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

Market Overview

 

Equity funds have been weak with the start of the New Year. The S&P 500 (SPY) is probing the bottom of its two month range. At the same time indicators, such as our Short-term-composite, are at the lower end of their ranges, basing in oversold territory. The chances of a reversion from here by domestic equity funds is high. Commodity, currency, bond and foreign equity funds though remain weak, partly weighed down by the strong greenback. 

 

 

 


 

This Week's Trades

  • None.

 


 

Other ETF Highlights

 

  • NASDAQ 100 (QQQ) - buy reiterated
  • Consumer Staples (XLP) - buy reiterated
  • Consumer Discretionary (XLY) - buy reiterated
  • Health Care (XLV) - buy reiterated
  • Europe 350 Index (IEV) - sell
  • Canada Index (EWC) - sell
  • China 25 Index Fund (FXI) - sell
  • British Pound Sterling Trust (FXB) - sell
  • Swiss Franc Trust (FXF) - sell
  • Copper (JJC) - sell
  • 1-3 year T-Bond Fund (SHY) - sell

 


 

Analysis

 

US Equity Indices

 

The NASDAQ 100 (QQQ) fund has pulled back to test support from its 200-day exponential moving average. 

With the long-term relative trend, versus the S&P 500, remaining up, we would see present weakness as an entry opportunity. We reiterate our buy advice. 

 

 

 

US Sector Indices

 

The Consumer Staples (XLP) fund is consolidating just beneath its recent record high. The 14-day RSI has unwound back to neutral, preparing the chart for the next up leg. 

The long-term relative trend is up and we would see the drop today as a chance to add.

Present yield is 2.54%. 

 

 

 

The Consumer Discretionary (XLY) fund is also testing support from its 200-day exponential moving average. A brief break of the average as per August and September is possible. 

The P&F relative chart reflects the ongoing outperformance. 

 

The Health Care (XLV) fund maintains its long-term rising price and relative uptrends. Even if the price chart were to reverse down from here, it would merely extend the sideways consolidation, offering an entry window. 

 

 

Other Developed Indices

The start of the New Year has seen box fills to the downside on the price and relative P&F charts for the Europe 350 Index (IEV) fund.

The price really needs to hold that September low to avoid harming the wide 2009 up channel. 

With the relative chart at an all-time low, we continue to avoid longs. 

 

 

The Canada Index (EWC) fund filled a fresh box to the downside on Monday, resuming the downtrend off the September 2014 peak. A five year price top has also confirmed, activating a target down towards $15. 

Coupled to the tanking relative ratio, versus the U.S. equity market, we would continue to steer clear.  

 

 

 

Emerging Indices

 

The China 25 Index Fund (FXI) weakened on Monday, with the P&F price and relative charts both sliding south. The price is heading towards the 2012/13 lows. 

Longs should be avoided given the relative ratio, versus the S&P 500, sitting near record lows (from 2004).

 

 

 

Currencies

 

The British Pound Sterling Trust (FXB) has been weak with the New Year, slipping lower, heading towards the five year support shelf across $140. Beneath that is potential support across $136 from 2009. 

The long-term relative trend against the U.S. equity market remains down. 

 

 

The Swiss Franc Trust (FXF) is also deteriorating, peeling away from resistance from the 100-day exponential moving average. The 14-day RSI has rolled over, with further room to fall. 

Here too the long-term relative trend, versus equities, is down. 

 

 

Commodities

 

Copper (JJC) is reasserting its five year price and relative downtrends. The 50-day exponential moving average has been providing resistance for the past several months and should continue to do so.

The 14-day RSI has only just rolled over from neutral, so the slack is there to allow new 52-week lows in a few weeks time. 

 

 

Bonds

 

The 1-3 year T-Bond Fund (SHY) is breaking lower from its 25-day exponential moving average, resistance for the past three months. New 52-week lows imminent.

Longs should still be avoided as no signs of a bottom yet.

 

MODEL PORTFOLIO

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 130.785 124.17 -5.06%
27 Aug 2015 PowerShares QQQ QQQ Long 105.64 109.31 +3.47%
27 Aug 2015 SPDR Consumer Discretionary XLY Long 75.53 76.72 +1.58%
27 Aug 2015 SPDR Sector Trst Energy XLE Long 64.29 60.53 -5.85%
27 Aug 2015 iShares Germany Index EWG Long 26.64 25.32 -4.95%
27 Aug 2015 United States Oil Fund USO Long 13.95 10.66 -23.58%
3 Sep 2015 iShares Nasdaq Biotechnology IBB Long 338.63 326.96 -3.45%
3 Sep 2015 SPDR Sector Trst Technology XLK Long 39.91 42.16 +5.64%
9 Sep 2015 iShares GS Software Index Fund IGV Long 94.96 101.55 +6.94%
23 Sep 2015 PowerShares DB US Dollar Index Bullish UUP Long 25.12 25.84 +2.87%
30 Sep 2015 SPDR Sector Trst Health Care XLV Long 66.23 71.07 +7.31%
8 Oct 2015 SPDR Sector Trst Materials XLB Long 44.17 42.72 -3.28%
8 Oct 2015 Oil Service HOLDRS OIH Long 30.75 26.25 -14.63%
8 Oct 2015 iShares South Korea Index EWY Long 52.91 48.72 -7.92%
3 Nov 2015 SPDR Midcap Index Trust MDY Long 266.93 250.9 -6.01%
3 Nov 2015 iShares Japan Index EWJ Long 12.4 12.08 -2.58%
1 Dec 2015 iShares GS Semiconductor Index SOXX Long 93.03 87.96 -5.45%
22 Dec 2015 SPDR Consumer Staples XLP Long 50.55 50.17 -0.75%
30 Dec 2015 iShares DJ US Medical Devices Fund IHI Long 123.56 119.88 -2.98%

ETF Trading (Long/Short) Shorts

Date Stock Code Type Open Price Current Price % P&L
2 Jul 2014 Agriculture ETF DBA Short 27.47 20.28 +26.17%
11 Nov 2014 CurrencyShares Japanese Yen Trust FXY Short 84.29 81.4 +3.43%
29 Jul 2015 Emerging Markets Bond EMB Short 109.3 105.95 +3.06%
6 Aug 2015 US Investment Grade Crp LQD Short 115.47 114.01 +1.26%
19 Aug 2015 CurrencyShares Australian Dollar Trust FXA Short 73.58 71.62 +2.66%
27 Aug 2015 CurrencyShares Japanese Yen Trust FXY Short 80.24 81.4 -1.45%
27 Aug 2015 iShares 7-10 yr T-Bond Fund IEF Short 106.52 106.01 +0.48%
16 Sep 2015 iPATH S&P 500 VIX Short-Term Futures ETN VXX Short 22.09 20.67 +6.43%
16 Sep 2015 iShares S&P National Municipal Bond Fund MUB Short 108.19 110.6 -2.23%
23 Sep 2015 Market Vectors Agribusiness ETF MOO Short 46.43 45.86 +1.23%
30 Sep 2015 Gold GLD Short 106.86 103.18 +3.44%
14 Oct 2015 WisdomTree Dreyfus Brazilian Real Fund BZF Short 12.8301 12.5 +2.57%
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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