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ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
18 September 2017
     

Market Overview

 

Equity funds are once again reasserting their uptrends, pushing into new high territory, plotted is the S&P 500 (SPY) overlay.

The short-term-composite is also rising yet remains a safe distance away from a worrisome level. Pull-backs over recent months occurred when the reading hit 68%, although the market can rise with a more overbought condition, such as the 80%+ reading in February of this year. 

This week we again highlight upside reassertions to consider. Note the presence of oil related funds, they continue to improve. 

 

 

 


 

This Week's Trades

  • None

Note - Trades will be executed on today's close.

 


 

Other ETF Highlights

 

  • Russell 2000 (IWM) - Buy reiterated
  • Utilities (XLU) - Sell reiterated
  • Global Energy Index (IXC) - Buy
  • Aerospace & Defence (PPA) - Buy
  • Hong Kong (EWH) - Buy
  • Brazil (EWZ) - Buy
  • British Pound Sterling Trust (FXB) - Buy
  • United States Oil Fund (USO) - Buy reiterated
  • Emerging Markets Bond (EMB) - Buy

 


 

Analysis

 

US Equity Indices

 

The Russell 2000 fund is reasserting its uptrend following the August pull-back into the 200-day exponential moving average. The 14-day RSI still has room to allow the extension to record highs. $135 could be used as a stop for new longs.

 

 

US Sector Indices

 

We hold our short position in the Utilities fund. Although the price made a new all-time high the past week, the relative ratio remains weak, rolling over at the end of August. The P&F relative chart has been trending down since 2008.

 

 

The Global Energy Index is pulling out of a 3 month double-bottom. With the 14-day RSI being overbought, entry is ideally sought on the next bout of weakness.  

The P&F chart is just over $1 away from reversing back up and achieving such would put the 3 year downtrend under pressure.

 

 

The Aerospace & Defence ETF is reasserting its long-term uptrend, supported by the rising 50-day exponential moving average over recent months. Momentum is not overstretched and should allow record highs over the near-term. 

 

 

 

Other Developed Indices

 

The Hong Kong fund has this month advanced to a new all-time high. The up trend has been steady throughout 2017 and momentum is at a comfortable level. A stop could be placed just under the 50-day exponential moving average. 

 

 

 

 

Emerging Indices

 

The Brazil ETF has been on a tear the past couple of months, sharply reasserting its 2016/2017 rally. The prior 5 year bear-market is over. The past 18 months has also seen outperformance relative to the U.S. equity market. Buy on weakness. 

 

 

Currencies

 

We showed the British Pound Sterling Trust last week as a buy and strength continues. The price has just gapped to new 52-week highs. Momentum, the 14-day RSI, is overbought and therefore entry is best sought on a retreat. The P&F chart shows the next upside level to target is $140.

 

 

Commodities

 

The United States Oil Fund is challenging resistance from its 200-day exponential moving average. With the trend being up since June and momentum at a comfortable level, the upside break is expected. 

The P&F chart is close to reversing back to the upside for the first time since January. 

 

 

Bonds

 

The Emerging Markets Bond, like the equity market funds, has been trending higher since November 2016. Expecting new 52-week highs over the next month or so. Momentum is comfortably positioned.

 

 

MODEL PORTFOLIO

ETF Trading (Long/Short) Longs

Date Stock Code Type Open Price Current Price % P&L
12 Jul 2016 ISHS Russell 2000 Index IWM Long 119.72 142.41 +18.95%
12 Jul 2016 iShares Dow Jones US Aerospace & Defense Index Fund ITA Long 127.66 171.03 +33.97%
12 Jul 2016 Semiconductor HOLDRS SMH Long 59.36 91.09 +53.45%
19 Jul 2016 PowerShares QQQ QQQ Long 112.13 146.06 +30.26%
19 Jul 2016 SPDR Sector Trst Materials XLB Long 48.81 56.07 +14.87%
19 Jul 2016 SPDR Sector Trst Technology XLK Long 45.21 58.74 +29.93%
19 Jul 2016 Base Metals DBB Long 13.79 17.81 +29.15%
2 Aug 2016 iShares GS Semiconductor Index SOXX Long 102.48 155.64 +51.87%
30 Aug 2016 iShares DJ US Broker-Dealers Index Fund IAI Long 41.8277 54.1 +29.34%
6 Sep 2016 iShares GS Software Index Fund IGV Long 113.91 146.94 +29.00%
6 Sep 2016 iShares Japan Index EWJ Long 50.12 55.24 +10.22%
13 Sep 2016 DJ US Regional Banks Index Fund IAT Long 35.24 44.33 +25.79%
8 Nov 2016 iShares DJ Transportation Average IYT Long 149.74 168 +12.19%
8 Nov 2016 streetTRACKS KBW Bank ETF KBE Long 34.94 41.91 +19.95%
22 Nov 2016 SPDR Sector Trst Industrial XLI Long 61.91 69.39 +12.08%
29 Nov 2016 Diamond Trust- 1/100 DJIA DIA Long 191.19 222.45 +16.35%
6 Dec 2016 iShares Switzerland Index EWL Long 28.85 34.8 +20.62%
10 Jan 2017 SPDR Sector Trst Health Care XLV Long 71.5 82.59 +15.51%
28 Feb 2017 DJ US Pharmaceuticals Index Fund IHE Long 153.26 156.8 +2.31%
7 Mar 2017 SPDR Sector Trst Energy XLE Long 71.51 65.84 -7.93%
21 Mar 2017 iShares MSCI South Africa Index Fund EZA Long 59.73 60.67 +1.57%
9 May 2017 United States Oil Fund USO Long 9.57 10.2 +6.58%
7 Aug 2017 PowerShares DB US Dollar Index Bullish UUP Long 24.22 23.84 -1.57%
5 Sep 2017 iShares Nasdaq Biotechnology IBB Long 333.04 331.82 -0.37%

ETF Trading (Long/Short) Shorts

Date Stock Code Type Open Price Current Price % P&L
4 Oct 2016 SPDR Sector Trst Utilities XLU Short 47.29 54.75 -15.78%
14 Feb 2017 Livestock COW Short 22.16 22.37 -0.95%
10 Jul 2017 iShares Barclays US Treasury Inflation Protected Securities Fund TIP Short 112.41 114.5 -1.86%
Model Portfolio Notes
Opening of positions – Positions are opened on the immediate closing price following the report.
 
Stops - Two flash crashes (2010, 2015) and occasional bad prices have forced us to drop strict stops. Positons will no longer be stopped out but we shall suggest a region as to where we MAY exit. 
 
Closures - With positions not being stopped out, we shall only exit positions via advice in the report. When we exit a trade, the next closing price is used. 
 
Allocation – Each trade is allocated 5% of the portfolio.
 
 
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