Day 2 Of Yellen’s Testimony: Dow Rides Into Record Territory

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

The recent trend of warnings from various Fed mouthpieces continued today with Lael Brainard commenting that “asset valuations do look a bit stretched,” another hint designed to take the starch out of upward momentum and to instill the thought that current market levels may not be sustainable.

It was a nice try, but after a brief morning sell-off, the bulls took over and pushed the major indexes back into the green with the Dow posting its 24th record of 2017. Even news that the revised healthcare bill may lack the necessary votes again, could not keep the trading algos from pushing the indexes higher.

The Nasdaq notched its 5th up-day in a row. Financials supported the rally with XLF gaining +0.60%. SmallCaps recovered from early weakness and emerging markets (SCHE) added +0.39%. A big assist came from the retail sector with XRT rising +2.31% ignoring its bearish trend in what looks like a dead cat bounce.

Interest rates rose and the 20-year T-Bond TLT gave back yesterday’s gains. The US dollar (UUP) whipsawed but ended the session +0.04% higher.

  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) were mixed as the major indexes moved in a tight range.

Here’s how we closed 7/13/2017:

Domestic TTI: +3.40% (last close +3.40%)—Buy signal effective 4/4/2016

International TTI: +8.28% (last close +8.08%)—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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