Energy Sector Pulls Up Wall Street

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The major indexes headed higher as energy shares and oil prices proved to be the catalyst to drive the markets. Helping the advance were polls allegedly showing that Hillary Clinton’s lead over Trump widened, at least that’s what MSM was heavily promoting. Clinton’s views are well known and considered to be positive for equities.

Also assisting the market was heavy weight Apple, whose shares jumped higher as a result of the worsening recall crisis by Samsung, its main competitor. The US bond markets were closed due to the Columbus Day and there were no economic news on the calendar. Gold and the US dollar both rallied.

I have repeatedly posted graphs and commented on the divergence between the S&P 500, or the entire US stock market for that matter, and underlying realities such as earnings and GDP expectations. The dilemma is not just limited to the US but exists globally as well. Take a look at this chart, courtesy of ZH, which shows the effect of Central Bank market manipulation at its finest:

chart1 

As you can clearly see, the expansion of global stock prices directly correlates to the expansion of the global central bankers’ balance sheet. In other words, markets are being manipulated higher regardless of underlying realities such as GDP estimates. While this can go on for a while longer, I would not be surprised to see a black swan event upset this “finely tuned” market environment. When it happens, watch out below.

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 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)

Both of our Trend Tracking Indexes (TTIs) headed north as energy and oil pushed the major indexes higher.

Here’s how we closed 10/10/2016:

Domestic TTI: +2.08% (last Friday +1.89%)—Buy signal effective 4/4/2016

International TTI: +4.36% (last Friday +4.12%)—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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