[Chart courtesy of MarketWatch.com]
1. Moving The Markets
Major indices once again closed in mixed fashion with the S&P 500 gaining just 0.29%, the Dow dropping 0.27% and the NASDAQ gaining 0.68%. After today’s small gain, the S&P 500 is down 0.2% for the year. However, remember that a flat market is much better than a falling market!
We received China’s fourth quarter GDP numbers today, which showed alleged growth of 7.7% for 2013. This lands above the Chinese government’s target of 7.5% and, while this number doesn’t entail much of a wow factor, we must remember that the Chinese government has made a concerted effort to actually cool growth, particularly for real estate and industrial over-capacity. Therefore, the performance is in line with what the government itself has been planning for.
It may come somewhat as a surprise to you if you have followed the debt turmoil in Europe to know that European stocks are actually at a 5-½ year high. News from China eased European investors’ concerns over a potential credit crunch in China after the Chinese government announced that the central bank injected more than 255 billion yuan ($42 billion) into the financial system.
Our 10 ETFs in the Spotlight did not make much headway, as the indexes remain stuck in a sideways pattern.
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 higher and now remain above their long term trend lines by the following percentages:
Domestic TTI: +4.19% (last close +4.01%)
International TTI: +7.05% (last close +6.79%)