Dow Sets A New Record

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

While the Dow managed to eke out a new record high, the S&P 500 and Nasdaq struggled all day to get back to even with the latter just coming up short. We traded lower for most of the session as a result up Trump’s unveiling of the much-hyped tax plan. Some of the most sweeping overhauls in decades were expected, but traders were less than impressed, which assisted the markets to recoup their early losses.

Actually, many interpreted the bill as having “little chance of passing,” which helped alleviate fears of a negative effect on equities, and the slow climb towards the unchanged line resumed. Hoping for status quo was the meme of the day, and bonds benefited as yields dropped allowing the 20-year bond (TLT) to rally and gain +0.44%.

Our ETF holdings fared very well with far more winners than losers. Taking top billing was Aerospace & Defense (ITA) with a chest pounding rebound of +1.76%. Financials (XLF) placed 2nd with a nice showing of +0.94% and even Semiconductors (SMH) produced +0.47% in the face of a weak Nasdaq. On the downside, the losses were tiny with International SmallCaps (SCHC) and Transportations (IYT) surrendering -0.16% and -0.05% respectively.

The US Dollar (UUP) was whipsawed all day in a fairly broad range but ended the session unchanged. ZH summed it up best: “The bottom line from the reaction by markets seems to be traders are not expecting this bill to pass at all… and bonds are signaling the recent reflation exuberance is now fading fast.”

  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 again with only the International one advancing.

Here’s how we closed 11/2/2017:

Domestic TTI: +3.22% (last close +3.22%)—Buy signal effective 4/4/2016

International TTI: +6.82% (last close +6.68%)—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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