ETF Market Trends: Resurgent U.S. Dollar Exacts Vengeance on Riskier Assets

ETF Market Direction Summary: 10-28-2009

U.S. Equities: Selling was considerably stronger in Wednesday’s trading session and pushed the S&P 500 and Nasdaq Composite below their 50 day moving averages. The Dow Industrials surrendered its short-term uptrend status and reversed downward and is probing support at its 50 day moving average.

From a technical analysis perspective, such a large breadth of issues exhibiting trading patterns of falling prices on increasing volume generally signals capitulation. Market momentum (see tables below) has also reached extreme lows. Under such conditions, and perhaps with the assistance of a positive GDP report on Thursday, I would not be surprised to see some sort of bounce or reversal. This alone may not be enough to stem the selling, but could provide some temporary relief or an opportunity to sell into strength. (In plain English, I would be suspect of any rallies without a trend reversal.)

Market moving events were fairly positive, but obviously not enough to stop the bear raid. Earnings results were better than expected. Durable Goods orders for September were up +1%, which met consensus expectations, while the transportation component exceeded estimates at +0.9%.

The negative piece of economic data was New Home Sales, which declined -3.6% in September to 402k vs. 440k consensus estimates. Real estate remains one of the weakest links in the economy’s food chain, so this disappointment should not surprise anyone.

Treasury rates for 10 year and 30 year bonds have temporarily peaked and are testing support at their 50 day moving averages. Treasury bond rates have moved downward for two consecutive days. Needless to say, this has been bullish for bond prices. The IEF and TLT have appreciated 2 days in a row now.

The U.S. Dollar is exacting some vengeance on emerging markets, high risk bonds, and commodities. The dollar index closed at $76.48 and is trading above its 20 day moving average and only $0.40 below its 50 day moving average. One need only study the trend tables below and observe price performance and volume percentage changes to confirm this shift in sentiment towards capital flight to safety.

There were quite a few intermediate-term downgrades today. For domestic equities, international equities, commodities, forex, bonds, and real estate, please refer to the trend tablles below:

ETF 5 Day New Highs: U.S. Equties (VXX, VXZ); Forex (UUP, FXY); Bonds (AGG, IEF, MBB, SHY, TIP). (Note * denotes 250 day new high)

ETF 5 Day New Lows: U.S. Equities (DIA, SPY, QQQQ, IWM, IYZ, XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLY, XLV, BBH, ITA, IYT, OIH, PPH, RKH, RTH, SEA, SMH, SWH); International Equities (EWC, EWW, EWZ, ILF, ISI, RSX, EWG, EWQ, EWU, IEV, VGK, EWA, EWH, EWJ, EWM, EWS, EWT, FXI, IF, IFN, VNM, GUR, GML, EEM, GMF, GAL, EWX); Commodities (CRBQ, DBA, DBB, DBC, GLD, JJC, JJG, SLV, UGA, UNG, USO); Forex (BZF, CEW, CYB, FXA, FXC, FXE, FXF, ICN, XRU); Bonds (EMB, HYG, JNK); Real Estate (FIO, ICF, IYR, ITB, REM, REZ, RTL, XHB). (Note * denotes 250 day new low)

Signing off at Hillbent on the Market Direction and ETF Market Trends™…

Hillbent Market Direction Resources

Economic Calendar Events: Refer to U.S. Calendar or International Calendar

Postive & Negative Earnings Surprises: Refer to Hillbent’s earnings summary report for a detailed analysis of positive & negative earnings surprises

ETF Market Trends™ Monitor (10-28-2009)

U.S. Equity ETFs
Equity Indexes	Price	%Chg	Vol%	PMI	ST	MT	LT
DIA (DJ Industrials)	97.68	-1.15%	41.60%	4	down	up	up
SPY (S&P 500)	104.41	-1.89%	27.30%	3	down	up	up
QQQQ (Nasdaq 100)	41.39	-2.24%	32.40%	9	down	up	up
IWM (Russell 2000)	56.83	-3.33%	81.30%	11	down	down	up
VXX (VIX Futures)	46.17	6.92%	86.80%	99	up	down	down
Major Sectors	Price	%Chg	Vol%	PMI	ST	MT	LT
XLY (Consumer Discrtn)	26.82	-2.83%	22.30%	6	down	down	up
XLP (Consumer Staples)	25.82	-0.27%	191.50%	11	down	up	up
XLE (Energy)	55.94	-3.30%	18.50%	7	down	up	up
XLF (Financials)	14.15	-3.10%	4.60%	8	down	down	up
XLV (Health Care)	28.23	-1.02%	59.20%	8	down	down	up
XLI (Industrials)	25.57	-2.07%	56.10%	0	down	down	up
XLB (Materials)	29.55	-3.08%	37.30%	7	down	down	up
XLK (Technology)	20.77	-1.47%	60.90%	3	down	up	up
IYZ (Telecom)	17.63	-0.73%	116.30%	20	down	down	up
XLU (Utilities)	28.68	-1.00%	149.60%	9	down	down	up
Key Industries	Price	%Chg	Vol%	PMI	ST	MT	LT
ITA (Aerospace & Defense)	45.59	-2.48%	94.50%	4	down	down	up
BBH (Biotech)	91.98	-1.47%	23.50%	9	down	down	down
OIH (Oil Services)	118.36	-4.41%	69.20%	8	down	up	up
PPH (Pharmaceuticals)	61.67	-0.93%	40.60%	3	down	down	up
RKH (Regional Banks)	76.68	-2.80%	9.80%	9	down	down	up
RTH (Retail)	90.03	-1.41%	3.60%	0	down	up	up
SMH (Semiconductors)	24.34	-2.54%	50.70%	1	down	down	up
SWH (Software)	38.78	-3.94%	551.80%	11	down	up	up
SEA (Global Shipping)	12.31	-5.45%	73.00%	7	down	down	up
IYT (Transportation)	65.28	-1.94%	45.90%	6	down	down	up
International Equity ETFs
Americas	Price	%Chg	Vol%	PMI	ST	MT	LT
ISI (S&P 1500)	46.84	-2.00%	-41.80%	0	down	down	up
EWC (MSCI Canada)	23.87	-3.40%	78.90%	12	down	down	up
EWW (MSCI Mexico)	43.34	-3.54%	40.10%	1	down	down	up
ILF (Latin America 40)	42.38	-5.11%	190.10%	0	down	up	up
EWZ( MSCI Brazil)	66.91	-6.39%	89.10%	5	down	up	up
Europe	Price	%Chg	Vol%	PMI	ST	MT	LT
EWU (MSCI United Kingdom)	15.62	-2.19%	-18.20%	21	down	up	up
EWG (MSCI Germany)	21.28	-3.58%	74.80%	0	down	down	up
EWQ (MSCI France)	24.88	-3.00%	27.50%	16	down	down	up
RSX (Mkt Vectors Russia)	27.59	-7.45%	248.90%	5	down	up	up
VGK (Vanguard Europe)	48.60	-2.72%	20.20%	8	down	up	up
IEV (S&P Europe 350)	37.81	-2.70%	-19.80%	12	down	up	up
Asian-Pacific	Price	%Chg	Vol%	PMI	ST	MT	LT
EWA (MSCI Australia)	22.46	-4.51%	197.90%	29	down	up	up
FXI (FTSE China)	42.19	-3.81%	59.10%	15	down	up	up
EWH (MSCI Hong Kong)	15.52	-2.57%	106.00%	18	down	up	up
IFN (India Fund)	28.46	-1.49%	19.00%	25	down	down	up
EWJ (MSCI Japan)	9.52	-1.04%	24.10%	20	down	down	up
EWS (MSCI Singapore)	10.52	-2.86%	135.20%	15	down	down	up
EWY (MSCI South Korea)	43.45	-4.13%	38.80%	6	down	down	up
EWT (MSCI Taiwan)	11.87	-2.78%	26.30%	37	down	up	up
IF (Indonesia Fund)	9.20	-4.86%	290.50%	40	down	down	up
EWM (MSCI Malaysia)	10.54	-2.41%	-3.10%	11	down	up	up
VNM (Vietnam)	29.23	-2.95%	22.00%	13	down	n/a	n/a
Emerging Markets	Price	%Chg	Vol%	PMI	ST	MT	LT
EEM (MSCI Emerging Mkts)	37.74	-4.58%	142.70%	6	down	down	up
GMF (Emerging Asia Pacific)	68.56	-3.01%	164.90%	35	down	up	up
GUR (Emerging Europe)	40.20	-6.47%	211.90%	11	down	up	up
GML (Emerging Latin America)	69.73	-5.82%	170.10%	3	down	up	up
GAF (Middle East & Africa)	57.67	-3.67%	45.40%	20	down	down	up
EWX (Emerging Small Caps)	43.18	-4.60%	184.70%	18	down	up	up
Alternative Assets
Commodities	Price	%Chg	Vol%	PMI	ST	MT	LT
GLD (Gold)	100.73	-1.10%	58.80%	6	down	up	up
SLV (Silver)	15.86	-2.94%	84.00%	10	down	up	up
DBB (Base Metals)	19.55	-3.98%	39.50%	8	down	up	up
JJC (Copper)	40.29	-2.82%	-19.80%	2	down	up	up
USO (Oil)	39.46	-2.78%	17.80%	3	down	up	up
UNG (Natural Gas)	10.35	-4.34%	-23.50%	10	down	down	down
UGA (Gasoline)	36.21	-3.94%	-6.40%	5	up	up	up
CRBQ (Global Commodities)	39.02	-3.83%	111.50%	18	down	n/a	n/a
DBC (Commodities)	23.47	-2.57%	42.30%	0	down	up	up
JJG (Grains)	38.06	-0.89%	-13.00%	45	down	up	down
DBA (Agriculture)	25.44	-1.40%	19.70%	3	down	up	up
Forex	Price	%Chg	Vol%	PMI	ST	MT	LT
UUP (U.S. Dollar)	22.73	0.41%	350.20%	88	up	down	down
FXE (Euro)	146.97	-0.54%	41.70%	11	down	up	up
FXY (Japanese Yen)	109.37	1.19%	2.60%	59	up	up	up
FXF (Swiss Franc)	97.03	-0.39%	209.10%	11	down	up	up
FXB (British Pound)	163.45	0.06%	-39.20%	23	up	up	up
FXC (Canadian Dollar)	92.47	-1.19%	216.50%	19	down	down	up
FXA (Australian Dollar)	89.89	-1.91%	226.10%	9	down	up	up
FXM (Mexican Peso)	75.41	-0.34%	-44.00%	0	down	down	up
BZF (Brazilian Real)	25.94	-1.89%	94.70%	4	down	up	up
CYB (Chinese Yuan)	25.29	0.04%	23.40%	33	lateral	lateral	lateral
ICN (Indian Rupee)	24.56	-0.81%	0.50%	40	down	up	up
XRU (Russian Ruble)	34.11	-1.13%	-90.90%	0	down	up	n/a
CEW (Emerging Currency)	21.60	-0.78%	77.60%	32	down	down	up
Bonds	Price	%Chg	Vol%	PMI	ST	MT	LT
SHY (1-3 Yr Tsy)	83.99	0.14%	-4.40%	91	up	up	down
IEF (7-10 Yr Tsy)	91.75	0.31%	17.00%	62	up	up	down
TLT (20 Yr+ Tsy)	95.45	0.47%	11.80%	58	down	down	down
TIP (Tsy Inflation Protect)	103.62	0.08%	10.90%	45	up	up	up
AGG (Investment Grade)	104.62	0.14%	11.80%	88	up	up	up
MBB (Mortgage Bonds)	107.08	0.15%	-24.00%	73	up	up	up
JNK (Hi Yld Bonds)	37.85	-1.36%	98.60%	30	down	up	up
HYG (Hi Yld Corp)	84.80	-1.65%	73.20%	1	down	up	up
WIP (Int’l Inflation Protect)	56.30	-0.20%	33.10%	5	down	up	up
EMB (Emerging Markets Bonds)	101.43	-0.96%	49.70%	60	down	up	up
MUB (Nat’l Muni Bond)	102.87	-0.27%	-49.90%	2	down	down	up
Real Estate	Price	%Chg	Vol%	PMI	ST	MT	LT
IYR (DJ US Real Estate)	39.63	-4.18%	50.60%	83	down	down	up
ICF (Cohen & Steers)	45.04	-4.27%	78.00%	4	down	down	up
XHB (Homebuilders)	13.88	-4.93%	134.50%	10	down	down	up
ITB (Home Construction)	11.23	-4.67%	116.20%	4	down	down	up
FIO (Industrial Office)	20.23	-5.11%	230.20%	0	down	down	up
REM (Mortgage Reits)	14.06	-2.29%	131.70%	0	down	down	up
REZ (Residential Index)	26.96	-3.16%	236.80%	0	down	down	up
RTL (Retail Index)	18.77	-4.48%	-36.50%	0	down	down	up

*PMI measures strength of % daily trading range on scale of 0 to 100

**ST = Short-Term Trend; MT = Intermediate Trend; LT = Long-Term or Primary Trend

***Vol% measures % change in daily volume vs. average daily volume

Market Momentum Summary: 10-28-2009

Market Momentum	20-Day MA	50-Day MA	200-Day MA
Today	33.51%	57.82%	88.03%
Yesterday	50.59%	67.90%	89.67%
Last Week	70.28%	78.66%	91.93%
Last Month	78.11%	83.03%	92.17%

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.

Comments

[NEOCON47:]

Did you look up what caused the GDP to rise?

The numbers are not healthy nor the Brige Book Report of Oct. 21

I betcha you didn't.

Also, with all of these charts, why don't you chart International Bonds, ETFS?

Oct 31 07:35 PM

[J Clinton Hill:]

neocon47:

the primary purpose of this report is to focus on etf market trends for highly liquid securities that mimic or represent capital market indices, assets, industries, geographical regions, and/or investment themes.

i'm afraid you lose this bet because i did read the gdp report and analyze its driving catalysts. listen, there are plenty of bloggers at SA who focus on economic data events, so you can probably find excellent coverage on this segment of the vast universe of investment finance.

for international bonds, this report currently includes WIP (international inflation protection) and EMB (emerging markets bonds).

starting next week, this report will include the addition of BWX (international treasury bonds).

if you have other suggestions for bond ETFs that are highly liquid and widely followed, please let me know and i will definitely give it consideration.

note that this report will never cover every niche of the ETF universe, but hopefully enough to allow readers to efficiently assess the overall market condition and direction.

thanks for your suggestion... hopefully, it will benefit plenty of others besides yourself.

have a great weekend!


On Oct 31 07:35 PM NEOCON47 wrote:

> Did you look up what caused the GDP to rise?
>
> The numbers are not healthy nor the Brige Book Report of Oct. 21
>
>
> I betcha you didn't.
>
> Also, with all of these charts, why don't you chart International
> Bonds, ETFS?

Nov 01 12:14 AM