Stocks In Rally Mode

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

For the second day in a row, the major indexes closed higher, but today the gains were solid as, after a strong opening, stocks never looked back and managed to add to their early gains.

Helping matters were reports from China over the weekend that the PBOC saw “more room” for accommodating monetary policy should the economy stay soft and inflation remain weak. Considering that slowing growth in China had been a major concern that was quite some encouragement and equities took the hint and ran with it.

There was continued softness in consumer spending confirming a slowing economy but pending home sales reached their highest level since the middle of 2013. In the end, good and bad equaled a nice rally.

With today’s sharp move higher, it comes as now surprise that all of our 10 ETFs in the Spotlight closed up led by the Mid-Caps (IWS) with +1.33%; that was closely followed by the low volatility S&P (SPLV), which gained +1.30%.

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.

For hundreds of ETF/Mutual fund choices, be sure to reference Thursday’s StatSheet.

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) recovered from last week and headed higher. Here’s how we ended this bullish day:

Domestic TTI: +3.46% (last close +2.90%)—Buy signal effective 10/22/2014

International TTI: +3.97% (last close +3.47%)—Buy signal effective 2/13/2015

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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