ETF Tracker StatSheet
A WILD RIDE: GOLD CRASHES, BONDS LOSE OVER $1 TRILLION IN SECOND WORST WEEK EVER
[Chart courtesy of MarketWatch.com]
- Moving the Markets
It was wild week in the markets, and it continued today despite the bond market being closed. Besides the Dow making a new all-time high, and other indexes joining to varying degrees in the Trump rally, reaction in other assets classes was anything but reassuring.
ZH adds some color:
Over 85,000 gold futures contracts (over $10 billion) traded as gold plunged from $1260 to $1230 as US equity markets opened. This is the worst 7-day run for gold since November as Dec rate hikes were jawboned more likely.
Down 5 days in a row, today’s crash has dumped the precious metal to its lowest price since June…
Of course, this makes perfect sense, as EM FX collapses, inflation expectations spike most in years, and Trump’s debt-funded fiscal spending plan means more QE.
For the week, investors had to swallow over $1 trillion on bond losses as interest rates spiked, which was the worst decline since the 1981 bond market crash.
Despite the Dow making new all-time highs this week, and the S&P hovering within striking distance of doing the same, Emerging Markets collapsed and several Asian countries had to intervene in their currencies to stem the sell-off.
This week’s market action was anything but orderly and had “disconnect” written all over it. The chart of the Dow looks like a “blow-off” top has been established, and I can’t help but think that if bond yields continue rise next week, domestic equities will be negatively affected.
- 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.
- Trend Tracking Indexes (TTIs)
Our Trend Tracking Indexes (TTIs) improved from last week, as the Trump victory caused the exact opposite of what had been expected. The dreaded sell-off did not occur (yet); instead we saw the Dow making a new all-time high despite bonds getting clobbered as interest rates spiked sharply. Hardly a comforting combination.
Here’s how we closed 11/11/2016:
Domestic TTI: +0.73% (last Friday -0.14%)—Buy signal effective 4/4/2016
International TTI: +2.14% (last Friday +0.50%)—Buy signal effective 7/19/2016
Have a great weekend.
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.
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