China, Korea Both Impacting U.S. Markets

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

2016 has been awful so far for the bulls, with the Dow logging its worst three-day stretch in a new year since the financial-crisis days of 2008. All major indexes closed at least 1.15% lower today and there were no signs of a change to come.

Some news agencies are blaming the market slide today on the news about North Korea having successfully tested a hydrogen bomb. Others say that the news only added to the already down trending market set in motion Monday when a major plunge in shares of mainland China stocks renewed global growth fears of the state of the global economy. I think certain realities, such as weak domestic economic data points and current lack of Fed support, are coming home to roost.

Adding to the market’s woes Wednesday was another sharp drop in the price of U.S. Crude Oil, which plunged 5.5% to below $34 a barrel amid the growing worries related to slowing growth.

As it related to energy, the biggest anchor on the Dow today was Chevron (CVX), showing that the woes in the energy patch continue. The stock dropped $3.54 to $86.07, which accounted for a decline of about 26 Dow points.

All of our 10 ETFs in the Spotlight hit the skids as well and closed in the red. Faring the worst was the Equal Weight S&P (RSP) with -1.83%. As could be expected, Consumer Staples (XLP) held up best by giving back only -0.34%.

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 Domestic Trend Tracking Index (TTI) got pushed deeper into bear market territory making our current choice of being on the sidelines a wise one.

Here’s how we closed the day:

Domestic TTI: -1.81% (last close -1.39%)—Sell signal effective 11/13/2015

International TTI: -7.23% (last close -5.96%)—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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