ETFs On The Cutline – Updated Through 08/11/2017

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 256 (last week 281) 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.

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ETF Tracker Newsletter For August 11, 2017

ETF Tracker StatSheet

http://www.theetfbully.com/2017/08/weekly-statsheet-etf-tracker-newsletter-updated-08102017/

BOUNCING OFF THE BOTTOM

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

We saw a little bit of a recovery, after yesterday’s shakeout caused by N. Korea jitters, with the major indexes clawing back to close above the unchanged line. The gains were tiny but at least the Nasdaq had a solid showing with +0.64%; Semiconductors did even better by adding +0.92%.

For the week, the S&P 500 surrendered -1.45%, which is not exactly earth shattering, or even noteworthy, given the magnitude of the post-election rally. Again, ZH posted a nice summary of the ups and downs of this most recent roller coaster ride:

  1. Dow’s worst week in 5 months (Mar ’17)
  2. S&P’s worst week since pre-election (Nov ’16)
  3. Russell 2000 worst week since Feb ’16
  4. Financials worst week in 5 months
  5. VIX biggest percentage spike since Aug ’15 (China Deval)
  6. HY Credit Risk biggest jump since election (Nov ’16)
  7. Silver’s biggest week since Jul ’16
  8. Gold’s biggest week since Apr ’16
  9. Offshore Yuan’s best week in 7 months (Jan ’17)

Today’s bounce was not exactly awe inspiring, so we’ll have to wait and see if and how the N. Korea events shape up over the weekend. Other assets that were affected negatively during the past 5 trading sessions were Energy, Financials and Retailers with the latter suffering the greatest losses.

The beneficiaries of this geopolitical uncertainty were bonds and gold. Bond yields dropped this week allowing the 20-year bond to rally although today it only added a meager +0.05%. Gold is now pushing against the $1,300 glass ceiling as it gained +2.32% for the week.

After its recent dead cat bounce, the US Dollar (UUP) took a nosedive and headed back towards its 15-month low losing another -0.37% on the day.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 08/10/2017

ETF Data updated through Thursday, August 10, 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.

  1. 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 +2.38% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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N. Korea: Simmering Tensions Punish Equities

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

The war drums with N. Korea were beating louder today as the high octane rhetoric was turned up a notch with a “preemptive strike” headline and similar dialogues pulling stocks down for the 3rd consecutive day. The session ended with the major indexes at their lows, which will make for an interesting opening tomorrow. If you find the news confusing, you might want to read a right-to-the-point article from the Ron Paul Institute here.

ZH summed the day up best:

  1. Nasdaq, Dow, S&P, Small Caps worst day in 3 months (to one month lows)
  2. S&P Tech Sector worst day in 2 months
  3. Financials worst day in 3 months
  4. HYG (HY Bond) worst 3-day move in 5 months (to lowest since March)
  5. VIX biggest 3-day spike since Aug 2015 China devaluation
  6. Gold’s best 3-day rally in 3 months
  7. Yuan biggest 3-day gain in 2 months

Of course, should this war mongering talk end up being a nothing burger, we could see a gigantic rally back towards record territory, but it’s too early to tell. For the time being, volatility shot up with the S&P VIX banging through its 200 day M/A and closing at 16, which is quite a jump from its recent low of around 8 and is its highest price since the election.

To no surprise, gold had another good day and surged to a 2-month high. This level of uncertainly had Wall Street traders move into bonds causing interest rates to drop thereby allowing the 20-year bond TLT to rally +0.85%. The US Dollar (UUP) held up fairly well and gave back only a modest -0.17%. Please see section 3 below as to the affect on our Trend Tracking Indexes (TTIs).

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Dow Slips For 2nd Straight Day

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

Yesterday’s slippage continued early this morning, but dip buyers stepped in encouraged by a NT Times story alleging that Trump’s ‘Fire and Fury’ words were his own and not US policy. During the last hour, the whipping boy of the year, AKA the VIX, was spanked again and while helping the indexes recover, they fell short of the intended goal, namely to cross back above the unchanged line.

With geopolitical uncertainty in full swing, it was no surprise to see gold rally solidly by adding +1.53%. In regards to equity ETFs, we saw mainly red numbers with SmallCaps (SCHA) surrendering -0.75%, closely followed by MidCaps (SCHM) with -0.53%. Even the Emerging Markets (SCHE) were unable to mount a rally and gave back -0.82%. Eking out a tiny gain were Dividend ETFs (SCHD) with +0.04%; Transportations (IYT) closed unchanged.

While FANG stocks continued their journey south, Apple scored a new record high and gained +0.61%. The VIX headed north again and broke above the 12 level, and above its 200-day M/A, which is quite a change from its recent all-time low just below 9. If this trend is sustained, equities will eventually be negatively affected. Bonds were the beneficiary of this uncertainty as yields dropped and the 30-year bond rallied to add +0.55%. The US dollar (UUP) was fairly docile, traded sideways and closed down -0.08%.

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Trump’s ‘Fire And Fury’ Speech Takes Starch Out Of Upward Momentum

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

The major indexes did their customary morning dip and then started to recover to cross solidly above their respective unchanged lines. Hedge fund heavyweight Jeff Gundlach’s market warnings were offset somewhat by the usual VIX beating to keep the Dow winning streak alive. However, Trump’s “Fire and Fury” speech directed towards North Korea took the starch out of upward momentum and south we went, as the chart above shows.

Winning big time, prior to Trump’s speech, were the Seminconductors (SMH) with +2.75%, a gain that disappeared in a hurry and turned into a -0.30% loss, pretty much in line with the percentages the broader indexes gave back. Volatility showed signs of life with the VIX storming out of the basement to close above 11. That caused the FANG stocks to take a dive, and they gave back yesterday’s gains.

Gold was able to buck the trend by closing in the green, as did the Emerging Markets (SCHE) with +0.19%. Interest rates rose with the 10-year yield adding 3 basis points to close at 2.29%. Yes, with rising geopolitical tensions, you might have expected rates to fall, but they didn’t. The US Dollar (UUP) bounced around, traded in a wide range and settled +0.17% higher.

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