Going Nowhere

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

It was a slow day on Wall Street today. All indexes ended slightly lower, mostly due to the fact that we heard a bit of disappointing news on the state of our economy.

The government reported today that the economy grew at a slightly lower-than-expected 1.5% in the third quarter. That was a sharp drop from the 3.9% growth in the second quarter and below the 1.6% growth expected by economists.

We received an impressive earnings report from Starbucks (SBUX) today. The company announced that sales were up 18% in Q3 on $4.9 billion in revenue that was largely attributed to a 4% increase in global consumption. Their earnings for Q3 came in at 43 cents a share, which is 6 cents higher than a year earlier.

Wall Street is still trying to figure out whether or not an interest rate hike could take place later this year, after the Fed’s comments yesterday. Most analysts seem to be of the mindset that the odds are 50-50 at this point.

6 of our 10 ETFs in the Spotlight closed lower during this directionless session. Leading to the downside was the Global 100 (IOO) with -0.50%, while gaining the most was Healthcare (XLV) with +0.45%.

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 Domestic Trend Tracking Indexes (TTIs) changed opnly slightly as the markets meandered aimlessly. Domestically, we’re still stuck slightly above the trend line with no clear follow through so far. You could look at it as 5 days of sideways trading.

When this type of pattern occurs, a breakout will be the eventual consequence, which could be either to the upside or the downside. In case of the latter, it would indicate a (temporary) top in the market. In order to minimize the odds of a potential whip-saw signal, (A Buy followed by an immediate Sell), I prefer a stronger piercing to the upside before issuing a new “Buy” signal for “broadly diversified domestic ETFs/Mutual Funds.

Here’s how we closed:

Domestic TTI: +0.46% (last close +0.64%)—Sell signal effective 8/24/2015

International TTI: -2.88% (last close -2.61%)—Sell signal effective 8/21/2015

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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