Edging Higher

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

It wasn’t much of a gain, but a gain nevertheless, as the major indexes ended their 2-day slide to close in the green by a small margin. Trading was subdued during this Holiday shortened week, as new catalysts were lacking, and I don’t expect much movement in equities over the last trading days of the year.

This behavior is actually quite bullish as, due to low volume and attendance on Wall Street, bears would have a relatively easy time to pull the markets off their lofty levels. The advances were small in ETF space as well with the International SmallCaps (SCHC) taking the lead with +0.55% followed by Semiconductors (SMH +0.33%) and  Aerospace & Defense (ITA +0.24%). Closing in the red was US SmallCaps (SCHA), which gave back a tiny -0.06%.

Interest rated dropped sharply with the 10-year bond yield surrendering 5 basis points to end the day at 2.42%. The beneficiary of that move was the 20-year bond (TLT), which shifted into rally mode, gapped higher and gained +1.30%. The US Dollar (UUP) traded in a tight range and lost -0.21%.

  1. 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 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) gained a tad as the predominant trend was sideways.

Here’s how we closed 12/27/2017:

Domestic TTI: +3.78% above its M/A (last close +3.73%)—Buy signal effective 4/4/2016

International TTI: +4.94% above its M/A (last close +4.75%)—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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