ETF Tracker Newsletter For July 5, 2019

ETF Tracker StatSheet          

You can view the latest version here.

GOOD NEWS IS BAD NEWS AGAIN—BOND YIELDS EXPLODE; EQUITIES TUMBLE AND RECOVER

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

As we’ve seen many times in the past, good economic news turned out to be bad news for equities, which took a steep dive at the opening after a better than expected jobs report. We learned that 224k new jobs were added, which was an easy beat of the 170k expected.

Wall Street viewed this as a negative development because it endangers, or at least puts in question, the widely anticipated rate cut by the Fed later this month. At session lows, the Dow had dropped some -0.8% with the other major indexes showing similar losses.

At the same time, bond yields, which had been on a downward trajectory, exploded higher with the 10-year at one point being up 11 basis points and solidly back above the 2% level. That is a huge move, as this chart demonstrates.

The ensuing rebound pulled yields back down a tad, but we still closed higher by over 9 basis points, while in the equity arena the losses were reduced sharply with only the safe- haven arena, namely gold, suffered a loss of over 1%.

ZH summed up the week as follows:

Trade-Truce ‘good’ news was good news for stocks, ‘bad’ news in macro data this week was good for stocks, and jobs ‘good’ news today was bad news for stocks (initially)…

Be that as it may, despite a Holiday shortened week, the major indexes closed higher with the S&P 500 adding +1.7%. Of course, it all happened on low volume, so we’ll have to wait till Monday, when the big boys return, and we’ll find out if there is more fallout from today’s jobs report waiting in the wings.

2. 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 regarding 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.

For this current domestic “Buy” cycle, here’s how some our candidates have fared:

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 -8% point has been taken out in the “Off High” column. For more volatile sector ETFs, the trigger point is -10%.

3. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) were mixed with the Domestic one showing more upward momentum.

Here’s how we closed 07/03/2019:

Domestic TTI: +8.08% above its M/A (last close +7.39%)—Buy signal effective 02/13/2019

International TTI: +5.03% above its M/A (last close +5.02%)—Buy signal effective 06/19/2019

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 specified guidelines.

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