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

Market Overview


The big technical event this week was the count of bullish advisors in our Advisors Sentiment Survey falling to its lowest level since 2009. That figure reflects a real lack of optimism in the market and suggests now is a low risk buying opportunity in the domestic equity ETFs. Today we add longs in the biotech and technology sector ETFs. 





This Week's Trades

  • Biotechnology (IBB) - buying
  • Technology (XLK) - buying

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



Other ETF Highlights


  • S&P 500 (SPY) - buy
  • Materials (XLB) - relative buy
  • Japan Index (EWJ) - buy
  • Oil fund (USO) - buy reiterated
  • British Pound Sterling (FXB) - watch
  • China A Share Fund (CAF) - sell
  • 20+ years (TLT) - watch





US Equity Indices


The S&P 500 (SPY) looks to have found support from its 500-day exponential moving average, similar to retreats into the average in 2010 and then 2011. Moving back above $200 would confirm that the long-term uptrend reassertion was well underway. 




US Sector Indices


The Biotechnology (IBB) fund has found support from its 200-day exponential moving average and is likely reasserting. Note the MACD down to a deeply oversold level. 

We shall open a long in the IBB on the close today. We would look to exit should the price deteriorate beneath $320. 




The Materials (XLB) fund is being highlighted given the potential base developing on its relative ratio since late July. 

Should the price break the 20-day exponential moving average it would defeat the four month downtrend and that should enable the relative base to activate. 



The Technology (XLK) fund is well positioned for a strong uptrend reassertion from here. Support has been found just above the October 2014 low and also the 500-day exponential moving average.

The relative ratio shows a sideways consolidation this year, now attempting to break higher. 

We shall open a long in the XLK on the close this afternoon. We would watch to exit should there be a violation of the October low. 



Other Developed Indices


The Japan Index (EWJ) is up today, approaching 1%. The price avoided breaching the $11 level with the recent rout and consequently maintains its three year up channel. Momentum is moving in the right direction.  Watch for a return to $13 over the next few weeks. 





Emerging Indices


Although higher by over 3% today the three month trend for the China A Share Fund (CAF) remains down. New 52-week price and relative lows likely later this month. 






The British Pound Sterling (FXB) ETF is struggling to clear its 200-day exponential moving average and as a result could be resuming the down move of 2014.  Shorts entered here could place a stop just above the 200-day at $153.






The Oil fund (USO) reversed an intraday sell-off yesterday and is today following through to the upside with a 4% gain. The rally since the August 24th low remains underway and with the 14-day RSI only at neutral, the potential is there for a test of $20 in a few week's time.





The 20+ years (TLT) fund is at a make or break point as its tests trendline support from July. Breaking that line would resume the 2015 downtrend. 



ETF Trading (Long/Short) Longs


Date Stock Code Type Open Price Current Price % P&L
24 Mar 2015 CurrencyShares Swiss Franc Trust FXF Long 101.73 99.93 -1.77%
29 Apr 2015 iShares DJ US Health Care Providers Fund IHF Long 130.785 130.92 +0.10%
3 Jun 2015 CurrencyShares Euro Trust FXE Long 110.77 110.15 -0.56%
29 Jul 2015 CurrencyShares British Pound Sterling Trust FXB Long 153 150 -1.96%
27 Aug 2015 PowerShares QQQ QQQ Long 105.64 103.9 -1.65%
27 Aug 2015 SPDR Consumer Discretionary XLY Long 75.53 74.62 -1.20%
27 Aug 2015 SPDR Sector Trst Energy XLE Long 64.29 64.68 +0.61%
27 Aug 2015 iShares Germany Index EWG Long 26.64 26.05 -2.21%
27 Aug 2015 United States Oil Fund USO Long 13.95 15.09 +8.17%

ETF Trading (Long/Short) Shorts

Date Stock Code Type Open Price Current Price % P&L
2 Jul 2014 Agriculture ETF DBA Short 27.47 20.62 +24.94%
11 Nov 2014 CurrencyShares Japanese Yen Trust FXY Short 84.29 80.66 +4.31%
8 Jul 2015 iShares FTSE/Xinhua China 25 Index Fund FXI Short 38.95 34.67 +10.99%
29 Jul 2015 Emerging Markets Bond EMB Short 109.3 107.16 +1.96%
6 Aug 2015 US Investment Grade Crp LQD Short 115.47 115.25 +0.19%
19 Aug 2015 SPDR S&P Emerging Asia Paciific GMF Short 76.83 71.94 +6.36%
19 Aug 2015 CurrencyShares Australian Dollar Trust FXA Short 73.58 70.42 +4.29%
27 Aug 2015 CurrencyShares Japanese Yen Trust FXY Short 80.24 80.66 -0.52%
27 Aug 2015 iShares 7-10 yr T-Bond Fund IEF Short 106.52 106.38 +0.13%
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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