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ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
24 January 2017
     

Market Overview

 

The overlay of the S&P 500 fund (SPY) and our short-term-composite indicator depicts a healthy market. The SPY is trading sideways, consolidating close to record highs. Yet the short-term-composite is slap bang on neutral, offering plenty of upside should the equity market resume its uptrend, a move which is expected eventually. 

We remain net long equity funds with no changes to our portfolio today. However, some areas remain weak and they are highlighted.

 

 

 


 

This Week's Trades

  • None.

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

 


 

Other ETF Highlights

 

  • Dow Jones Industrial (DIA) - Buy Reiterated
  • Utilities Index (XLU) - Sell
  • Pharmaceuticals Index (IHE) - Sell
  • Networking Index (IGN) - Buy
  • Steel (SLX) - Buy
  • Taiwan Index (EWT) - Buy
  • BRIC (EEB) - Buy
  • British Pound Sterling Trust (FXB) - Watch to Buy
  • Base Metals (DBB) - Buy Reiterated
  • Emerging Markets Bond (EMB) - Watch to Buy

 


 

Analysis

 

US Equity Indices

 

The Dow Jones Industrial ETF remains in a sideways move, consolidating the rally off the early November low. Trading is now feeling for support from the 20-day exponential moving average.

With momentum, the 14-day RSI, down to neutral, the uptrend should soon reassert. Entry here could place a stoploss just under $195.

 

 

 

US Sector Indices

 

The Utilities Index fund continues to struggle at the $49 ceiling. Watching for an eventual reassertion of the down move off the early July high. 

The P&F relative chart remains in a long-term downtrend.

 

The Pharmaceuticals Index Fund is weakening once again following an encounter with resistance from its 200-day exponential moving average at the start of the month. The deterioration should continue as downside momentum is strong and not oversold.

The P&F relative chart is resuming its 18 month correction; longs should be avoided.

 

 

The Networking Index Fund is well positioned to resume its long-term uptrend as it consolidates across its 50-day exponential moving average. The 14-day RSI is in a good field position, across neutral. Record highs possible in late February. 

 

The Steel Fund is reasserting its yearlong price and relative uptrends. Conditions are not overbought; new 52-week highs imminent.

 

 

Other Developed Indices

 

The Taiwan Index ETF is rallying following a late December correction into the 200-day exponential moving average. Fresh all-time price highs are likely in a few weeks time. The 14-day RSI is in an appealing position. Risk could be limited to just under $29.

 

 

 

 

Emerging Indices

 

The BRIC fund may register a new 52-week high this week as it reasserts its yearlong price and relative up channels. Momentum is comfortably positioned to allow the strength to continue. The 200-day exponential moving average could be used as a trailing stop.

The P&F chart is just a whisker away from reversing up. 

 

 

 

Currencies

 

This month the British Pound Sterling Trust has left a small bear-trap at the level of the October 2016 lows. Additionally this month's low coincided with a bullish divergence on the 14-day RSI.

Recent action reveals a double-bottom could be building. That would confirm on a break above $125, projecting a move to over $130. 

 

 

Commodities

 

Uptrends are strengthening again for the Base Metals ETF. The reassertion came with the New Year. Momentum has the room to allow further gains over the next couple of weeks at least. 

Fresh longs could use a break down through the 50-day exponential moving average as a trailing stoploss.

 

 

Bonds

 

The Emerging Markets Bond maintains its developing uptrend off the November 2016 low. The price is challenging its 200-day exponential moving average and closing above it would turn the line into support. The short-term rally should continue.

Present yield is 4.84%.

 

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 45.92 +25.95%
12 Jul 2016 ISHS Russell 2000 Index IWM Long 119.72 133.88 +11.83%
12 Jul 2016 iShares Dow Jones US Aerospace & Defense Index Fund ITA Long 127.66 141.25 +10.65%
12 Jul 2016 Semiconductor HOLDRS SMH Long 59.36 73.12 +23.18%
19 Jul 2016 PowerShares QQQ QQQ Long 112.13 123.35 +10.01%
19 Jul 2016 SPDR Sector Trst Materials XLB Long 48.81 51.19 +4.88%
19 Jul 2016 SPDR Sector Trst Technology XLK Long 45.21 49.89 +10.35%
19 Jul 2016 Base Metals DBB Long 13.79 16.09 +16.68%
26 Jul 2016 iShares Brazil Index EWZ Long 32.57 37.67 +15.66%
2 Aug 2016 iShares GS Semiconductor Index SOXX Long 102.48 125.01 +21.98%
30 Aug 2016 iShares DJ US Broker-Dealers Index Fund IAI Long 41.8277 50.22 +20.06%
6 Sep 2016 iShares GS Software Index Fund IGV Long 113.91 114.77 +0.75%
6 Sep 2016 iShares Japan Index EWJ Long 50.12 50.52 +0.80%
13 Sep 2016 DJ US Regional Banks Index Fund IAT Long 35.24 44.6899 +26.82%
8 Nov 2016 iShares DJ Transportation Average IYT Long 149.74 164.61 +9.93%
8 Nov 2016 streetTRACKS KBW Bank ETF KBE Long 34.94 42.65 +22.07%
22 Nov 2016 SPDR Sector Trst Industrial XLI Long 61.91 63.09 +1.91%
29 Nov 2016 Diamond Trust- 1/100 DJIA DIA Long 191.19 197.78 +3.45%
6 Dec 2016 iShares Switzerland Index EWL Long 28.85 30.26 +4.89%
10 Jan 2017 SPDR Sector Trst Health Care XLV Long 71.5 69.55 -2.73%

ETF Trading (Long/Short) Shorts

Date Stock Code Type Open Price Current Price % P&L
13 Sep 2016 iShares S&P National Municipal Bond Fund MUB Short 112.63 108.45 +3.71%
4 Oct 2016 SPDR Sector Trst Utilities XLU Short 47.29 48.39 -2.33%
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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