Equities On A One-Way Street

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

After a higher opening, the markets remained steadfast and unwavering in making this session a positive one after the past few of days of floundering. Despite this effort, the S&P 500 still remains a few points lower than it started the month.

Solid earnings by American Express stabilized the financial sector for the time being with the major banks gaining for a change as the financial sector ETF XLF added +1.69% after being on a downward slide for 6 weeks as I commented on yesterday.

SmallCaps outperformed by adding +1.06% compared to +0.77% for LargeCaps and +0.79% for MidCaps. Looking at the bigger picture, the Dow is the laggard by being stuck below its 50-day M/A while the S&P 500 is hugging it and Nasdaq hovers clearly above it showing the most upward momentum. You would think that with the Nasdaq touching new all-time highs, all is well in that sector, including earnings. But you would be wrong.

Take a look at this chart:

Chart courtesy of ZH

As you can see, we’re still in “hopium” territory with fundamentals being totally disconnected from Earnings/share thanks to the power of market manipulation. While this can go on a while longer, there will be a day of reckoning approaching at some point.

  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) recovered from recent weakness and headed north.

Here’s how we closed 4/20/2017:

Domestic TTI: +2.63% (last close +2.32%)—Buy signal effective 4/4/2016

International TTI: +4.94% (last close +4.33%)—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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