Diving Into The Close

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

The old adage “buy the rumor and sell the fact” certainly rang true today as the upward momentum of the past couple of days continued early in the session in anticipation of Trump’s mother of all tax cuts. While the actual announcement confirmed some leaked information, some analysts considered the tax plan a “wish list with no details.” You can read highlights of the proposal here.

While Trump’s announcement had a questionable effect on the markets there were others that certainly raised eyebrows. Case in point was the crashing of Canada’s housing bubble as its biggest mortgage lender, Home Capital Group, exploded and its stock price tumbled by 61%. Other home lenders joined the party and were dragged down as well. These are banking institutions, which means that depositors that jogged to the bank yesterday are now in a full on sprint.

The major indexes went into retreat mode and stumbled into the close and ended up slightly in the red, while the 20-year Treasury bond (TLT) rallied, as interest rates retreated, and gained +0.55%. Bucking the trend were SmallCaps (IWN), which ended up +0.30% and Aerospace & Defense (ITA) with +0.21%.

The US dollar managed a rebound of +0.28% but remains firmly stuck not only below its psychologically important 100 level but also below its 6-month support line, namely the 200-day M/A.

  1. ETFs in the Spotlight (updated for 2017)

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified and sector ETFs from my HighVolume list as posted every Saturday. 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.

The below 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 2017 candidates have fared so far:

Again, the %M/A column above shows the position of the various ETFs in relation to their respective long term trend lines, while the trailing sell stops are being tracked 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.

  1. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) ended the day mixed with the domestic one barely changing and the international one rising.

Here’s how we closed 4/26/2017:

Domestic TTI: +3.16% (last close +3.15%)—Buy signal effective 4/4/2016

International TTI: +7.44% (last close +7.22%)—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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