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ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
2 November 2016
     

Market Overview

Market volatility associated with the upcoming election has pushed our Short-term-composite down into single digits. Previous visits to these lows have been short-lived and therefore it would be no surprise to see the equity funds soon bounce back. Therefore we stick with the longer-term uptrends and leave the portfolio mostly unchanged this week. We shall though close the long in the Telecom Services ETF as that sector continues to underperform.

 

 

 


 

This Week's Trades

  • Telecom (IYZ) - closing long

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

 


 

Other ETF Highlights

 

  • S&P 500 (SPY) - hold
  • Dow Jones Industrials (DIA) - hold
  • Health Care (XLV) - sell
  • Hong Kong (EWH) - buy reiterated
  • BRIC (EEB) - buy 
  • Swiss Franc (FXF) - sell strength
  • Silver (SLV) - buy reiterated
  • Municipal Bond (MUB) - sell reiterated

 


 

Analysis

 

US Equity Indices

 

The S&P 500 ETF tested its 200-day exponential moving average with yesterday's rout. The fund ended the session above the average and a rally from here would confirm a successful test of the average. We watch developments.

 

The Dow Jones ETF also tested its 200-day exponential moving average yesterday as well as support across 180. Watching now for a potential bounce off those two levels. The correction off the August high may be complete.

 

 

US Sector Indices

 

The Telecom fund reversed down with yesterday's weakness, suggesting a major failure at resistance from the July 2004 high. Further weakness looks likely and we shall therefore close out our long in the fund on the bell today. 

 

The Health Care fund dropped to a new 6 month low yesterday, extending the deterioration off the August high. The decline is heading towards the bottom of its year long sideways range. 

The P&F relative chart is also in correction mode. We would continue to avoid longs here.

 

 

Other Developed Indices

 

The Hong Kong Index fund is testing support from its 50-day exponential moving average, maintaining its 2016 uptrend. Momentum has unwound with the sideways action of the past two months, readying the chart for the next upleg. 

 

 

 

Emerging Indices

 

The BRIC ETF, like many of the equity funds, also tested moving average support yesterday, in this case the 50-day exponential moving average. With the 14-day RSI down to neutral, the chart is well positioned to stage an upside reassertion from here. 

 

 

 

Currencies

 

The Swiss Franc Trust is rising off the bottom of its 6 month range between $96 and $101. However, a break above the range is not expected given that the general trend has been down since 2011. Therefore, we would be sellers into the strength.

 

 

 

Commodities

 

Silver rallied yesterday, pulling away from support off its 200-day exponential moving average. The MACD is turning up from an oversold condition, with plenty of slack to allow a return to the highs from August over the next few weeks.

 

 

Bonds

 

The Municipal Bond fund made a new 6 month low yesterday and yet momentum is not oversold. The 14-day RSI still has room to fall. The 50-day exponential moving average is nearing a cross-over of the 200-day exponential moving average to print a death-cross. Any strength should be used to sell.

 

MODEL PORTFOLIO

ETF Trading (Long/Short) Longs

Date Stock Code Type Open Price Current Price % P&L
26 Apr 2016 Sugar SGG Long 36.46 47.24 +29.57%
28 Jun 2016 Gold GLD Long 125.32 122.73 -2.07%
28 Jun 2016 Market Vectors-Gold Miners GDX Long 26.6 25.13 -5.53%
12 Jul 2016 ISHS Russell 2000 Index IWM Long 119.72 117.05 -2.23%
12 Jul 2016 iShares DJ US Telecom IYZ Long 34.42 30.71 -10.78%
12 Jul 2016 iShares Dow Jones US Aerospace & Defense Index Fund ITA Long 127.66 129.65 +1.56%
12 Jul 2016 Semiconductor HOLDRS SMH Long 59.36 67.64 +13.95%
12 Jul 2016 iShares Taiwan Index EWT Long 14.52 15.59 +7.37%
12 Jul 2016 iPath MSCI India Index ETN INP Long 67.95 68.16 +0.31%
19 Jul 2016 PowerShares QQQ QQQ Long 112.13 116.11 +3.55%
19 Jul 2016 SPDR Sector Trst Materials XLB Long 48.81 46.48 -4.77%
19 Jul 2016 SPDR Sector Trst Technology XLK Long 45.21 47.01 +3.98%
19 Jul 2016 iShares Hong Kong Index EWH Long 20.37 21.66 +6.33%
19 Jul 2016 Base Metals DBB Long 13.79 14.4 +4.42%
26 Jul 2016 SPDR Consumer Discretionary XLY Long 81.63 77.55 -5.00%
26 Jul 2016 iShares Brazil Index EWZ Long 32.57 36.47 +11.97%
2 Aug 2016 iShares GS Semiconductor Index SOXX Long 102.48 110.37 +7.70%
2 Aug 2016 iShares South Korea Index EWY Long 55.26 54.9 -0.65%
30 Aug 2016 iShares DJ US Broker-Dealers Index Fund IAI Long 41.8277 41.22 -1.45%
30 Aug 2016 iShares MSCI Emerging EEM Long 36.94 36.84 -0.27%
6 Sep 2016 SPDR Midcap Index Trust MDY Long 287.27 271.75 -5.40%
6 Sep 2016 iShares GS Software Index Fund IGV Long 113.91 111.82 -1.83%
6 Sep 2016 iShares Japan Index EWJ Long 12.53 12.58 +0.40%
6 Sep 2016 Silver SLV Long 19.05 17.41 -8.61%
13 Sep 2016 DJ US Regional Banks Index Fund IAT Long 35.24 36.61 +3.89%

ETF Trading (Long/Short) Shorts

Date Stock Code Type Open Price Current Price % P&L
12 Jul 2016 United States Oil Fund USO Short 11.19 10.57 +5.54%
12 Jul 2016 Livestock COW Short 22.3388 19.29 +13.65%
6 Sep 2016 iShares Barclays US Treasury Inflation Protected Securities Fund TIP Short 116.14 115.87 +0.23%
13 Sep 2016 iShares S&P National Municipal Bond Fund MUB Short 112.63 111.15 +1.31%
4 Oct 2016 SPDR Sector Trst Utilities XLU Short 47.29 48.53 -2.62%
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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