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ETF Global Opportunities
By Tarquin Coe
26 March 2018
     

Market Overview

 

Medium-term breadth for the broad market fell last week but the NYSE Bullish % remains above neutral. More of an unwinding would be healthier for the market over the long-term. Note the oversold condition, under 20%, at the start of 2016 which initiated the 2 year rally. 

 

 


 

This Week's Trades

  • Gold (GLD) - Buying
  • KBW Bank Index (KBE) - close long
  • US Treasury Inflation Protected Securities (TIP) - close short 

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

 


 

Analysis

 

US Equity Indices

 

The Dow Industrials ETF dropped down to its 200-day exponential moving average with last week's sell-off. The 14-day RSI has a little further to go before hitting oversold and that could allow more weakness in the sessions ahead.  

 

 

US Sector Indices

 

The KBW Bank ETF is retreating fast following a new decade high earlier this month. The price and relative up trends of the past several months are breaking down. 

Correction by the fund is underway; we shall exit our long position today.

 

 

The Materials ETF generated a P&F sell signal on Friday with last week's weakness. A new low for 2018 was made; correction underway.  

The P&F relative chart turned down this month, reasserting its long-term downtrend. 

Watch to sell on any strength. 

 

 

 

Other Developed Indices

 

Last week the Spain Index ETF broke through its 6 month floor, activating a top formation. The top projects a move down to the $28 region. 

The P&F relative chart, versus the U.S. equity market, filled a box to the downside this month, reasserting its long-term downtrend. 

 

 

Emerging Indices

 

The India Index ETN made a new 2018 low on Friday as it's correction extends. 2017 rising trendline support is now broken, signifying more weakness ahead. 

The P&F relative chart has is reasserting its long-term downtrend. 

 

 

Currencies

 

The Japanese Yen Trust made a new 52-week high on Friday. With momentum not being overbought, the rally should continue. The P&F chart shows a break of trendline resistance, with the next upside level to watch being the $96 level. 

 

 

 

Commodities

 

The Gold ETF rallied last week, outperforming the falling equity market. The 14-day RSI has room to climb and that should allow new 52-week highs over the short-term.

A break above $130 on the P&F chart would activate a long-term base, projecting a move towards $160. 

We shall buy the GLD today. 

 

 

 

Bonds

 

The US Treasury Inflation Protected Securities Fund has outperformed the equity market since the end of January. A short-term up trend is developing off the February low, with a favorable momentum condition. 

We shall exit our short position today. 

 

 

MODEL PORTFOLIO

ETF Trading (Long/Short) Longs

Date Stock Code Type Open Price Current Price % P&L
30 Aug 2016 iShares DJ US Broker-Dealers Index Fund IAI Long 41.8277 63.55 +51.93%
13 Sep 2016 DJ US Regional Banks Index Fund IAT Long 35.24 49.02 +39.10%
8 Nov 2016 streetTRACKS KBW Bank ETF KBE Long 34.94 46.75 +33.80%
9 May 2017 United States Oil Fund USO Long 9.57 13.28 +38.77%
16 Jan 2018 iShares MSCI Emerging EEM Long 49.32 46.89 -4.93%
26 Feb 2018 SPDR Sector Trst Utilities XLU Long 50.2 49.06 -2.27%
ETF Trading (Long/Short) Shorts
Date Stock Code Type Open Price Current Price % P&L
14 Feb 2017 Livestock COW Short 22.16 21.22 +4.24%
10 Jul 2017 iShares Barclays US Treasury Inflation Protected Securities Fund TIP Short 112.41 112.58 -0.15%
5 Feb 2018 ISHS Russell 2000 Index IWM Short 147.92 150.05 -1.44%
12 Feb 2018 iShares S&P Europe 350 Index IEV Short 46.7 45.53 +2.51%
20 Feb 2018 Agriculture ETF DBA Short 18.98 18.87 +0.58%
20 Feb 2018 Market Vectors Russia ETF RSX Short 23.09 22.5 +2.56%
5 Mar 2018 US Investment Grade Crp LQD Short 116.21 115.72 +0.42%
5 Mar 2018 iShares United Kingdom Index EWU Short 34.6 33.92 +1.97%
20 Mar 2018 iShares South Korea Index EWY Short 75.85 71.83 +5.30%
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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