Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 12/07/2017

ETF Data updated through Thursday, December 7, 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 +3.39% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Snapping The Losing Streak; Tech Sector Finally Rebounds

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The major indexes managed to recover in sync for a change with the S&P 500 snapping its 4-day losing streak. Wall Street was continuing to focus on the progress of the tax legislation while looking with much anticipation towards Friday’s jobs report. Apparently, the possibility of a government shutdown did not affect markets, as discussions to keep things running were/are going on in full force.

Today’s favorite color in ETF space was “green” for a change with only the Dividend ETF (SCHD) ending down with a modest -0.06%. Leading to the upside were Transportations (IYT) with +1.35% followed by Semiconductors (SMH +0.98%) and US SmallCaps (SCHA +0.80%).

Interest rates moved higher with the yield on the 10-year bond adding 4 basis points to close at 2.37%. Suffering from that increase was the 20-year bond (TLT), the price of which slipped -0.78%; its first losing session after 4 days of gains. Crude oil rose but gold got clobbered again and dropped below the $1,250 level. The US dollar (UUP) liked the rise in rates and rallied for the 4th straight day by adding +0.21% and conquering its 50-day M/A.

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Nasdaq Pumps And Energy Dumps

[Chart courtesy of MarketWatch.com] 

  1. Moving the markets

It was a tug-of-war between bulls and bears with the major indexes vacillating back and forth above and below their respective unchanged lines. In the end, only the Nasdaq managed to show a green number, although the S&P scored a close second. The Energy sector as a whole looked frail with XLE losing -1.30%, but Crude Oil was the real weakling of the day and got spanked at the tune of -2.86%.

In ETF space, we again had more losers than winners. On the upside, we saw Aerospace & Defense (ITA) logging in a gain of +0.85% while Semiconductors (SMH) finally ended up in the green by adding a modest +0.23%. Giving back some of its YTD gains were Emerging Markets (SCHE) with -1.17% and International SmallCaps (SCHC) with -0.72%.

Interest rates dropped slightly after their recent push higher with the 10-Year bond yield losing 3 basis points to close at 2.33%. That allowed the 20-year bond (TLT) to rally +0.35% to close above its recent high at a level last seen in September. Gold stayed just about even, but the US Dollar (UUP) rallied for the 3rd straight day by adding +0.25% to kiss its 50-day M/A.

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A Great Start And A Lousy Ending

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The Nasdaq powered ahead early in the session as the Dow and S&P 500 struggled to find some traction. However, the euphoria was short lived as mid-day selling pulled all three indexes lower and below the unchanged line.

Tranportations (IYT), who had put up some strong numbers in recent days, under-performed and lost -1.40%. Most ETFs ended up with red numbers as SmallCaps (SCHA) and Aerospace and Defense (ITA) gave back -0.96% and -0.80% respectively. The winner of the day ended up being Semiconductors (SMH), which remained unchanged. That’s was as good as it got.

Treasury yields were lower allowing the 20-year bond (TLT) to rally +0.50%, while the high yield complex (HYG) slightly dropped and stayed just below its 50-day M/A. The Dollar index (UUP) rallied today +0.16% but is stuck in a tight range for the past 5 trading days. Precious metals were slammed again with gold not only closing below its 200-day M/A but also touching lows last seen 4 months ago.

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Exuberance Fades As Tech Wreck Continues

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

Overnight exuberance, caused in part by the discovery that Friday’s story from ABC about former national-security advisor Flynn was “fake news”, only had a temporary market moving effect. But clearly helping the bullish cause was the weekend passage of the Senate version’s overhaul of the tax code.

Spoiling the party was the continuation of the tech wreck, which pulled the Nasdaq down by another -1.05%. Only the Dow managed to buck the trend by closing slightly in the green after having been up over 200 points early on.

In the end, we saw more losers than winners in ETF space, although the bottom line was just about even. Scoring nicely were Transporations (IYT +1.81%) and Financials (XLF +1.52%). On the downside, Semiconductors (SMH) continued their slide with -2.12% while International SmallCaps (SCHC) gave back -0.65%. Semiconductors are now getting close to triggering their trailing sell stops, and we will liquidate them once that event occurs. Remember, they have been our top performer YTD, and a sale will leave us with a nice profit.

Interest rates bobbed and weaved, but the yield on the 10-year bond remained unchanged. Gold dropped and Crude Oil lost, while the US dollar (UUP) was steady and added +0.33% for the day.

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One Man’s Opinion: Doug Casey On The New Fed Chair

Authored by Doug Casey via CaseyResearch.com,

Ahead of his confirmation hearing tomorrow, a few words are in order about the likely new Chairman of the Federal Reserve, Jerome Powell.

I don’t know the man personally. Not that it would make any difference; denizens of the swamp within the Beltway usually present well, and a brief meeting rarely allows you to penetrate someone’s social veneer. But I’m pretty confident that if we dined together it would be tense and unpleasant. We’d have no common ground, after the obligatory two minutes on the weather and the state of the roads.

He’s a lawyer, has been a Fed Governor for five years, and appears to be a “steady as she goes” so-called moderate Republican. He’s a lifelong Deep State player. But let’s not waste time psychoanalyzing this bureaucrat; he’s just a cog in the machine. And the machine, at this stage, has a life of its own.

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