ETF Market Trends: Market Responds to Fed with Volatility

ETF Market Direction Summary: 11-04-2009

Wednesday’s comments will be brief. As expected, the Fed Reserve left interest rates unchanged and reiterated its policy to keep interest rates near zero. It also emphasized for the first time that rates will remain near zero if inflation expectations are stable and unemployment remains high. The market responded with volatility and ceded most of its gains and the U.S. dollar weakened as well.

In other economic news, the ADP Employment report showed payrolls declined slightly more than consensus expectations and the ISM expanded but also missed expectations. The next major economic news awaiting the market will be Thursday’s Jobless Claims and Productivity & Costs.

Financial stocks represented the day’s weakest sector in reaction to Congress passing a regulatory bill to limit credit card rates. Meredith Whitney, a widely followed analyst for her accuracy, did not help the industry’s cause either as she commented that large U.S. banks may be exposed to the risks of declining values in home loan bonds once the Fed completes the purchase of its $1.25 trillion mortgage buying program.

Equity trends, along with market momentum, are improving slightly and attempting to consolidate. The DIA and SPY are trying to establish support levels at higher lows. The QQQQ is attempting to reconfirm support at its October low while the IWM appears to be making a bottom at a level comparable to its September low.

With near term trends being down, it is still best to avoid initiating any new long positions while waiting for the market to either complete or resume its correction. Patience will be rewarded while principle is being preserved.

Please refer to the trend tables below for any changes and keep Hillbent for the Market Direction and ETF Market Trends™…

ETF New 5 Day Highs & Lows

ETF 5 Day New Highs: U.S. Equities (XLI, XLV, IYT, PPH); International Equities (EWC, EWZ, ILF, EWT, FXI, IF, EWM, GML, EWX, GMF); Commodities (USO, CRBQ, DBA, SLV, GLD*, DBC, JJG); Forex (FXC, FXF, CEW, FXE, BZF, XRU); Bonds (BWX); Real Estate (XHB, IYR, ICF, ITB, FIO, REZ, RTL). (Note * denotes 250 day new high)

ETF 5 Day New Lows: Commodities (UNG); Forex (UUP); Bonds (IEF, SHY, MBB, TLT, AGG). (Note * denotes 250 day new low)

ETF Market Trends™ Monitor (11-04-2009)

U.S. Equity ETFs
Equity Indexes	Price	%Chg	Vol%	PMI	ST	MT	LT
DIA (DJ Industrials)	98.17	0.38%	21,7%	16	down	up	up
SPY (S&P 500)	104.92	0.26%	26.40%	16	down	down	up
QQQQ (Nasdaq 100)	41.33	0.17%	-0.30%	8	down	down	up
IWM (Russell 2000)	56.25	-1.44%	89.60%	0	down	down	up
VXX (VIX Futures)	48.36	-0.82%	46.50%	81	up	down	down
Major Sectors	Price	%Chg	Vol%	PMI	ST	MT	LT
XLY (Consumer Discrtn)	27.11	0.04%	46.70%	15	down	up	up
XLP (Consumer Staples)	26.01	0.39%	52.00%	23	down	up	up
XLE (Energy)	56.27	-0.09%	27.30%	11	down	up	up
XLF (Financials)	14.01	-1.39%	12.60%	4	down	down	up
XLV (Health Care)	28.56	1.28%	42.40%	47	down	down	up
XLI (Industrials)	25.97	-0.19%	9.40%	10	down	down	up
XLB (Materials)	29.90	0.00%	21.60%	14	down	down	up
XLK (Technology)	20.77	0.58%	-5.80%	11	down	up	up
IYZ (Telecom)	17.38	-0.17%	-48.70%	4	down	down	up
XLU (Utilities)	28.47	0.67%	27.10%	23	down	down	up
Key Industries	Price	%Chg	Vol%	PMI	ST	MT	LT
ITA (Aerospace & Defense)	45.61	0.42%	-9.10%	21	down	down	up
BBH (Biotech)	91.17	-0.56%	-15.20%	12	down	down	down
OIH (Oil Services)	119.33	-1.26%	11.60%	3	down	up	up
PPH (Pharmaceuticals)	62.04	1.81%	176.10%	59	down	down	up
RKH (Regional Banks)	75.29	-1.89%	-11.80%	6	down	down	up
RTH (Retail)	90.95	0.62%	13.70%	34	down	up	up
SMH (Semiconductors)	24.00	0.60%	37.30%	9	down	down	up
SWH (Software)	38.98	0.54%	-74.00%	33	down	up	up
SEA (Global Shipping)	12.47	0.40%	-39.60%	30	down	down	up
IYT (Transportation)	66.68	-1.52%	43.50%	1	down	down	up
International Equity ETFs
Americas	Price	%Chg	Vol%	PMI	ST	MT	LT
ISI (S&P 1500)	46.95	0.09%	18.80%	5	down	down	up
EWC (MSCI Canada)	24.64	0.74%	36.70%	2	down	down	up
EWW (MSCI Mexico)	44.71	1.80%	11.80%	33	down	up	up
ILF (Latin America 40)	45.03	1.62%	1.30%	17	down	up	up
EWZ( MSCI Brazil)	72.57	2.19%	29.60%	61	up	up	up
Europe	Price	%Chg	Vol%	PMI	ST	MT	LT
EWU (MSCI United Kingdom)	15.82	0.32%	-31.40%	0	down	up	up
EWG (MSCI Germany)	21.33	1.28%	14.00%	16	down	down	up
EWQ (MSCI France)	25.14	1.82%	9.30%	6	down	down	up
RSX (Mkt Vectors Russia)	28.91	2.12%	32.80%	28	down	up	up
VGK (Vanguard Europe)	49.36	1.58%	21.00%	29	down	up	up
IEV (S&P Europe 350)	38.19	1.43%	-16.40%	23	down	up	up
Asian-Pacific	Price	%Chg	Vol%	PMI	ST	MT	LT
EWA (MSCI Australia)	22.31	0.81%	46.30%	15	down	up	up
FXI (FTSE China)	43.19	1.50%	23.00%	13	down	up	up
EWH (MSCI Hong Kong)	15.72	0.58%	-20.20%	24	down	up	up
IFN (India Fund)	28.28	2.50%	-28.40%	46	down	down	up
EWJ (MSCI Japan)	9.61	-0.21%	-7.70%	18	down	down	up
EWS (MSCI Singapore)	10.68	0.28%	-21.90%	6	down	up	up
EWY (MSCI South Korea)	44.11	2.77%	26.70%	36	down	down	up
EWT (MSCI Taiwan)	11.95	2.31%	-8.70%	25	down	up	up
IF (Indonesia Fund)	9.58	2.16%	-47.40%	67	down	up	up
EWM (MSCI Malaysia)	10.71	0.37%	-11.00%	17	down	up	up
VNM (Vietnam)	27.88	1.27%	-2.90%	30	down	n/a	n/a
Emerging Markets	Price	%Chg	Vol%	PMI	ST	MT	LT
EEM (MSCI Emerging Mkts)	38.90	1.86%	31.00%	35	down	up	up
GMF (Emerging Asia Pacific)	69.69	3.17%	9.90%	43	down	up	up
GUR (Emerging Europe)	40.81	2.00%	133.80%	5	down	up	up
GML (Emerging Latin America)	74.02	1.51%	10.60%	30	down	up	up
GAF (Middle East & Africa)	58.04	0.99%	-59.30%	0	down	down	up
EWX (Emerging Small Caps)	44.26	1.21%	57.70%	5	down	up	up
Alternative Assets
Commodities	Price	%Chg	Vol%	PMI	ST	MT	LT
GLD (Gold)	107.10	0.60%	115.40%	54	up	up	up
SLV (Silver)	17.14	0.82%	114.30%	39	up	up	up
DBB (Base Metals)	19.96	0.76%	51.20%	38	up	up	up
JJC (Copper)	41.15	0.12%	10.50%	9	down	up	up
USO (Oil)	40.99	0.91%	14.30%	44	up	up	up
UNG (Natural Gas)	9.78	-2.78%	-34.00%	20	down	down	down
UGA (Gasoline)	36.75	0.46%	-54.50%	41	down	up	up
CRBQ (Global Commodities)	39.90	0.78%	-51.90%	0	down	n/a	n/a
DBC (Commodities)	24.32	-0.08%	62.60%	12	up	up	up
JJG (Grains)	39.47	-1.00%	74.10%	2	up	up	up
DBA (Agriculture)	26.23	-0.46%	-22.30%	5	up	up	up
Forex	Price	%Chg	Vol%	PMI	ST	MT	LT
UUP (U.S. Dollar)	22.51	-0.75%	510.80%	43	up	down	down
FXE (Euro)	148.49	1.06%	99.50%	63	down	up	up
FXY (Japanese Yen)	109.65	-0.25%	-64.00%	100	up	up	up
FXF (Swiss Franc)	98.05	1.08%	-28.10%	61	down	up	up
FXB (British Pound)	165.26	0.93%	10.00%	82	down	up	up
FXC (Canadian Dollar)	93.75	0.41%	-3.30%	41	down	up	up
FXA (Australian Dollar)	91.00	0.80%	48.80%	38	down	up	up
FXM (Mexican Peso)	75.54	0.19%	-17.30%	95	down	down	up
BZF (Brazilian Real)	26.84	1.24%	12.10%	56	down	up	up
CYB (Chinese Yuan)	25.31	0.04%	199.50%	67	lateral	lateral	lateral
ICN (Indian Rupee)	24.98	0.64%	-6.10%	86	down	up	up
XRU (Russian Ruble)	34.70	1.52%	99.30%	38	down	up	n/a
CEW (Emerging Currency)	21.90	0.95%	185.50%	83	down	up	up
Bonds	Price	%Chg	Vol%	PMI	ST	MT	LT
SHY (1-3 Yr Tsy)	83.82	-0.01%	-21.40%	60	down	down	down
IEF (7-10 Yr Tsy)	90.52	-0.28%	-11.90%	62	down	down	down
TLT (20 Yr+ Tsy)	93.24	-0.91%	36.00%	35	down	down	down
TIP (Tsy Inflation Protect)	103.86	0.19%	9.10%	79	down	up	up
AGG (Investment Grade)	104.01	-0.16%	-16.90%	0	down	up	up
MBB (Mortgage Bonds)	106.79	0.09%	-35.30%	100	down	up	up
JNK (Hi Yld Bonds)	37.72	-0.19%	-21.70%	33	down	up	up
HYG (Hi Yld Corp)	85.46	0.15%	-9.90%	23	down	up	up
BWX (Int’l Tsy Bonds)	58.49	0.39%	-19.50%	28	down	up	up
WIP (Int’l Inflation Protect)	56.72	0.39%	14.40%	60	down	up	up
EMB (Emerging Markets Bonds)	100.98	0.29%	-20.90%	93	down	down	up
MUB (Nat’l Muni Bond)	102.20	-0.10%	-42.40%	35	down	down	up
Real Estate	Price	%Chg	Vol%	PMI	ST	MT	LT
IYR (DJ US Real Estate)	40.45	-1.80%	6.70%	6	down	down	up
ICF (Cohen & Steers)	46.13	-2.04%	60.20%	5	down	up	up
XHB (Homebuilders)	14.10	0.02%	51.30%	11	down	down	up
ITB (Home Construction)	11.41	0.97%	45.00%	15	down	down	up
FIO (Industrial Office)	21.38	1.93%	-93.80%	100	down	down	up
REM (Mortgage Reits)	13.99	-1.69%	-83.70%	0	down	down	up
REZ (Residential Index)	27.51	-0.70%	-86.20%	3	down	up	up
RTL (Retail Index)	19.55	1.21%	-64.40%	58	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): 11-04-2009

Market Momentum	20-Day MA	50-Day MA	200-Day MA
Today	20.22%	36.22%	83.81%
Yesterday	19.50%	35.70%	84.69%
Last Week	17.25%	37.15%	85.51%
Last Month	58.28%	75.66%	90.50%

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

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