[Chart courtesy of MarketWatch.com]
1. Moving The Markets
Stocks rebounded today which resulted in the S&P 500 posting its largest gain so far this year. Positive market sentiment today seemed to rally around the Fed’s Richard Fisher and Charles Plosser optimistic economic recovery as they expressed continued support for the central bank tapering. However, many investors seem to feel that a stronger U.S. economy could lead to the Fed dialing back the stimulus at a quicker pace, which would not bode well for the equity market.
One of the largest movers of the day was Tesla Motors (TSLA), which surged 16% and experienced 2x normal trading volume as it announced that it sold 20% more cars in Q4 than anticipated. Also today, JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) released their quarterly earnings, which actually beat expectations but only resulted in minimal gains in their stock price.
The dollar gained against the yen, but gained no ground against the euro.
2014 is still going well for Gold it seems as the Direxion Daily Jr Gld Mnrs Bull 3X Shrs (JNUG) leads the pack in YTD return with 36.28%. Trailing not far behind in the #2 spot of largest YTD return is the Velocity Shares 3x Inverse Crude ETN (DWTI), which has realized a 23.07% return.
Yesterday’s market anxiety vanished as our 10 ETFs in the Spotlight picked up steam and recovered most of their losses.
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 sell off in the month of June 2013 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) headed south as well, but they remain above their long term trend lines by the following percentages:
Domestic TTI: +4.18% (last close +3.70%)
International TTI: +7.02% (last close +6.26%)