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ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
3 June 2015
     

Market Overview

The NYSE % 30-week moving average, which is the percentage of NYSE stocks trading above their 30-week moving average, is turning up. The indicator is recovering from the lower end of a seven month trend channel. The move suggests internals should expand from here as the indicator works its way up from support. That action is bullish and implies strength in the equity markets over the next few weeks. We remain overweight equity funds.

Today we buy the Euro fund as it firms. Strength in the currency will also lift European ETFs as they are priced in dollars, hence we shall also buy the Italy Index fund.

 

 

 


 

This Week's Trades

  • Software Index Fund (IGV) - buying, stoploss at $98
  • Cleantech (PZD) - buying, stoploss at $31
  • Euro Trust (FXE) - buying, stoploss at $107
  • Italy Index (EWI) - buying, stoploss at $14.80

 

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

 


 

Other ETF Highlights

 

US Equity Indices

  • NASDAQ 100 (QQQ) - buy

US Sector Indices

  • Oil Service (OIH) - buy reiterated

Other Developed Indices

  • see trades

Emerging Indices

  • Mexico Index (EWW) - sell

Currencies

  • British Pound Sterling Trust (FXB) - buy

Commodities

  • Commodity (DBC) - buy

Bonds

  • US Investment Grade (LQD) - sell

 


 

Analysis

 

US Equity Indices

 

The NASDAQ 100 (QQQ) fund is consolidating at long-term price highs. Just beneath the consolidation is potential support from the 50-day and 100-day exponential moving averages.

Momentum is at a favorable level to allow an imminent push to new highs.

Outperformance, underway since the start of the year, should soon resume.

 

 

 

US Sector Indices

 

The Software Index Fund (IGV) maintains steady price and relative uptrends. Both are poised to break out to new highs.

We shall buy the IGV on the close today. The stoploss will be at $98.

 

 

The Pharmaceuticals Index (IHE) maintains its long-term price and relative uptrends. Momentum is not overbought.

We shall raise the stoploss on our long position to $171.50, locking in gains.

 

 

The Health Care (XLV) fund is consolidating at historic price and relative highs. The 14-day RSI shows a non-overbought condition, so we would expect an upside reassertion soon.

We are already long and shall trail our stoploss higher to $73.

 

 

The Oil Service (OIH) fund looks to have found support from its 50-day exponential moving average. The price and relative uptrends off the March lows are attempting to resume. Favorable momentum.

We reiterate our buy advice; we are already long.

 

 

The Cleantech (PZD) is resuming its uptrends following a recent test of support from its 50-day exponential moving average. The 14-day RSI is turning up from neutral.

Favorable risk-to-reward ratio placing a stoploss just beneath the $31 level.

 

 

 

Other Developed Indices

 

The Italy Index (EWI) is trending higher, underway since the bottom at the start of 2015. The move is healthy with pull-backs to trend along the way, consequently the 14-day RSI is comfortably at neutral.

2015 outperformance should continue and we shall buy the fund this afternoon. The stoploss will be placed at $14.80.

 

 

Emerging Indices

 

The Mexico Index (EWW) has underperformed the U.S. market since the start of 2015. The price has gone sideways over that time, trapped beneath resistance from the 200-day exponential moving average. Longs should be avoided.

 

 

 

Currencies

 

Since March the Euro Trust (FXE) has formed a series of higher lows, establishing a possible new uptrend.

The MACD is down to neutral and curling up. Momentum has a long way to go before hitting overbought.

We like the follow-through today following yesterday's 2% pop. A long will be entered on the close. The stoploss will be at $107.

 

 

 

The British Pound Sterling Trust (FXB) is attempting to build a rising channel off its lows in early April. The 14-day RSI is certainly well positioned to allow that as it turns up from neutral.

Clearing $155 will activate a bottom, projecting a move towards $165.

 

 

Commodities

 

A large bottom is taking shape on the Commodity (DBC) fund chart as it starts the right shoulder of an inverse head-and-shoulders. The base will confirm on a break of the early May high at $18.68.

 

 

 

Bonds

 

The US Investment Grade (LQD) fund is making new 52-week price lows today. The chart shows a multi-month top confirming. The 14-day RSI has rolled over and has further to fall before hitting oversold.

We would be sellers on any strength given the weak relative ratio versus the equity market.

 

MODEL PORTFOLIO

ETF Trading (Long/Short) Longs

Date Stock Code Type Open Price Current Price % P&L Stop
19 Nov 2014 DJ US Pharmaceuticals Index Fund IHE Long 147.52 176.81 +19.85% 171.50
3 Dec 2014 SPDR Sector Trst Utilities XLU Long 46.27 43.97 -4.97% 43
10 Feb 2015 SPDR Sector Trst Health Care XLV Long 70.12 74.75 +6.60% 73
18 Mar 2015 Gold GLD Long 112.37 114.46 +1.86% 109
24 Mar 2015 SPDR Consumer Staples XLP Long 48.74 48.66 -0.16% 47.75
24 Mar 2015 iShares South Korea Index EWY Long 58.08 57.07 -1.74% 56
24 Mar 2015 CurrencyShares Swiss Franc Trust FXF Long 101.73 104.19 +2.42% 97
1 Apr 2015 SPDR Sector Trst Energy XLE Long 77.56 78.73 +1.51% 72.50
8 Apr 2015 PowerShares QQQ QQQ Long 106.64 110.07 +3.22% 103.50
8 Apr 2015 iShares Australia Index EWA Long 23.56 22.46 -4.67% 22.10
15 Apr 2015 Oil Service HOLDRS OIH Long 38.48 37.42 -2.75% 35
15 Apr 2015 iShares S&P Europe 350 Index IEV Long 45.95 46.23 +0.61% 43.75
15 Apr 2015 iShares Canada Index EWC Long 29.03 27.98 -3.62% 27.25
15 Apr 2015 United States Oil Fund USO Long 19.71 20.68 +4.92% 17.50
29 Apr 2015 iShares DJ US Health Care Providers Fund IHF Long 130.785 137.44 +5.09% 123
6 May 2015 SPDR S&P 500 Trust SPY Long 208.04 211.36 +1.60% 204.50
6 May 2015 iShares MSCI Pacific ex-Japan EPP Long 46.74 45.81 -1.99% 45
13 May 2015 Market Vectors-Gold Miners GDX Long 20.78 19.78 -4.81% 18
20 May 2015 iShares Taiwan Index EWT Long 16.5 16.18 -1.94% 15.25
27 May 2015 ISHS Russell 2000 Index IWM Long 124.75 124.52 -0.18% 122

ETF Trading (Long/Short) Shorts

Date Stock Code Type Open Price Current Price % P&L Stop
2 Jul 2014 Agriculture ETF DBA Short 27.47 22.32 +18.75% 28.50
11 Nov 2014 CurrencyShares Japanese Yen Trust FXY Short 84.29 78.26 +7.15% 90
Model Portfolio Rules
Allocation – The maximum number of trades is limited to 20 (including longs and shorts).
 
Opening of positions – Positions are opened at the immediate close following the report, using the closing price.  
 

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.

 
Note - When positions are stopped/closed out they will not appear as closures immediately but we plan to update the portfolio table with in 24 hours.
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