ETF/No Load Fund Tracker Newsletter For Friday, January 25, 2013

ETF/No Load Fund Tracker StatSheet




Market Commentary

Friday, January 25, 2013


US equities rose Friday, lifting the S&P 500 index above the 1,500 mark for the first time since late 2007, as investors welcomed a batch of better-than-expected corporate results and German business confidence topped estimates.

Stocks edged higher today as German business confidence took an unexpected strong jump in January. The Munich-based Ifo Institute’s business climate index rose to 104.2 from 102.4, adding to signs that Europe’s largest economy may be recovering from a widely-suspected fourth-quarter contraction.

Investors also tracked comments from ECB President Mario Draghi as the European Central Bank boss spoke at the World Economic Forum in Davos. Draghi said a recovery is possible in the second half of the year as economic activity in the region was stabilizing.

Separately, the ECB said banks will repay EUR 137.2 billion of the more than EUR 1 trillion of its emergency three-year loans, known as long-term refinance operations or LTRO, in another sign the euro region’s debt crisis is allegedly abating.

Shares moved off intra-day highs briefly Friday after the Commerce Department reported sales of new US homes fell 7.3 percent to an annual clip of 369,000 in December.

The Dow Jones Industrial Average (DJIA) rose 71 points to 13,896, up 1.8 percent for the week. The S&P 500 Index (SPX) rose 8 points to 1503 with consumer discretionary and energy companies advancing the most. All the 10 business groups within the index gained as the benchmark closed over 1,500 for the first time since December 2007. The index has gained for eight consecutive days, the longest string of advances since the nine-day run in early 2004.

Treasury prices fell the most since September after data showed European banks plan to repay more of the ECB’s three-year LTRO loans than economists had forecast, damping demand for safer assets.

US government securities were not helped after the Commerce Department said new-home sales fell more than anticipated, but continued to rise on an annual basis, bolstering sentiment that the housing sector is on the mend.

The euro surged to a 11-month high against the dollar Friday after a ECB report showed European banks plan to repay larger-than-anticipated chunk of cheap three-year loans provided by the central bank.

Economists, however, believe this is bad news for the economic region as it increases the divergence between the euro and the underlying economy, which is in bad shape.

Meanwhile, across the Atlantic, European stocks rose for a third day after upbeat German business data and encouraging comments from the European Central Bank boosted investor sentiment.

Trend wise, our Trend Tracking Indexes (TTIs) followed the markets into the nosebleed section and ended the week as follows:

Domestic TTI: +3.12% (last week +3.10%)

International TTI: +11.21% (last week +10.45%)

How high can you go remains the question for which there is no answer. The best way is to “ride the trend until it ends when it bends;” at that point you need to pay attention to your trailing stops and execute them as they get triggered.

Have a great week.




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

Q: Ulli: I’m not sure I understand your models. Why are the funds chosen not the highest rated funds (by M-index or your other measurements)? Would it not be possible to find higher rated funds that essentially are in the same categories and hence have the same asset allocations but better funds?

A: Brad: Of course, you can piece your own portfolio together using the information I provide in the StatSheet. However, many investors prefer not living too much on the edge and prefer using a ready-made portfolio designed not on maximizing gains but achieving a balance within various asset classes in order to better deal with market volatility.

It’s all about risk tolerance, and if you can stomach it, you can select only the high performers.



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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