ETF/No Load Fund Tracker StatSheet
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STOCKS POST STRONG MAY ENTRANCE, BUT CLOSE WEEK LOWER
[Chart courtesy of MarketWatch.com]
1. Moving the Markets
Equities rebounded as Wall Street kicked off May with a strong rally and the Dow recouping most of the previous day’s losses. Stocks finished the week slightly lower though.
Don’t forget that May kicks off what has traditionally been the worst six months for stocks, which has brought rise to the old saying “sell in May and go away.”
Investors digested a relatively heavy flow of news during the week across both economic and corporate earnings reports, and the tone was pretty mixed overall. Health care and discretionary stocks led decliners, while materials and energy both moved higher on the week.
In earnings news, LinkedIn (LNKD) is the latest social media stock to take a pounding following its earnings report. In the wake of lowering its outlook after Thursday’s closing bell, the stock plunged 18.6%. Chevron (CVX), like fellow Dow component Exxon Mobil (XOM) on Thursday, reported a big dent in its business tied to sinking oil prices. CVX’s reported profit fell 43% and shares dropped 1.8%.
Economic news was mixed throughout the week, with the GDP and consumer spending reports headlining the weak data, while housing indicators were a bit better than economists were looking for. Despite the slower start to the year, economists still expect a rebound in economic growth as the year unfolds. Over the next five trading days, the April jobs report will headline another busy week of both economic and corporate earnings news. Factory orders will be announced Monday, and Tuesday brings the ISM Non-Manufacturing index.
Today’s reversal pushed all of our 10 ETFs in the Spotlight higher with the leader being consumer discretionaries (XLY) with +1.38%, while healthcare (XLV) came in at a close second with +1.35%. The weakest member of the group turned out to be DVY with a gain of 0.50%.
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:
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:
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) slipped as the mid-week pullback proved to be too much to overcome today.
Here’s how we closed this week:
Domestic TTI: +2.49% (last Friday +3.58%)—Buy signal effective 10/22/2014
International TTI: +4.64% (last Friday +5.54%)—Buy signal effective 2/13/2015
Have a nice weekend.
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.
READER Q & A FOR THE WEEK
All Reader Q & A’s are listed at our web site!
Check it out at:
Q: Ulli: When you are out of the market, are you just in cash, or do you have some fund you use that is safe but gives you some return?
A: Scott: Once we go into “Sell” mode, and out of equities, volatility is usually very high, along with the uncertainty of future market direction, so, our first move is into the safety of our money market accounts (cash).
I then observe and evaluate if there is any asset class that bucks the trend and offers us an opportunity for further growth. In the past, bond funds have provided some of that security, although at the next market drop, I can’t be sure as bonds are in a bubble of their own. We really need to get there first, before I can make an assessment as to what we might be investing in.
If the bear market trend is confirmed, some exposure in SH (short S&P 500) maybe a possibility.
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