| The ETF Review 17 April 2013 |
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Market Overview
We last reviewed the CBOE Volatility Index (VIX) in the March 27th report. Then we felt that there was an absence of complacency despite the equity markets breaking to new highs. That view is unchanged. This week has seen the VIX surge to levels not seen for several weeks and yet the equity markets recently notched record highs. Markets are said to climb a wall of worry and that is clearly the situation now.
This week is seeing a consolidation in the rally and that is normal. The pause is seeing strength in the defensive ETFs and they are highlighted today. We also see continued weakness in gold related ETFs as well as some emerging markets, an area where we shall add some short positions.

This Week's Trades
- NASDAQ 100 (QQQ) - closing long
- Brazil (EWZ) - shorting, stoploss at $55
- Russia (RSX) - shorting, stoploss at $28.25
Note - Trades will be executed on today's close.
Other ETF Highlights
US Equity Indices
- S&P 500 (SPY) - hold
- Select Dividend Index (DVY) - relative buy
US Sector Indices
- Consumer Staples (XLP) - buy
- Healthcare (XLV) - buy
- Utilities (XLU) - buy
- Regional Banks (RKH) - sell
- Gold Miners (GDX) - sell
Other Developed Indices
- Japan (EWJ) - buy
- France (EWQ) - hold
Emerging Indices
- see trades
Currencies
- US Dollar Bullish (UUP) - buy
Commodities
- Gold (GLD) - sell
- Copper (JJC) - sell
Bonds
- 20+ year T-Bond (TLT) - watch to buy
Analysis
US Equity Indices
The S&P 500 (SPY) has corrected lower this week but the uptrend off the November low still stands. The 50-day exponential moving average is providing support to the trend and a successful test was made today. Momentum is favorable, with the 14-day RSI having corrected back to neutral.

The Select Dividend Index (DVY) is today reasserting its relative uptrend against the S&P 500.
Like the SPY, the price uptrend still stands.
Weakness is a buying opportunity providing there is no deterioration beneath $61 as that would violate the five month trend channel.

The NASDAQ 100 (QQQ) is reasserting its 2013 relative downtrend today, in part weighed down by a poor Apple (AAPL) performance.
Although the price trend is up, the fund is underperforming.
We shall exit our long at the close.

US Sector Indices
The Consumer Staples (XLP) fund is printing a new nine month relative high today versus the S&P 500.
Price action made a new all-time high yesterday.
Momentum is not overbought and longs are suggested in this outperformer.
The yield is 2.71%.

Healthcare (XLV) made a new all-time relative high today and conditions are not overbought.
Slight weakness on the price chart, as being experienced today, is likely a buying opportunity.
We reiterate our buy advice.

The P&F relative chart for the Utilities (XLU) reversed up this month. The chart is a slow mover so the turnaround is worth noting. The previous reversal from the same level resulted in outperformance extending for another five months.
Watch to buy on weakness.
Yield is 3.72%.

The Regional Banks (RKH) are developing a potential price top. A sustained break of $46 would confirm that pattern and this afternoon saw the fund come close to that level.
The ETF is also an underperformer and we would sell.

The Gold Miners (GDX) accelerated their price and relative downtrends this week.
The 2008 relative low has been broken and the 2008 price low remains the key target for the sell-off.

Other Developed Indices
Japan (EWJ) remains strong, outperforming during the present rout.
The price trend is still expected to test the high from 2011 at $11.63.
We reiterate our buy advice.

The France (EWQ) ETF sold off over 3.5% today, dragging trading down to the bottom of its 2013 range. That range may be a bullish consolidation of the rally off the July 2012 low.
If long, we would hold on and watch developments. A deterioration beneath $22 would certainly break the rally and cue an exit.

Emerging Indices
Brazil (EWZ) broke down to new twelve month relative lows against the U.S. market today. That is severe underperformance and we shall open a short at the close.
The stoploss will be at $55 and we are looking for a break of the November 2012 low, with a move down to $50.

The Russia (RSX) fund has clearly broken the price uptrend off the 2009 low. Trading is now confirming a price top, a pattern which could take the chart down to the $15 region.
The P&F relative chart is in a downtrend and looks set to visit the low from early 2009.
We shall open a short in RSX today. The stoploss will be at $28.25.


Currencies
The US Dollar Bullish (UUP) ETF surged over 1% today to reassert the uptrend off the February low. The rally has the potential to extend up to the top of the twelve month range at $23.14.
Ongoing strength will be a further headwind for the commodity and emerging market ETFs.

Commodities
The long-term uptrend in the Gold (GLD) ETF is clearly over. The breakdown over the past week has confirmed a top formation and that yields a target down to just beneath the $120 region.
Sell on any strength.

Copper (JJC) continues to weaken and extended its downtrend the past week. A top is close to activating and we would exit now if owned.

Bonds
The 20+ year T-Bond (TLT) fund is doing its best to defeat the downtrend off the July high. Ideally a break above the November 2012 high of $127.19 is needed to provide confirmation that the medium-term downtrend is over.
Patient investors are being rewarded with the yield of 2.72%.

| Date | Stock | Code | Type | Open Price | Current Price | % P&L | Stop |
| 18 Oct 2012 | iShares MSCI Pacific ex-Japan | EPP | Long | 45.98 | 49.51 | +7.68% | 43.50 |
| 6 Dec 2012 | Regional Bank HLDRS | RKH | Long | 44.17 | 47.57 | +7.70% | 41 |
| 18 Dec 2012 | Powershares DWA Technical Leaders Portfolio | PDP | Long | 28.31 | 30.99 | +9.47% | 26.5 |
| 18 Dec 2012 | iShares Germany Index | EWG | Long | 24.63 | 24.8 | +0.69% | 22 |
| 18 Dec 2012 | iShares Japan Index | EWJ | Long | 9.52 | 11.38 | +19.54% | 9 |
| 18 Dec 2012 | ISHS Russell Mid Cap Growth Index | IWP | Long | 63.68 | 69.45 | +9.06% | 58.5 |
| 10 Jan 2013 | iShares Switzerland Index | EWL | Long | 27.82 | 29.99 | +7.80% | 25.50 |
| 17 Jan 2013 | PowerShares QQQ | QQQ | Long | 67.22 | 69.47 | +3.35% | 65 |
| 17 Jan 2013 | iShares Australia Index | EWA | Long | 25.82 | 26.96 | +4.42% | 24.25 |
| 24 Jan 2013 | Diamond Trust- 1/100 DJIA | DIA | Long | 138.02 | 147.36 | +6.77% | 128 |
| 7 Feb 2013 | SPDR Consumer Discretionary | XLY | Long | 50.33 | 53.74 | +6.78% | 49 |
| 7 Feb 2013 | iShares GS Semiconductor Index | SOXX | Long | 56.94 | 58.54 | +2.81% | 54.50 |
| 21 Feb 2013 | SPDR Midcap Index Trust | MDY | Long | 199.02 | 205.5 | +3.26% | 193 |
| 28 Feb 2013 | ISHS Russell 2000 Index | IWM | Long | 90.48 | 91.67 | +1.32% | 87 |
| 28 Feb 2013 | iShares DJ Transportation Average | IYT | Long | 106.67 | 107.49 | +0.77% | 98 |
| 28 Feb 2013 | iShares Hong Kong Index | EWH | Long | 20.12 | 19.49 | -3.13% | 19.25 |
| 21 Mar 2013 | SPDR Sector Trst Health Care | XLV | Long | 44.59 | 47.74 | +7.06% | 42.50 |
| 27 Mar 2013 | iShares Biotechnology Index | IBB | Long | 157.77 | 167.94 | +6.45% | 149.50 |
| 27 Mar 2013 | iShares Mexico (free) Index | EWW | Long | 74.48 | 73.48 | -1.34% | 68 |
| Date | Stock | Code | Type | Open Price | Current Price | % P&L | Stop |
| 14 Mar 2013 | iShares MSCI South Africa Index Fund | EZA | Short | 64.7 | 61.93 | +4.28% | 69 |
| 14 Mar 2013 | iPath Sugar ETN | SGG | Short | 67.77 | 63.79 | +5.87% | 69.50 |
| 4 Apr 2013 | Market Vectors-Gold Miners | GDX | Short | 35.22 | 28.82 | +18.17% | 42 |
| 4 Apr 2013 | SPDR Sector Trst Materials | XLB | Short | 38.47 | 37.99 | +1.25% | 42.50 |
Closure of positions – The Analyst may close a position to take profits or exit early to prevent a loss if the outlook has changed. Positions will only be closed if there has been prior mention in the newsletter. The closing price will be at the next close following the report.
Stops – Stop levels are given for each model portfolio position.
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