Comcast Acquires Time Warner; New Gold ETFs Keep Surfacing

Ulli Market Commentary Contact

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[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Big news for Comcast and Time Warner Cable today. Comcast (CMCSA) agreed to acquire Time Warner Cable (TWC) for $45.2 billion in stock. The closing of this deal essentially combines the two largest U.S. cable companies and creates a major obstacle for competition from phone and satellite providers.

Time Warner Cable’s stock jumped 7 percent to $144.81 at the close in New York, while Comcast fell 4.1 percent to $52.97. While this acquisition does involve two of the industry’s largest players, let’s not forget that there has been an industrywide decline in cable TV subscribers as newer Internet based content providers such as Netflix and Hulu are gaining audience. Comcast will have to find a way to compete in the modern age.

Gold settled higher today as positive technical factors outweighed a rise in investor appetite for other, riskier assets following comments by the new U.S. Federal Reserve chief about the economic outlook. Gold has gained around 7 percent since the beginning of the year benefiting by concerns about emerging markets, with China as a major focus. Remember that Gold fell 28 percent in 2013, which broke a 12-year streak of annual gains.

As more attention is turning to gold amongst the volatility seen throughout the markets this year, a number of new gold focused ETFs have emerged. Many of the funds provide gold exposure in different currency terms by utilizing gold and currency futures. Amongst the newer on the block are the Gartman Gold/Euro ETF (GEUR), the Gartman Gold/British Pound ETF (GGBP) and the International Gold ETF (GLDE). As market volatility impacts the USD, some believe that we now have unprecedented access to efficiently held gold in different currency terms to avoid undesired and concentrated exposure to a single currency.

For the sake of disclosure, I have no holdings in the above mentioned stocks/ETFs.

Our 10 ETFs in the Spotlight joined the rally and headed higher as you can see in the tables below.

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:

MaxDD

All of them have moved back into “buy” mode after this recent market hiccup meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

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

YTD

To be clear, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) headed higher with the major indexes and closed as follows:

Domestic TTI: +3.54% (last close +2.98%)

International TTI: +5.68% (last close +5.41%)

Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs in the Spotlight. 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.

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