Markets Well-Rested After Holiday Weekend

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Apparently, investors and traders across the board were well rested when the markets re-opened today, because the major indexes roared all day and the S&P 500 advanced to close at a record high for the second trading day. The Dow gained 0.42% and the Nasdaq rose 1.22% on the day. The large gains on the day were mostly attributed to positive M&A activity, as well as a more entrenched hint that the European Central Bank will be lowering interest rates in the near future.

Hillshire Brands (HSH) has been in the news recently as a potential acquirer of Pinnacle Foods (PF) for $4.2bil. However, there is always a bigger fish in the sea and today the hunter became the hunted after we received a report that Pilgrim’s Pride (PPC) is offering to buy Hillshire for $6.4bil. Investors reacted extremely positive to this news and shares of Hillshire gained more than 22% to $45.19. Obviously, Hillshire needs to think long and hard which route it will take.

We also heard from Mario Draghi (ECB President). He believes pre-emptive action, such as a rate cut or quantitative easing, may be needed to tackle any risk of deflation. He also noted that the ECB is preparing a package of policy options for its June meeting, including cuts in all its interest rates as well as targeted measures aimed at boosting lending to small- and mid-sized firms.

Our 10 ETFs in the Spotlight joined the index rally with 3 of them making news highs; 9 of them remain on the plus side 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:

MaxDD

All of them are in “buy” mode, 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. The “Action” column will signal a “Sell” once the -7.5% point is taken out in the “Off High” column.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) headed north and moved deeper into bullish territory:

Domestic TTI: +3.22% (last close +2.71%)

International TTI: +4.32% (last close +3.73%)

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.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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