|ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
21 June 2016
This week the most important ETF chart is that of the British Pound Sterling Trust. The result of the EU referendum by the British people will be known on Friday's open and British Pound volatility is inevitable, with pinball action across the ETF universe. Following the volatility the dust will settle, with normality likely returning towards the end of this month.
Since the start of this year the chart has been gyrating in and around the $140 level as it feels out the lows from 2009. A BREXIT should see a spike down through those lows.
The long-term trend is clearly down, so longs are best avoided, even if the vote was to go the way of a BREMAIN.
This Week's Trades
Other ETF Highlights
- Midcap Index Trust (MDY) - Buy
- DJ Select Dividend Index (DVY) - Buy
- Materials (XLB) - Buy
- Oil Service (OIH) - Buy
- Aerospace & Defense - (PPA) - Buy Reiterated
- United Kingdom Index (EWU) - Avoid
- India Index (INP) - Buy
- Euro Trust (FXE) - Avoid
- Commodity (DBC) - Buy
- 7-10 year T-Bond (IEF) - Sell
US Equity Indices
The Midcap Index Trust has strengthened this month on a price and relative basis. Long-term uptrends have reasserted, with new all-time price highs possible over the next few weeks. Longs worth considering ahead of that strength.
A more defensive long idea going into the Brexit vote is the DJ Select Dividend Index. This month has seen the P&F price chart move to a new all-time high plus the fund pays a dividend of 3.16%.
The relative ratio versus the S&P 500 sits at a 52-week high.
US Sector Indices
The Materials fund has just found support from its rising 50-day exponential moving average to resume the uptrend off the January low. The 14-day RSI is only at neutral, offering plenty of slack to allow new 2016 highs over the short-term. The sector fund remains a strong outperformer for 2016.
The Oil Service fund sports a similar chart to the XLB above. Steady price and relative uptrends off the January lows. Support is being provided by the 50-day exponential moving average and momentum is well positioned to allow further strength.
The Aerospace & Defense fund recorded a new all-time price high in the first half of June. Slight retreat over the past week and we see that as another entry opportunity in this long-term outperformer.
Other Developed Indices
The United Kingdom Index ETF is testing the underside of its 200-day exponential moving average going into the BREXIT vote. The general trend is down and therefore we would respect that direction for the time being. The fund also maintains a long-term downtrend against the S&P 500.
The India Index remains one of the stronger emerging market funds. The P&F price chart shows a breakout attempt underway this month through the 2015 down channel.
The P&F relative chart versus the S&P 500 also strengthened this month, extending its move off the February low with a box fill.
The Euro Trust is consolidating across its 200-day exponential moving average, towards the top end of a yearlong range. It remains to be seen whether the range is a bottom or a continuation pattern of the prior downtrend. That conundrum may be answered at the end of the week with the BREXIT result as it may cause a directional break from the range.
The Commodity fund is resuming its steady price uptrend off the January low. The move is expected to continue given that the 14-day RSI has only just reversed up from neutral.
A further positive is the 50-day exponential moving average rising through the 200-day to print a golden-cross.
The 7-10 year T-Bond fund may have just printed a bull-trap at the February high. Trading has been rejected by the $112 level, with the 14-day RSI turning down, resulting in a bearish divergence to the February momentum peak.
Longs should be avoided given the poor long-term performance versus the equity market as evident from the P&F relative chart.
ETF Trading (Long/Short) Longs
|Date||Stock||Code||Type||Open Price||Current Price||% P&L|
|27 Aug 2015||PowerShares QQQ||QQQ||Long||105.64||107.16||+1.44%|
|3 Sep 2015||SPDR Sector Trst Technology||XLK||Long||39.91||43.23||+8.32%|
|3 Nov 2015||iShares Japan Index||EWJ||Long||12.4||11.69||-5.73%|
|22 Dec 2015||SPDR Consumer Staples||XLP||Long||50.55||53.64||+6.11%|
|30 Dec 2015||iShares DJ US Medical Devices Fund||IHI||Long||123.56||132.71||+7.41%|
|10 Feb 2016||Diamond Trust- 1/100 DJIA||DIA||Long||159.39||177.8||+11.55%|
|17 Feb 2016||PowerShares Aerospace & Defense||PPA||Long||32.89||37.33||+13.50%|
|2 Mar 2016||Market Vectors Russia ETF||RSX||Long||15.12||17.51||+15.81%|
|17 Mar 2016||SPDR S&P Metals and Mining ETF||XME||Long||20.73||24.25||+16.98%|
|17 Mar 2016||CurrencyShares Canadian Dollar Trust||FXC||Long||76.3||77.32||+1.34%|
|17 Mar 2016||United States Oil Fund||USO||Long||10.55||11.91||+12.89%|
|22 Mar 2016||DJ US Pharmaceuticals Index Fund||IHE||Long||138.19||142.37||+3.02%|
|29 Mar 2016||SPDR Consumer Discretionary||XLY||Long||78.69||78.63||-0.08%|
|29 Mar 2016||iShares DJ Transportation Average||IYT||Long||142.47||138.16||-3.03%|
|5 Apr 2016||iShares Nasdaq Biotechnology||IBB||Long||269.64||258.7||-4.06%|
|5 Apr 2016||SPDR Sector Trst Health Care||XLV||Long||68.47||70.5||+2.96%|
|12 Apr 2016||SPDR Sector Trst Energy||XLE||Long||63.96||67.47||+5.49%|
|21 Apr 2016||SPDR Sector Trst Financial||XLF||Long||23.33||22.74||-2.53%|
|21 Apr 2016||SPDR Sector Trst Industrial||XLI||Long||56.27||56.24||-0.05%|
|21 Apr 2016||Base Metals||DBB||Long||12.97||12.97||0.00%|
|26 Apr 2016||Sugar||SGG||Long||36.46||45.2||+23.97%|
|10 May 2016||iShares S&P Global Energy Index||IXC||Long||31.08||32.35||+4.09%|
|7 Jun 2016||ISHS Russell 2000 Index||IWM||Long||117.56||115.3||-1.92%|
|7 Jun 2016||iShares Canada Index||EWC||Long||25.65||24.92||-2.85%|
ETF Trading (Long/Short) Shorts
|Date||Stock||Code||Type||Open Price||Current Price||% P&L|
|3 Feb 2016||Natural Gas||UNG||Short||7.55||8.18||-8.34%|
|3 Feb 2016||US 20+yrs||TLT||Short||127.95||134.16||-4.85%|
|17 May 2016||SPDR Sector Trst Utilities||XLU||Short||48.6108||50.36||-3.60%|
Copyright 2016 by Stockcube Research Ltd.