ETF/No Load Fund Tracker Newsletter For Friday, January 17, 2014

ETF/No Load Fund Tracker StatSheet





Market Commentary

Friday, January 17, 2014


Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks ended the past five trading days in somewhat of a mixed state. Essentially, the S&P and Dow traded flat this week, while the Nasdaq finished a bit higher as the chart above shows. Throughout the week there has been upward pressure on the market stemming from positive housing data; however, we also saw a number of quarterly corporate earnings reports miss the mark. Corporate earnings have been a little hit and miss so far this quarter, which has provided little incentive for stocks to add to last year’s gains.

The Federal Reserve gave us some positive news that domestic industrial production rose 0.3% in December, which makes it 5-months in a row of positive growth.

The USD gained against most major currencies (except the pound and yen) this week despite the news that U.S. housing starts dropped from a 5-year high. The Wall Street Journal dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.44% at 81.38.

The discouraging revenue outlook for Intel disappointed the market this week. Intel (INTC) shares fell by about 5% this week, which can impact ETFs that are invested heavily in the stock such as Market Vectors Semiconductor ETF (SMH) and the iShares PHLX Semiconductor ETF (SOXX).

Our 10 ETFs in the Spotlight followed the sideways theme and only 3 out of 10 are showing positive numbers YTD.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

In other words, none of them ever triggered their 7.5% sell stop level during this time period, which included a variety of severe market pullbacks but no move into outright bear market territory.

Here are the 10 candidates:


All of them are in “buy” mode meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

Now let’s look at the MaxDD% column and review the ETF with the lowest drawdown as an example. As you can see, that would be XLY with the lowest MaxDD% number of -5.73%, which occurred on 11/15/2012.

The recent sell off in the month of June did not affect XLY at all as its “worst” MaxDD% of -5.73% still stands since the November 2012 sell off.

A quick glance at the last column showing the date of occurrences confirms that five of these ETFs had their worst drawdown in November 2012, while the other five were affected by the June 2013 swoon, however, none of them dipped below their -7.5% sell stop.

Year to date, here’s how the above candidates have fared so far:


3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) traded within a narrow range as well and remain above their long term trend lines by the following percentages:

Domestic TTI: +4.01% (last Friday +4.30%)

International TTI: +6.79% (last Friday +6.83%)

Have a great week.


Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.



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


A note from reader Don:

Q: Ulli: Is your 39 week moving average really a 195 day moving average?  (39 weeks x 5 trading days per week = 195)

A: Don: There is a small difference. With a 39-week M/A, you recalculate the average only every Friday while when using a 195 day M/A, you would recalculate every day. I prefer the former, though in the end it may not make that much difference. Whatever you prefer, you should use.



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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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