ETF Trends: Economic News Lifts Primary Trend for Stocks

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 |  Includes: AGG, BZF, CLX, CNA, CYB, DBA, DBB, DBC, DIA, FE, FNIO, FXA, FXB, FXC, FXE, FXM, FXRU, FXY, GFA, GLD, HAE, HUM, HYG, ICN, IEF, ITB, IWM, IYR, IYZ, JJC, JNK, JRCCQ, L, LEU, MCY, MDU, MGG, MGM, MRO, MUB, NNN, NRG, NS, NSP, PCRFY, PHO, POR, QQQ, REM, REZ, RTL, SHY, SLV, SPY, TAP, TIP, TLT, TSN, UGA, UNG, USO, UUP, VXX, XHB, XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY
by: J Clinton Hill

Bullish Events:

  1. July-2009 ISM manufacturing data posted 48.9 vs. consensus estimates of 46.5;
  2. June-2009 Construction Spending improved to 0.3% vs. consensus estimates of -0.5%;
  3. July-2009 motor vehicle sales rose 15% to 8.3mm annualized units vs. previous month’s 7.1mm; and
  4. economists in the private sector, e.g. Alan Greenspan and notorious Dr. Doom aka Nouriel Roubini, are also seeing plausible light at the end of an economic tunnel of darkness.

Bearish Events: N/A

Positive Earnings Surprises: Consumer Staples (TSN, TAP, CLX); Consumer Discretionary (PC); Medical (HAE, HUM); Construction (NYSE:MDU); Energy (USU, NS); Financials (GFA, CNA, MCY, NNN); Utilities (NYSE:FE)

Negative Earnings Surprises: Consumer Discretionary (NYSE:MGM); Energy (MGG, JRCC, MRO); Financials (NYSE:L); Utilities (POR, RRI); Business Services (ASF)

ETF Equity Indexes: There were no changes to the trends for the major equity indexes as they continued to make progress in their newly formed primary uptrend. Making 5 day new highs were the DIA, SPY, and IWM. ( As a side note, I must ask my readers to forgive my repetitiveness on the overbought condition of this market, but I feel compelled to point this out to any Johnny-come-latelies. A combination of rising prices and shrinking volume does not make a good recipe for a sustainable primary trend bull market. To illustrate this point, I have posted a brief technical report: If this is a new bull market, will the real bulls (i.e. buyers) please charge forward?)


ETF SectorS and Key Industries: New 5 day highs (XLF, XLB, XLE, XLI, XLY, RTH, RKH, IYT). Short-term trend upgrades - XLI. Worthy of honorable mention is RKH which is very close through the resistance of its long term downtrend. If it can achieve and sustain this, then the long-term implications and upside potential are quite bullish.

ETF Commodities: New 5 day highs (DBC, USO, SLV, DBB, UNG, DBA); Short-term trend upgrades - UNG; Intermediate trend upgrades - DBA; and Long-term trend upgrades (USO, DBA).

ETF Forex: New 5 day lows (NYSEARCA:UUP); Short-term trend upgrades (CEW, XRU); Short-term trend downgrades and Intermediate-term trend downgrades (NYSEARCA:FXY).

ETF Bonds: Short-term trend downgrades (IEF, TLT, TIP, AGG); and Intermediate-term trend upgrades (IEF, TLT, TIP). Volatility in bonds is likely to persist as economic data improves and talk of inflation is revisited. Another contributing factor to the demise of bonds is the less than mediocre reception to 2 out of the last 3 treasury auctions.

ETF Real Estate: New 5 day highs (ITB, XHB, IYR). Last Friday’s new 5 day high for the ITB was no fluke as Monday saw it joined by the XHB and IYR. There are no changes to trends for real estate ETFs covered in this report.

Until tomorrow, remain Hillbent for The Market Direction…

Support & Resistance Levels for U.S. Equity Indexes (for 08-04-2009)

Index ETF Ticker S3 S2 S1 Pivot R1 R2 R3
DJ-30 DIA 90.55 91.58 92.22 92.61 93.25 93.64 94.67
SP-500 SPY 97.65 98.87 99.66 100.09 100.88 101.31 102.53
NASDAQ-100 QQQQ 38.63 39.24 39.65 39.85 40.26 40.46 41.07
R2K IWM 54.33 55.29 55.91 56.25 56.87 57.21 58.17
VIX Futures ETF VXX 58.41 59.72 60.28 61.03 61.59 62.34 63.65
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ETF Trend Monitor (08-03-2009)

U.S. Equity ETFs Short-term Intermediate Primary
DIA (DJ Industrials) up up up
SPY (S&P 500) up up up
QQQQ (Nasdaq 100) up up up
IWM (Russell 2000) up up up
VXX (S&P 500 VIX Futures) down down down
Sector ETFs Short-term Intermediate Primary
XLY (Consumer Discrtn) up up up
XLP (Consumer Staples) up up up
XLE (Energy) up up down
XLF (Financials) up up down
XLV (Health Care) up up up
XLI (Industrials) up up lateral
XLB (Materials) up up up
XLK (Technology) up up up
IYZ (Telecom) up up down
XLU (Utilities) up up down
Key Industry ETFs Short-term Intermediate Primary
BBH (Biotech) up up up
OIH (Oil Services) up up down
PPH (Pharmaceuticals) up up up
RKH (Regional Banks) up up down
RTH (Retail) up up up
SMH (Semiconductors) up up up
SWH (Software) up up up
IYT (Transportation) up up up
Commodities Short-term Intermediate Primary
GLD (Gold) up up up
SLV (Silver) up up lateral
DBB (Base Metals) up up up
JJC (Copper) up up up
USO (Oil) up up up
UNG (Natural Gas) up down down
UGA (Gasoline) up up up
DBC (Commodities) up up lateral
DBA (Agriculture) up up lateral
Forex Short-term Intermediate Primary
UUP (U.S. Dollar) down down down
FXE (Euro) up up up
FXY (Japanese Yen) down lateral up
FXB (British Pound) up up up
FXC (Canadian Dollar) up up up
FXA (Australian Dollar) up up up
FXM (Mexican Peso) up up lateral
BZF (Brazilian Real) up up up
CYB (Chinese Yuan) lateral lateral lateral
ICN (Indian Rupee) up lateral n/a
XRU (Russian Ruble) lateral lateral n/a
CEW (Emerging Currency) up up n/a
Bonds Short-term Intermediate Primary
SHY (1-3 Yr Tsy) lateral lateral lateral
IEF (7-10 Yr Tsy) lateral down down
TLT (20 Yr+ Tsy) lateral down down
TIP (Tsy Inflation Protect) lateral lateral lateral
AGG (Investment Grade) lateral up up
JNK (Hi Yld Bonds) up up up
HYG (Hi Yld Corp) up up up
MUB (Nat’l Muni Bond) lateral lateral lateral
Real Estate Short-term Intermediate Primary
IYR (DJ US Real Estate) up up down
XHB (Homebuilders) up up lateral
ITB (Home Construction) up up lateral
FIO (Industrial Office) up up lateral
REM (Mortgage Reits) up up up
REZ (Residential Index) up up lateral
RTL (Retail Index) up up lateral
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Market Momentum Monitor (08-03-2009)

Market Momentum 20-Day MA 50-Day MA 200-Day MA
Today 89.42% 88.24% 88.57%
Yesterday 87.20% 85.61% 86.95%
Last Week 88.15% 85.12% 86.01%
Last Month 38.72% 55.15% 70.69%
Click to enlarge

Disclosures: Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.