ETF Market Trends: GDP Upside Surprise Ironically Gives Worry to Sustainable Recovery

ETF Market Direction Summary: 10-30-2009

U.S. Equities: The eve of Halloween was as good a time as any to scare investors out of the market. On Friday, signs of capitulation re-emerged as volume surged higher for major U.S. equity index exchange traded funds (see Vol % change numbers for SPY, DIA, QQQQ, and IWM in trend tables below). The VIX, our favorite fear indicator, spiked at 24% for the day. Short term support at the 20 day moving average has collapsed for nearly 85% of stocks and more than 56% of stocks are trading at least 5% or more below this moving average. The all important 50 day moving average, a reliable indicator for the intermediate-term direction for stocks, has also collapsed.

Econostagflationasaurus, whether real or imaginary, is the monster that has suddenly frightened investors. Ironically, Thursday’s positive upside surprise in GDP has created an inflection point and given worry to a sustainable economic recovery strong enough to justify the 20x operating income price of the S&P 500. On Friday morning, the put/call ratio for the S&P 500 index stood at 1.34 and by the final hour of trading it shot up to 1.97.

Are some bulls beginning to come out of denial and accept the reality and implications of a Financial sector that is too weak to function independently of government support? Only time will tell, but the S&P 500 has incurred its first monthly loss since 7 consecutive monthly gains and several linchpin sectors or industries suffered significant weekly losses: XLF (Financials) -7.02%, RKH (Regional Banks) -8.43%; and XHB (Homebuilders) -8.25%. Yes, these represent some of the weakest links in the economy, but many economists and strategists are betting on their turnaround to propel economic growth.

Instead of shifting into neutral, the market finds itself in reverse gear while awaiting next week’s FOMC policy meeting which should clear some uncertainty on the Fed’s assessment for future economic growth. The accomodative interest rate policies of the Fed and taxpayer bailouts is resuscitating "too big to fail" banks and other systemically correlated companies, but the cost, i.e. the fallen almighty dollar, is proving unbearable to both America’s consumers and creditors.

For how much longer can anyone endure a weak dollar? Consumers are still spending less and central banks, like falling dominoes, are starting to raise target rates (think Norway, Australia, and Israel). At present, there is no fundamental catalyst for the recent bounce in the dollar (up +1.18% for the week). Regarding dollar weakness, this too shall pass, but things may get worse before they get better. Let us pray that we do not have to descend to levels anywhere between The Abyss and Giants Well of Dante’s Hell before redemption is in store for the U.S. dollar.

The nearby trends for equities and any other assets oriented toward risks are down. The trend monitor below indicates a much broader breadth of these assets moving into intermediate downtrends, a development which takes time to manifest and if sustainable, not very quickly reversed.

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

ETF New 5 Day Highs & Lows

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

ETF 5 Day New Lows: U.S. Equities (DIA, SPY, QQQQ, IWM, IYZ, XLB, XLE, XLF, XLI, XLK, XLU, XLV, XLY, ITA, IYT, OIH, PPH, RKH, RTH, SMH, SWH); International Equities (ISI, EWW, EWC, EWG, EWQ, IEV, VGK, EWU, IFN, EWY, VNM, EWA, FXI, EWS, EWT, EWM, EWH, EWJ, GUR, EEM, GMF, GAF, EWX); Commodities (CRBQ, USO, DBB, UGA, UNG); Forex (FXC, FXF, XRU); Bonds (MUB, JNK); Real Estate (ITB, XHB). (Note * denotes 250 day new low)

Hillbent Market Direction Resources

Key Market Moving Events for the week of 11-2-209 to 11-6-2009:

• Monday (11-2-2009)–> ISM Manufacturing Index and Pending Home Sales Report; Earnings (APC, CHK, CLX, DF, ED, F, HUM, L, NU, PFG, RSG, SYY, VMC)
• Tuesday (11-3-2009)–> Earnings (ABC, ADM, AMT, CAM, COL, CTSH, DNR, DVA, EMR, EXPD, FTR, HCP, HIG, ICE, KFT, MA, MHS, PBI, PXD, RDC, RL, THC, UNM, VIA.B, VNO)
• Wednesday (11-4-2009)–> ADP Employment Report, ISM Non-Manufacturing Index, EIA Petroleum Status Report, and FOMC Policy Statement; Earnings (ADP, ALL, BDX, BHI, CMCSA, CSCO, DVN, EP, IFF, MCHP, MMC, NWSA, PHM, PRU, QCOM, RRD, TAP, TEG, TWX, WFMI, WPI, XTO)
  
• Thursday (11-5-2009)–> Jobless Claims, Productivity & Costs, and EIA Natural Gas Status Report; Earnings (AES, CAH, CBS, CI, CTL, CVS, DPS, DTV, DYN, EOG, HCN, IGT, JDSU, KG, KIM, LUK, MIL, NDAQ, NVDA, PCS, PSA, SBUX, SE, SLE, SNI, SUN, TDC, TWC, VRSN)
  
• Friday (11-6-2009)–> Employment Situation Report, and Consumer Credit; Earnings (EIX)
  

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 (10-30-2009)

U.S. Equity ETFs
Equity Indexes	Price	%Chg	Vol%	PMI	ST	MT	LT
DIA (DJ Industrials)	97.06	-2.49%	163.65%	7	down	down	up
SPY (S&P 500)	103.56	-2.90%	69.28%	4	down	down	up
QQQQ (Nasdaq 100)	40.96	-2.68%	58.00%	3	down	down	up
IWM (Russell 2000)	56.33	-2.73%	125.60%	20	down	down	up
VXX (VIX Futures)	48.25	10.11%	140.58%	85	up	down	down
Major Sectors	Price	%Chg	Vol%	PMI	ST	MT	LT
XLY (Consumer Discrtn)	26.82	-2.61%	116.27%	8	down	down	up
XLP (Consumer Staples)	25.81	-1.64%	33.45%	2	down	up	up
XLE (Energy)	55.36	-3.60%	40.22%	18	down	up	up
XLF (Financials)	14.02	-4.88%	32.07%	8	down	down	up
XLV (Health Care)	28.07	-1.44%	17.22%	7	down	down	up
XLI (Industrials)	25.27	-3.48%	68.40%	0	down	down	up
XLB (Materials)	29.34	-3.58%	88.61%	20	down	down	up
XLK (Technology)	20.61	-2.65%	33.53%	4	down	up	up
IYZ (Telecom)	17.29	-2.70%	18.39%	12	down	down	up
XLU (Utilities)	28.39	-1.87%	94.84%	6	down	down	up
Key Industries	Price	%Chg	Vol%	PMI	ST	MT	LT
ITA (Aerospace & Defense)	45.06	-2.55%	-6.20%	0	down	down	up
BBH (Biotech)	90.40	-1.37%	86.88%	10	down	down	down
OIH (Oil Services)	117.06	-4.10%	75.05%	23	down	up	up
PPH (Pharmaceuticals)	61.03	-1.45%	47.60%	2	down	down	up
RKH (Regional Banks)	75.76	-4.66%	103.30%	10	down	down	up
RTH (Retail)	89.81	-2.34%	97.71%	1	down	up	up
SMH (Semiconductors)	24.19	-2.62%	4.24%	15	down	down	up
SWH (Software)	38.80	-1.82%	138.29%	14	down	up	up
SEA (Global Shipping)	12.37	-3.89%	32.25%	14	down	down	up
IYT (Transportation)	64.75	-2.35%	64.49%	20	down	down	up
International Equity ETFs
Americas	Price	%Chg	Vol%	PMI	ST	MT	LT
ISI (S&P 1500)	46.48	-2.92%	90.48%	0	down	down	up
EWC (MSCI Canada)	23.86	-3.20%	121.17%	29	down	down	up
EWW (MSCI Mexico)	43.61	-3.73%	20.97%	19	down	down	up
ILF (Latin America 40)	43.09	-4.58%	112.27%	16	down	up	up
EWZ( MSCI Brazil)	68.83	-4.48%	77.74%	19	down	up	up
Europe	Price	%Chg	Vol%	PMI	ST	MT	LT
EWU (MSCI United Kingdom)	15.50	-3.55%	-21.82%	5	down	up	up
EWG (MSCI Germany)	21.04	-4.58%	-19.88%	4	down	down	up
EWQ (MSCI France)	24.47	-4.64%	23.68%	1	down	down	up
RSX (Mkt Vectors Russia)	28.02	-6.16%	16.99%	27	down	up	up
VGK (Vanguard Europe)	48.35	-4.03%	54.63%	3	down	down	up
IEV (S&P Europe 350)	37.66	-3.58%	91.08%	7	down	down	up
Asian-Pacific	Price	%Chg	Vol%	PMI	ST	MT	LT
EWA (MSCI Australia)	21.93	-4.32%	57.82%	20	down	up	up
FXI (FTSE China)	41.70	-3.54%	77.86%	15	down	down	up
EWH (MSCI Hong Kong)	15.50	-1.96%	53.81%	11	down	up	up
IFN (India Fund)	28.04	-4.82%	177.44%	15	down	down	up
EWJ (MSCI Japan)	9.55	-1.24%	28.69%	33	down	down	up
EWS (MSCI Singapore)	10.49	-3.05%	53.10%	21	down	down	up
EWY (MSCI South Korea)	42.88	-4.63%	39.18%	16	down	down	up
EWT (MSCI Taiwan)	11.59	-3.17%	90.02%	39	down	down	up
IF (Indonesia Fund)	9.43	-1.57%	141.09%	58	down	down	up
EWM (MSCI Malaysia)	10.48	-2.33%	1.64%	9	down	up	up
VNM (Vietnam)	28.65	-4.05%	26.14%	24	down	n/a	n/a
Emerging Markets	Price	%Chg	Vol%	PMI	ST	MT	LT
EEM (MSCI Emerging Mkts)	37.56	-4.69%	189.05%	13	down	down	up
GMF (Emerging Asia Pacific)	66.58	-4.20%	112.30%	0	down	down	up
GUR (Emerging Europe)	40.22	-6.18%	210.01%	19	down	up	up
GML (Emerging Latin America)	70.98	-4.20%	30.43%	14	down	up	up
GAF (Middle East & Africa)	57.99	-3.35%	301.10%	49	down	down	up
EWX (Emerging Small Caps)	42.43	-4.22%	-32.11%	2	down	down	up
Alternative Assets
Commodities	Price	%Chg	Vol%	PMI	ST	MT	LT
GLD (Gold)	102.50	-0.18%	-1.26%	86	down	up	up
SLV (Silver)	16.10	-1.89%	8.61%	55	down	up	up
DBB (Base Metals)	19.52	-3.13%	-26.92%	9	down	up	up
JJC (Copper)	40.74	-2.84%	-50.69%	10	up	up	up
USO (Oil)	39.31	-3.89%	-13.94%	2	down	up	up
UNG (Natural Gas)	10.27	-1.72%	-36.10%	25	down	down	down
UGA (Gasoline)	35.91	-3.18%	-43.52%	25	down	up	up
CRBQ (Global Commodities)	38.77	-4.15%	-31.45%	24	down	n/a	n/a
DBC (Commodities)	23.58	-2.54%	18.04%	10	down	up	up
JJG (Grains)	38.00	-2.66%	53.35%	0	down	up	down
DBA (Agriculture)	25.57	-1.94%	-12.66%	7	down	up	up
Forex	Price	%Chg	Vol%	PMI	ST	MT	LT
UUP (U.S. Dollar)	22.70	0.58%	93.07%	100	up	down	down
FXE (Euro)	147.03	-0.76%	56.09%	7	down	up	up
FXY (Japanese Yen)	110.34	1.60%	16.09%	94	up	up	up
FXF (Swiss Franc)	97.16	-0.62%	22.04%	40	down	up	up
FXB (British Pound)	163.89	-0.63%	48.40%	6	up	up	up
FXC (Canadian Dollar)	92.21	-1.38%	90.94%	32	down	up	up
FXA (Australian Dollar)	90.21	-1.70%	22.46%	17	down	up	up
FXM (Mexican Peso)	75.99	-1.02%	47.27%	14	down	up	up
BZF (Brazilian Real)	26.23	-1.87%	31.62%	24	down	up	up
CYB (Chinese Yuan)	25.30	-0.04%	-19.73%	67	lateral	lateral	lateral
ICN (Indian Rupee)	24.58	-0.85%	656.03%	15	down	up	up
XRU (Russian Ruble)	34.61	1.05%	-70.00%	61	down	up	n/a
CEW (Emerging Currency)	21.68	-0.91%	-31.47%	13	down	up	up
Bonds	Price	%Chg	Vol%	PMI	ST	MT	LT
SHY (1-3 Yr Tsy)	84.02	0.12%	5.65%	64	up	up	up
IEF (7-10 Yr Tsy)	91.95	0.70%	0.51%	89	up	up	down
TLT (20 Yr+ Tsy)	95.78	1.45%	30.30%	80	up	down	down
TIP (Tsy Inflation Protect)	104.09	0.44%	41.95%	79	up	up	up
AGG (Investment Grade)	104.81	0.38%	-8.33%	90	up	up	up
MBB (Mortgage Bonds)	107.26	0.26%	9.05%	83	up	up	up
JNK (Hi Yld Bonds)	37.99	-0.52%	37.81%	62	down	up	up
HYG (Hi Yld Corp)	85.19	-0.93%	89.20%	24	down	up	up
WIP (Int’l Inflation Protect)	56.66	-0.58%	-25.81%	19	down	up	up
EMB (Emerging Markets Bonds)	102.02	0.53%	17.13%	91	down	up	up
MUB (Nat’l Muni Bond)	102.74	-0.11%	-19.01%	56	up	up	up
Real Estate	Price	%Chg	Vol%	PMI	ST	MT	LT
IYR (DJ US Real Estate)	40.50	-2.03%	80.29%	53	down	down	up
ICF (Cohen & Steers)	46.24	-1.93%	76.46%	56	down	down	up
XHB (Homebuilders)	13.82	-3.56%	21.63%	17	down	down	up
ITB (Home Construction)	11.16	-2.96%	18.96%	21	down	down	up
FIO (Industrial Office)	20.93	-1.08%	90.50%	82	down	down	up
REM (Mortgage Reits)	14.22	-1.97%	-30.50%	26	down	down	up
REZ (Residential Index)	27.43	-1.76%	-70.04%	49	down	up	up
RTL (Retail Index)	19.18	-2.69%	321.66%	42	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: 10-30-2009

Market Momentum	20-Day MA	50-Day MA	200-Day MA
Today	15.03%	32.29%	84.44%
Yesterday	26.07%	48.81%	87.04%
Last Week	50.72%	68.02%	89.67%
Last Month	35.16%	62.98%	88.89%

Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

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

[Aquater:]

Excellent analysis and a wealth of data to digest for investment purposes. Data is systematically organized and presented in comparable way. Synoptic coverage is highly remarkable, to say the least. Nary an aspect of investment world is left untreated.
The next question: Can this data be available on historical basis so one can see how an investment instrument has moved, and from which position, to where it is currently?
Any way, the author needs to be commended and congratulated on achieving a thorough, comprehensive and highly useful analytical presentation of current investment data.

Nov 01 11:51 AM

[J Clinton Hill:]

thank you...

yes, this data is available on a historical basis in database formatted reports, but is reserved for premium research reports, special studies, and consultative retainers...

hillbent uses proprietary indicators & models for tracking the flow of capital markets trends and correlation analysis between key asset classes, industries, and sectors which are mimicked or represented by various liquid indices, exchange traded funds, and individual stocks trading on U.S. exchanges...

glad you enjoyed the report and found it useful...

have a great week...


On Nov 01 11:51 AM Aquater wrote:

> Excellent analysis and a wealth of data to digest for investment
> purposes. Data is systematically organized and presented in comparable
> way. Synoptic coverage is highly remarkable, to say the least.
> Nary an aspect of investment world is left untreated.
> The next question: Can this data be available on historical basis
> so one can see how an investment instrument has moved, and from which
> position, to where it is currently?
> Any way, the author needs to be commended and congratulated on achieving
> a thorough, comprehensive and highly useful analytical presentation
> of current investment data.

Nov 01 12:48 PM