percent gain for the week while the NASDAQ Composite Index (COMP) slipped losing 13 points to close at 3,136.

Treasury bond yields rose to the highest level in nearly two weeks after an unexpected drop in US unemployment rate fuelled concerns of inflation, thus diminishing the allure of safe havens. The benchmark 10-year Treasury yield climbed five basis points to 1.73 percent while yield on 30-year Treasury bonds jumped seven basis points to 2.96 percent.

Across the Atlantic, the pan-European Stoxx Europe 600 index rallied one percent on better than expected US jobs data, led by risk-sensitive sectors like oil firms and banks.

Despite ECB President Mario Draghi indicating the central bank’s willingness to help Spain, Finance Minister Luis de Guindos said Madrid would not require a bailout.

In Greece, the Athens General Index soared 5.1 percent over media reports National Bank of Greece SA and Eurobank Ergasias SA may merge to create the country’s biggest bank.

Car makers led the rally for the second straight day in Frankfurt with the German DAX 30 index rising 1.3 percent for the day and 2.5 percent for the week.

In London, the FTSE 100 index rose 0.7 percent, lifted by banks and miners. Rio Tinto Plc and Royal Dutch Plc led the bourse rally, rising 2.2 percent and 0.9 percent, respectively.

The Spanish IBEX 35 index also rallied, helped by index heavyweight Banco Santander. Spanish 10-year borrowing costs crashed 21 basis points to 5.66 percent.

Led by banks Societe Generale and Credit Agricole SA, the CAC 40 index ended 1.6 percent higher in Paris, rising 3.1 percent for the week.

In the ETF space, bond funds were on the back foot as prices crashed on improved risk sentiment. The iShares Barclays 20 Year Treasury Bond Fund tumbled 1.30 percent as investors grew worried about higher inflation due to the Fed’s targeting of the longer end of the yield curve.

Precious metals, used mostly as a hedge against inflation, however, declined with gold futures tumbling $15.70. The iShares Silver Trust slumped 1.41 percent while the SPDR Gold Trust shed 0.57 percent.

Energy commodities also tanked with crude futures sinking about two percent. After a short rally, the United States Oil Fund (USO) slid 1.74 percent on the day. The Guggenheim Solar ETF also tanked 2.88 percent after its biggest holding First Solar Inc crashed 11 percent.

In this week’s video, Jimmy Rogers and Mark Faber appear on CNBC via phone interview, and they have some very interesting comments not only on the QE programs but also in regards to the presidential candidates. Thanks go to ZeroHedge for this link:

Our Trend Tracking Indexes (TTIs) headed higher and are maintaining their position on the bullish side of the trend line:

Domestic TTI: +3.29% (last week +3.14%)

International TTI: +4.07% (last week +2.51%)

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 JR:

Q: Ulli: I rolled over my 401k to a self directed IRA. I was looking to follow a model portfolio.  Does one select a portfolio on your website, then take the positions, then sell out of the position when a line is drawn thru the position…is that how it works…or is there an instruction area on your website?

A: JR: Yes, you can use any model portfolio that suits your risk profile. However, once you have established your positions, you need to track the high points of your trailing sell stops on a daily basis. You should execute your sell stops when the price of an ETF drops more than 7% (for domestic equities) from its high since you purchased it using day ending prices only.

Much of this has been discussed in my free e-Book on that subject.



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:


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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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