An Elegant Fall From Grace

Tue pic

[Chart courtesy of]

1. Moving the Markets

Wow, what a surprise; no new highs! Despite Crude oil taking the lead to the upside, the major indexes lagged and closed lower. You can thank Fed Pres Dudley for jawboning about potential interest rate hikes sometime this year, which took the starch out of yesterday’s rally. Given the continuous flow of unimpressive economic data points, Dudley’s hint towards higher rates seem to me an attempt to keep the markets in check, as odds are very low that any rate hikes are forthcoming anytime soon.

Over the past week, markets have continued to climb to new record highs, then drop the next day and repeat this cycle over and over again. Thus, the headline “an elegant fall from grace…” Perhaps investors took a pause from their recent streak of exuberance today as they await Wednesday’s release of the minutes from the latest Federal Reserve meeting that will offer more clues on the trajectory of U.S. interest rates.

There was an interesting press release today from one of the nation’s largest health insurer’s, Aetna. Word on the street, is that Aetna (potentially) intends to pull out of about 70% of the Obamacare insurance exchanges it participates in. A spokesperson from the company said that they lost roughly $200 mil on individual plans and that they needed a larger amount of healthy plan members to offset the large amount of sick patients that are the heavier users of their services.

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 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) came off their highs as the major indexes to everyone’s shock closed below the unchanged line.

Here’s how we ended up on 8/16/2016:

Domestic TTI: +2.96% (last close +3.22%)—Buy signal effective 4/4/2016

International TTI: +4.69% (last close +4.92%)—Buy signal effective 7/19/2016

Disclosure: I am obliged to inform you that I, as well as my advisory clients, own some of the ETFs listed in the above table. 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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