|ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
14 October 2015
Equity ETFs are attempting to rally from their recent lows and reassert their long-term uptrends. Our medium-term indicators remain at low comfortable levels and thereby support the case for a multi-week rally from here in developed world equity ETFs.
Plotted is the bulls divided by the bears in our Advisors Sentiment Survey. It is reversing up from an oversold condition as per the S&P 500 uptrend reassertion at the end of 2011.
We remain overweight U.S. equity funds. Today just one trade, a short in an emerging market currency.
This Week's Trades
- Brazilian Real Fund (BZF) - opening a short
Note - Trades will be executed on today's close.
Other ETF Highlights
- S&P 500 (SPY) - buy
- Technology (XLK) - buy reiterated
- Dynamic Retail (PMR) - buy
- Pacific ex-Japan (EPP) - buy
- Brazil Index (EWZ) - sell
- Silver (SLV) - sell
- Copper (JJC) - sell
- High Yield (HYG) - sell
- Emerging Markets Bond (EMB) - sell reiterated
US Equity Indices
The S&P 500 (SPY) fund is consolidating just to the underside of its 200-day exponential moving average and also the price spike high from September. Near-term $200 needs to hold to avoid a return to the trading range between $187 and $200. A break higher, above the September high, would confirm a base and project a move back to the record high.
The P&F chart shows that the long-term uptrend still stands.
US Sector Indices
The Technology (XLK) fund has clawed its way back above its 200-day exponential moving average and also broken the September high. The uptrend off the end of September low needs to soon resume to avoid returning to the sideways action of that month.
The Dynamic Retail (PMR) fund is also attempting to regain support from its 200-day exponential moving average and doing so would resume the primary uptrend. Momentum is not overbought and the relative ratio has been trending higher since June.
Other Developed Indices
The Pacific ex-Japan (EPP) P&F price chart has reversed up this month from the $35 level, support going back to 2011. Potential for a return towards the top of the four year range at $50 in the month's ahead.
A favorable risk-to-reward ratio for longs, placing a stoploss just under $35.
The Brazil Index (EWZ) fund has encountered resistance from its 50-day exponential moving average. Trading may be failing here to reassert the long-term downtrend. The MACD is also back to neutral, reflecting a complete oversold bounce.
With the relative ratio also turning back down, we would be sellers here.
The Brazilian Real Fund (BZF) is likely resuming its long-term downtrend following a test of its 50-day exponential moving average a few sessions ago. The 14-day RSI is turning down following the oversold rally.
A long-term underperformer versus the U.S. equity market, now presents a good entry point for fresh shorts.
We shall open a short on the close today. The trade aims for new 52-week lows. We would look to exit should there be a break up through $14.
Silver (SLV) has run into resistance from its 200-day exponential moving average with the rally off the late August low. Momentum is near to overbought, so the price should struggle to go higher from here.
If long, we would be sellers now. The P&F price chart reflects the long-term downtrend, underway since the start of 2011.
Copper (JJC) is struggling at its 50-day exponential moving average and may soon resume its long-term downtrend. The 14-day RSI is no longer oversold and that will allow fresh weakness. An underperformer since the end of 2010!
The High Yield (HYG) fund is another downside reassertion candidate as it fails at resistance from its 50-day exponential moving average.
The 14-day RSI is rolling over at neutral just as it has done with prior dead-cat bounces over the past five months.
The long-term relative ratio is weakening. Avoid.
The Emerging Markets Bond (EMB) is falling away from resistance off its 100-day exponential moving average. Until there is a decisive break above that average, we would favor the short side.
An underperformer over the past year.
ETF Trading (Long/Short) Longs
|Date||Stock||Code||Type||Open Price||Current Price||% P&L|
|29 Apr 2015||iShares DJ US Health Care Providers Fund||IHF||Long||130.785||127.14||-2.79%|
|29 Jul 2015||CurrencyShares British Pound Sterling Trust||FXB||Long||153||149.57||-2.24%|
|27 Aug 2015||PowerShares QQQ||QQQ||Long||105.64||106.1||+0.44%|
|27 Aug 2015||SPDR Consumer Discretionary||XLY||Long||75.53||77.67||+2.83%|
|27 Aug 2015||SPDR Sector Trst Energy||XLE||Long||64.29||67.34||+4.74%|
|27 Aug 2015||iShares Germany Index||EWG||Long||26.64||26||-2.40%|
|27 Aug 2015||United States Oil Fund||USO||Long||13.95||15.06||+7.96%|
|3 Sep 2015||iShares Nasdaq Biotechnology||IBB||Long||338.63||298.76||-11.77%|
|3 Sep 2015||SPDR Sector Trst Technology||XLK||Long||39.91||41.44||+3.83%|
|9 Sep 2015||iShares GS Software Index Fund||IGV||Long||94.96||99.34||+4.61%|
|23 Sep 2015||PowerShares DB US Dollar Index Bullish||UUP||Long||25.12||24.66||-1.83%|
|30 Sep 2015||SPDR Sector Trst Health Care||XLV||Long||66.23||67.76||+2.31%|
|8 Oct 2015||SPDR Sector Trst Materials||XLB||Long||44.17||43.6||-1.29%|
|8 Oct 2015||Oil Service HOLDRS||OIH||Long||30.75||30.75||0.00%|
|8 Oct 2015||iShares South Korea Index||EWY||Long||52.91||52.54||-0.70%|
ETF Trading (Long/Short) Shorts
|Date||Stock||Code||Type||Open Price||Current Price||% P&L|
|2 Jul 2014||Agriculture ETF||DBA||Short||27.47||21.51||+21.70%|
|11 Nov 2014||CurrencyShares Japanese Yen Trust||FXY||Short||84.29||80.97||+3.94%|
|29 Jul 2015||Emerging Markets Bond||EMB||Short||109.3||107.92||+1.26%|
|6 Aug 2015||US Investment Grade Crp||LQD||Short||115.47||116.54||-0.93%|
|19 Aug 2015||CurrencyShares Australian Dollar Trust||FXA||Short||73.58||72.66||+1.25%|
|27 Aug 2015||CurrencyShares Japanese Yen Trust||FXY||Short||80.24||80.97||-0.91%|
|27 Aug 2015||iShares 7-10 yr T-Bond Fund||IEF||Short||106.52||107.9||-1.30%|
|16 Sep 2015||iPATH S&P 500 VIX Short-Term Futures ETN||VXX||Short||22.09||21||+4.93%|
|16 Sep 2015||iShares S&P National Municipal Bond Fund||MUB||Short||108.19||109.45||-1.16%|
|23 Sep 2015||Market Vectors Agribusiness ETF||MOO||Short||46.43||47.73||-2.80%|
|30 Sep 2015||Gold||GLD||Short||106.86||111.86||-4.68%|
Copyright 2015 by Stockcube Research Ltd.