Markets Turn Around After Worst 3-Day Start Since ‘08

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks rallied big time for a second straight day. The Dow advanced 323 points today and has almost wiped out early-year losses. The advance was broad, with the S&P materials, energy and technology sectors each rising more than 2%, leading the day’s gains.

The same forces that sparked the market bounce Wednesday — stabilization in oil prices and rising hopes for more aggressive stimulus from central bankers in the Eurozone — drove prices higher again Thursday.

U.S. crude oil, whose free-fall was among the catalysts for the recent selloff in stocks, gained for a second day, settling at $48.79 per barrel. Signs that oil prices may be stabilizing have boosted investor sentiment, although market analysts were still not ready to say prices had found a floor.

A continuation of good economic data at home this morning also gave Wall Street reason to breathe more easily. The number of Americans filing initial jobless claims fell 4,000 last week to 294,000. That positive news follows Wednesday’s better-than-expected readings on private job creation last month and a temporary sizable drop in the nation’s deficit for November.

Again, all of our 10 ETFs in the Spotlight closed up with iShares Global 100 (IOO) being the winner with a gain of +1.95% for the day. Two new highs were made as the YTD table below shows.

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.

Here are the 10 candidates:

MaxDD

The above table simply demonstrates the magnitude with which some of the ETFs are fluctuating in regards to their positions above or below their respective individual trend lines (%M/A). A break below, represented by a negative number, shows weakness, while a break above, represented by a positive percentage, shows strength.

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

YTD

Again, 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 has been taken out in the “Off High” column.

3. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) improved again, however, the International one still remains on the bearish side of its trend line:

Here’s how we ended this day:

Domestic TTI: +2.88% (last close +2.07%)—Buy signal since 10/22/2014

International TTI: -1.61% (last close -3.02%)—New Sell signal effective 12/15/14

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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