[Chart courtesy of MarketWatch.com]

1. Moving the Markets

And the theme continued with the major indexes slowly but surely scoring another round of records, as the Dow closed within spitting distance of a new milestone marker, namely the 23,000 level. All of this came in anticipation that the upcoming earnings season won’t disappoint but to also confirm that the current lofty market levels are justified.

Comments from President Trump on tax cuts and healthcare issues after a meeting with Senate Majority leader McConnell did not affect markets, although the issues discussed are very critical for the continuation of bullish momentum.

Equity ETFs were a mixed bag today with a number of them ending unchanged. On the winning side of the column, we saw Semiconductors (SMH) with +0.54% and LargeCaps (SCHX) with +0.15%. Closing in the red were Transportations (IYT) and International SmallCaps (SCHC) with -0.78% and -0.30% respectively.

Interest rates rose today with the 10-year bond yield adding 2 basis points to 2.30%. Gold slumped and gave back its recently conquered $1,300 level, while crude oil gained +0.80%. The US dollar (UUP) jumped +0.25% in an effort to remain above its 50-day Moving Average, a level that was broken intra-day last Friday. The major trend remains bearish.

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By Simon Black

There was a time, centuries ago, that France was the dominant superpower in the world.

They had it all. Overseas colonies. An enormous military. Social welfare programs like public hospitals and beautiful monuments.

Most of it was financed by debt.

France, like most superpowers before (and after), felt entitled to overspend as much as they wanted.

And their debts started to grow. And grow.

By the eve of the French revolution in 1788, the national debt of France was so large that the government had to spend 50% of tax revenue just to pay interest to its lenders.

Yet despite being in such dire financial straits the French government was still unable to cut spending.

All of France’s generous social welfare programs, plus its expansive military, were all considered untouchable.

So the spending continued. In 1788, in fact, the French government overspent its tax revenue by 20%, increasing the debt even more.

Unsurprisingly revolution came the very next year.
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Below please find the latest High Volume ETFs Cutline report, which shows how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs are positioned.

This report covers the HV ETF Master List from Thursday’s StatSheet and includes 366 High Volume ETFs ETFs, defined as those with an average daily volume of more than $5 million, of which currently 283 (last week 286) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line (%M/A) from those that have dropped below it.

Take a look:

The HV ETF Master Cutline Report            

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

If you missed the original post about the Cutline approach, you can read it here.

ETF Tracker StatSheet

http://www.theetfbully.com/2017/10/weekly-statsheet-etf-tracker-newsletter-updated-10122017/

ENDING THE DAY AND THE WEEK WITH A GAIN

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The trading range for the major indexes turned out to be a narrow one not just for the day but for the week as well. Nevertheless, we closed slightly up with the Nasdaq logging its 57^th all-time high. While weekly gains were modest, they stretched across all asset classes including stocks, bonds (Treasuries and Corporate), gold and crude oil.

In ETF space, we saw more winners than losers. Leading the charge to the upside today were Emerging Markets (SCHE) with +0.94% followed by Semiconductors (SMH) with +0.68% and International SmallCaps (SCHC) with +0.55%. On the downside, Transportations (IYT) gave back -1.04% of their recent gains as did Aerospace & Defense (ITA), which slid -0.45%.

Interest rates continued their slide with the 10-year yield slipping 5 basis points to end the day at 2.28%. That helped the 20-year bond (TLT) price to jump +0.72%. After several attempts, gold finally succeeded in conquering its $1,300 milestone again by gaining +0.74%. The US dollar traded in a tight range and remained unchanged for the session but fell for the week.

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ETF Data updated through Thursday, October 12, 2017

Methodology/Use of this StatSheet:

1. From the universe of over 1,800 ETFs, I have selected only those with a trading volume of over $5 million per day (HV ETFs), so that liquidity and a small bid/ask spread are assured.
2. Trend Tracking Indexes (TTIs)

Buy or Sell decisions for Domestic and International ETFs (section 1 and 2), are made based on the respective TTI and its position either above or below its long-term M/A (Moving Average). A crossing of the trend line from below accompanied by some staying power above constitutes a “Buy” signal. Conversely, a clear break below the line constitutes a “Sell” signal. Additionally, I use a 7.5% trailing stop loss on all positions in these categories to control downside risk.

3. All other investment arenas do not have a TTI and should be traded based on the position of the individual ETF relative to its own respective trend line (%M/A). That’s why those signals are referred to as a “Selective Buy.” In other words, if an ETF crosses its own trendline to the upside, a “Buy” signal is generated. Since these areas tend to be more volatile, I recommend a wider trailing sell stop of 7.5% -10% depending on your risk tolerance.

If you are unfamiliar with some of the terminology, please see Glossary of Terms and new subscriber information in section 9.

1. DOMESTIC EQUITY ETFs: BUY — since 4/4/2016

Click on chart to enlarge

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) is positioned above its long-term trend line (red) by +3.17% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The major indexes, as well as equities in general, struggled through the session looking for some footing to use as a launching pad for the usual mid-day rebound. It worked for a while, as the unchanged line was conquered but upward momentum faded, and we closed in the red, although only fractionally. Earnings season got underway with the first batch of the banking sector reporting. Things were mixed so far, and the Financial sector ETF (XLF) dipped -0.76%.

The Transportation ETF (IYT) moved solidly higher with a gain of +0.67%. Second place went to the Dividend ETF (SCHD) with +0.13% followed by MidCaps (SCHM) with a meager +0.08%. The downside came into play today, but the losses were tiny. Semiconductors (SMH) gave back -0.21% while LargeCaps (SCHX) surrendered -0.15%. All in all, it appeared to be a market in waiting looking for a reason to bounce higher.

Treasury yields retreated again with the 10-year giving back 2 basis points. This helped the 20-year bond (TLT), which rallied +0.43%, to make up for some recent weakness. Gold attempted again to recapture its $1,300 level but fell short. Not falling short was the US Dollar (UUP), which bounced off its recent low in a successful attempt to stay above its 50-day M/A.

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