ETF Market Trends: Correction Mode Persists Despite Bullish Economic Data

ETF Market Direction Summary: 11-02-2009

In answer to last week’s worry over a sustainable economic recovery, Monday’s key economic data points served as bullish catalysts for the day’s positive trading session:

1. October’s ISM Manufacturing report jumped to 55.7 vs. consensus estimates at 53.0 and previous month at 52.6
2. Construction Spending in September rose 0.8% vs. consensus estimates at -0.2%
3. Pending Home Sales increased September by 6.1% m/m
4. Positive earnings surprises from Ford (F) and Humana (HUM)
5. Carryover momentum from China’s positive PMI report confirming expansion in manufacturing and exports

Casting a shadow over the market, but failing to sustain sellers, were the following bearish events:

1. CIT’s filing for bankruptcy
2. Jon Greenlee, Fed Reserve Associate Director/Division of Banking Supervision and Regulation issued statements that conditions for the banking industry remain far from robust and continue to deteriorate as weakness in housing is impacting residential and construction loans.

Market momentum has ceased its downward trajectory for now and a few equity sectors and industries are valiantly fighting to maintain intermediate uptrend support levels. However, stocks still remain in correction mode, so those waiting to deploy fresh capital may want to remain neutral until it ends while existing longs should focus on risk management and/or hedging if necessary.

Please refer to the trend tables below for more specific guidance and remain Hillbent for the Market Direction and ETF Market Trends™…

ETF New 5 Day Highs & Lows

ETF 5 Day New Highs: U.S. Equities (VXX); International Equities (EWJ); Commodities (GLD, JJG); Forex (CYB, ICN, FXF); Bonds (BWX). (Note * denotes 250 day new high)

ETF 5 Day New Lows: U.S. Equities (DIA, SPY, QQQQ, IWM, XLF, XLE, XLI, IYZ, XLK, XLU, XLB, XLY, IAK, IAI, OIH, SMH, ITA, IHI, SEA, RTH, IYT, SWH, IGN); International Equities (EWC, ISI, VGK, IEV, EWG, VNM, IFN, EWY, GAF); Commodities (DBB, USO, JJC, UNG); Forex (BZF); Bonds (MUB, JNK, HYG); Real Estate (ITB, IYR, XHB, RTL, REM, REZ). (Note * denotes 250 day new low)

ETF Market Trends™ Monitor (11-02-2009)

U.S. Equity ETFs
Equity Indexes	Price	%Chg	Vol%	PMI	ST	MT	LT
DIA (DJ Industrials)	97.85	0.81%	72.58%	47	down	up	up
SPY (S&P 500)	104.34	0.75%	28.48%	54	down	down	up
QQQQ (Nasdaq 100)	41.13	0.42%	35.03%	53	down	down	up
IWM (Russell 2000)	56.26	-0.12%	80.94%	51	down	down	up
VXX (VIX Futures)	48.72	1.04%	78.67%	67	up	down	down
Major Sectors	Price	%Chg	Vol%	PMI	ST	MT	LT
XLY (Consumer Discrtn)	27.05	0.86%	76.80%	60	down	up	up
XLP (Consumer Staples)	26.08	0.97%	47.03%	86	down	up	up
XLE (Energy)	55.60	0.63%	35.58%	49	down	up	up
XLF (Financials)	14.16	0.78%	61.43%	60	down	down	up
XLV (Health Care)	28.19	0.43%	17.89%	41	down	down	up
XLI (Industrials)	25.58	1.15%	68.91%	64	down	down	up
XLB (Materials)	29.60	0.89%	60.61%	55	down	down	up
XLK (Technology)	20.71	0.49%	93.67%	60	down	up	up
IYZ (Telecom)	17.30	-0.23%	130.80%	58	down	down	up
XLU (Utilities)	28.32	-0.25%	16.88%	37	down	down	up
Key Industries	Price	%Chg	Vol%	PMI	ST	MT	LT
ITA (Aerospace & Defense)	45.46	0.89%	41.76%	75	down	down	up
BBH (Biotech)	90.23	-0.23%	10.41%	33	down	down	down
OIH (Oil Services)	117.84	0.67%	28.06%	50	down	up	up
PPH (Pharmaceuticals)	61.38	0.51%	-56.64%	39	down	down	up
RKH (Regional Banks)	76.98	1.62%	28.90%	63	down	down	up
RTH (Retail)	90.78	1.09%	9.10%	65	down	up	up
SMH (Semiconductors)	24.17	-0.05%	-14.69%	53	down	down	up
SWH (Software)	38.66	-0.05%	-25.12%	40	down	down	up
SEA (Global Shipping)	12.16	-1.86%	50.50%	19	down	down	up
IYT (Transportation)	64.36	-0.54%	60.38%	47	down	down	up
International Equity ETFs
Americas	Price	%Chg	Vol%	PMI	ST	MT	LT
ISI (S&P 1500)	46.80	0.69%	22.64%	55	down	down	up
EWC (MSCI Canada)	23.95	0.42%	31.32%	49	down	down	up
EWW (MSCI Mexico)	44.12	1.19%	26.04%	48	down	down	up
ILF (Latin America 40)	43.61	1.25%	105.20%	47	down	up	up
EWZ( MSCI Brazil)	69.59	1.11%	-8.14%	53	down	up	up
Europe	Price	%Chg	Vol%	PMI	ST	MT	LT
EWU (MSCI United Kingdom)	15.67	1.16%	-9.30%	51	down	up	up
EWG (MSCI Germany)	21.17	0.81%	-42.37%	42	down	down	up
EWQ (MSCI France)	24.78	1.14%	-8.05%	38	down	down	up
RSX (Mkt Vectors Russia)	28.70	2.43%	110.95%	54	down	up	up
VGK (Vanguard Europe)	48.85	1.12%	37.92%	47	down	up	up
IEV (S&P Europe 350)	37.94	0.74%	24.30%	47	down	up	up
Asian-Pacific	Price	%Chg	Vol%	PMI	ST	MT	LT
EWA (MSCI Australia)	22.29	1.64%	53.38%	56	down	up	up
FXI (FTSE China)	42.72	2.45%	74.69%	54	down	up	up
EWH (MSCI Hong Kong)	15.64	0.71%	13.37%	45	down	up	up
IFN (India Fund)	28.19	0.53%	35.48%	51	down	down	up
EWJ (MSCI Japan)	9.64	0.94%	56.33%	47	down	down	up
EWS (MSCI Singapore)	10.63	1.43%	31.62%	43	down	up	up
EWY (MSCI South Korea)	43.13	0.58%	96.71%	45	down	down	up
EWT (MSCI Taiwan)	11.78	1.46%	-4.71%	68	down	up	up
IF (Indonesia Fund)	9.44	0.16%	10.81%	83	down	down	up
EWM (MSCI Malaysia)	10.63	1.33%	32.56%	70	down	up	up
VNM (Vietnam)	28.21	-1.16%	-22.98%	45	down	n/a	n/a
Emerging Markets	Price	%Chg	Vol%	PMI	ST	MT	LT
EEM (MSCI Emerging Mkts)	38.13	1.49%	67.93%	54	down	up	up
GMF (Emerging Asia Pacific)	67.80	1.83%	44.28%	35	down	down	up
GUR (Emerging Europe)	40.70	1.60%	97.42%	42	down	up	up
GML (Emerging Latin America)	70.76	-0.38%	142.27%	13	down	up	up
GAF (Middle East & Africa)	56.92	-1.85%	71.63%	34	down	down	up
EWX (Emerging Small Caps)	43.75	1.92%	1025.65%	85	down	up	up
Alternative Assets
Commodities	Price	%Chg	Vol%	PMI	ST	MT	LT
GLD (Gold)	103.93	1.37%	-0.12%	68	up	up	up
SLV (Silver)	16.16	0.56%	-3.74%	28	down	up	up
DBB (Base Metals)	19.83	1.59%	145.64%	88	up	up	up
JJC (Copper)	40.75	-0.15%	21.00%	59	down	up	up
USO (Oil)	39.97	1.65%	-25.16%	75	down	up	up
UNG (Natural Gas)	9.95	-3.12%	-23.13%	25	down	down	down
UGA (Gasoline)	36.45	1.76%	494.25%	79	down	up	up
CRBQ (Global Commodities)	39.00	0.41%	-57.34%	28	down	n/a	n/a
DBC (Commodities)	23.96	1.59%	2.79%	91	down	up	up
JJG (Grains)	39.18	3.11%	39.51%	77	up	up	up
DBA (Agriculture)	26.17	2.35%	-7.36%	89	down	up	up
Forex	Price	%Chg	Vol%	PMI	ST	MT	LT
UUP (U.S. Dollar)	22.65	-0.22%	60.72%	69	up	down	down
FXE (Euro)	147.52	0.34%	-20.56%	36	down	up	up
FXY (Japanese Yen)	109.89	-0.39%	-6.58%	48	up	up	up
FXF (Swiss Franc)	97.39	0.29%	55.60%	24	down	up	up
FXB (British Pound)	163.25	-0.35%	-62.18%	29	down	up	up
FXC (Canadian Dollar)	92.52	0.34%	8.11%	46	down	down	up
FXA (Australian Dollar)	90.21	0.21%	33.18%	25	down	up	up
FXM (Mexican Peso)	75.72	-0.05%	11.58%	34	down	down	up
BZF (Brazilian Real)	26.24	0.23%	-36.16%	84	down	up	up
CYB (Chinese Yuan)	25.30	0.04%	3.64%	50	lateral	lateral	lateral
ICN (Indian Rupee)	24.98	1.22%	37.59%	41	down	up	up
XRU (Russian Ruble)	34.18	-1.11%	60.00%	14	down	up	n/a
CEW (Emerging Currency)	21.65	-0.14%	-52.76%	6	down	up	up
Bonds	Price	%Chg	Vol%	PMI	ST	MT	LT
SHY (1-3 Yr Tsy)	83.83	-0.12%	58.67%	43	down	down	down
IEF (7-10 Yr Tsy)	91.02	-0.22%	14.52%	33	down	down	down
TLT (20 Yr+ Tsy)	95.14	-0.35%	-13.51%	44	down	down	down
TIP (Tsy Inflation Protect)	103.87	0.19%	-4.18%	70	up	up	up
AGG (Investment Grade)	104.32	-0.16%	84.14%	22	down	up	up
MBB (Mortgage Bonds)	106.67	-0.20%	-13.86%	n/a	down	up	up
JNK (Hi Yld Bonds)	37.73	0.31%	19.85%	49	down	up	up
HYG (Hi Yld Corp)	85.12	0.76%	78.51%	51	down	up	up
BWX (Int’l Tsy Bonds)	58.48	-0.03%	88.29%	41	down	up	up
WIP (Int’l Inflation Protect)	56.69	0.04%	19.91%	52	down	up	up
EMB (Emerging Markets Bonds)	101.06	-0.50%	-58.48%	39	down	up	up
MUB (Nat’l Muni Bond)	102.30	-0.13%	-9.03%	38	down	down	up
Real Estate	Price	%Chg	Vol%	PMI	ST	MT	LT
IYR (DJ US Real Estate)	40.61	0.15%	50.88%	56	down	down	up
ICF (Cohen & Steers)	46.43	0.41%	37.86%	57	down	down	up
XHB (Homebuilders)	13.83	0.29%	38.62%	49	down	down	up
ITB (Home Construction)	11.03	-0.99%	6.89%	39	down	down	up
FIO (Industrial Office)	21.08	0.81%	-42.86%	100	down	down	up
REM (Mortgage Reits)	14.04	-0.64%	286.47%	33	down	down	up
REZ (Residential Index)	27.04	-2.38%	31.00%	10	down	up	up
RTL (Retail Index)	18.76	-2.77%	-64.31%	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 (% Stocks > Moving Avg): 11-02-2009

Market Momentum	20-Day MA	50-Day MA	200-Day MA
Today	16.03%	32.68%	84.14%
Yesterday	14.99%	32.28%	84.42%
Last Week	39.41%	61.82%	88.59%
Last Month	45.34%	70.68%	89.82%

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

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

[Michael Clark:]

Ultrashort ETFs seem to be making a bottom here:

seekingalpha.com/insta...

The implication, of course, is that stocks are done for this rally.

Nov 03 07:19 AM