ETF Market Trends: Major Equity Indexes Correction Winds Down

ETF Market Direction Summary: 11-05-2009

From the opening on Thursday, major U.S. equity indexes started the day on positive momentum and continually added to their intraday gains to close above the 90th percentile of their daily trading range.The DIA, SPY, and QQQQ have ended their corrections and re-established their support levels at the 20, 50, and 200 day moving averages. The only exception is the small-cap IWM which remains in both short and intermediate downtrends. However, the IWM did manage to participate in attaining a new 5 day high along with the other major equity indices.

Bullish events driving Thurday’s stock prices were the following:

1. Both Productivity and Labor cost came in positive for 3Q2009. Nonfarm productivity surged to 9.5% vs. consensus expectations @ 6.5%. Such unprecedented high levels lead many economists and strategists to believe that worker productivity has reached a peak and therefore new hires will be necessary to increase production.
2. Unit labor cost also decreased by a surprising -5.2% vs. consensus expectations @ -3.9%. As higher labor costs tend to accompany higher inflation, this number justifies yesterday’s Fed decision to keep interest rates near zero as long as unemployment remains high and inflation stays in check. This is all fine and dandy, but the destruction of the dollar due to monetary policy is being ignored. What does the Fed know that we do not to allow it to continue so complacently upon this wreckless path? Perhaps Rober Precter has the answer, which lies in the fact that most debt is dominated in U.S. dollars and when the time comes to pay the piper, the world will have to dance to the notes of Benjamins. If you have time, I recommend listening to Prechter’s video interview with Aaron Task. It is the mother of all contrarian theses:
3. Jobless Claims for the week of 10/31/2009 registered 512k vs. consensus expectations at 523k. Anything to get this unemployment monster down will be welcome news by the market. By the way, Continuing Claims contracted 68k to 5.866mm for a 7th consecutive decline. In all fairness, the BLS will only track the unemployed for so long and then they are deleted from the list. Unemployment remains high at 9.8%, but at least initial claims appear to be falling.
4. Monster.com’s U.S. Employment Index edged up higher for the month of October to 120 vs. last month’s 119 to indicate a slight increase in job demand.
5. On the earnings front, tech giant, Cisco (CSCO) reported better than expected earnings as profits and sales declined. However, in Thursday’s conference call, CEO John Chambers emphasized signs of an inflection point and global economic recovery, and issued positive upside guidance.

Bearish events driving the markets:

1. N/A

The market conditon has improved substantially and may be en route to passing the tests of previous support levels. Trends have improved significantly for both domestic and international equities. Also worthy of mention is the U.S. dollar exchange traded fund (UUP) which has moved up 1.91% based upon the issuance of another 100mm shares due to bullish demand.

About the only thing that could derail the market now is Friday’s employment situation report which anticipates a -175k drop in nonfarm payrolls.

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

ETF New 5 Day Highs & Lows

ETF 5 Day New Highs: U.S. Equities (DIA, SPY, QQQQ, IWM, XLV, XLK, XLI, XLY, XLB, ITA, IHI, SWH, IGN, PPH, BBH ); International Equities (EWW, EWZ, ILF, ISI, EWQ, EWU, IEV, RSX, VGK, IFN, EWM, EWT, FXI, IF, EEM, EWX, GMF, GML); Commodities (CRBQ); Forex (FXB, UUP, CEW, BZF); Bonds (WIP); Real Estate (XHB, ITB). (Note * denotes 250 day new high)

ETF 5 Day New Lows: U.S. Equities (XLP, RTH); Commodities (UNG); Forex (UUP, FXM); Bonds (TLT, AGG). (Note * denotes 250 day new low)

ETF Market Trends™ Monitor (11-05-2009)

U.S. Equity ETFs
Equity Indexes	Price	%Chg	Vol%	PMI	ST	MT	LT
DIA (DJ Industrials)	100.16	2.03%	-18.60%	95	up	up	up
SPY (S&P 500)	106.85	1.84%	-7.90%	98	up	up	up
QQQQ (Nasdaq 100)	42.35	2.47%	24.70%	92	up	up	up
IWM (Russell 2000)	58.04	3.18%	37.30%	91	down	down	up
VXX (VIX Futures)	45.81	-5.27%	34.60%	2	up	down	down
Major Sectors	Price	%Chg	Vol%	PMI	ST	MT	LT
XLY (Consumer Discrtn)	27.85	2.73%	27.10%	93	up	up	up
XLP (Consumer Staples)	26.13	0.46%	122.70%	92	up	up	up
XLE (Energy)	57.23	1.71%	-9.10%	84	down	up	up
XLF (Financials)	14.37	2.57%	-7.50%	94	down	down	up
XLV (Health Care)	29.03	1.65%	15.30%	81	up	up	up
XLI (Industrials)	26.62	2.50%	23.70%	97	up	up	up
XLB (Materials)	30.43	1.77%	-3.40%	67	down	down	up
XLK (Technology)	21.21	2.12%	-20.10%	77	up	up	up
IYZ (Telecom)	17.61	1.32%	0.70%	56	down	down	up
XLU (Utilities)	28.95	1.69%	3.70%	91	down	down	up
Key Industries	Price	%Chg	Vol%	PMI	ST	MT	LT
ITA (Aerospace & Defense)	47.06	3.18%	-55.00%	97	up	up	up
BBH (Biotech)	94.29	3.42%	-3.10%	89	up	down	down
OIH (Oil Services)	121.75	2.04%	-30.30%	84	down	up	up
PPH (Pharmaceuticals)	62.61	0.92%	-70.50%	49	up	down	up
RKH (Regional Banks)	77.74	3.25%	16.10%	98	down	down	up
RTH (Retail)	91.43	0.53%	17.10%	96	up	up	up
SMH (Semiconductors)	24.57	2.37%	23.40%	67	down	down	up
SWH (Software)	39.78	2.05%	-24.30%	80	up	up	up
SEA (Global Shipping)	12.68	1.68%	-61.20%	81	down	down	up
IYT (Transportation)	68.17	2.23%	-25.60%	100	up	down	up
International Equity ETFs
Americas	Price	%Chg	Vol%	PMI	ST	MT	LT
ISI (S&P 1500)	47.92	2.07%	-46.00%	97	up	UP	up
EWC (MSCI Canada)	24.95	1.26%	18.60%	100	down	up	up
EWW (MSCI Mexico)	45.34	1.41%	-19.20%	95	down	up	up
ILF (Latin America 40)	46.25	2.71%	-19.30%	96	up	up	up
EWZ( MSCI Brazil)	74.68	2.91%	-2.40%	99	up	up	up
Europe	Price	%Chg	Vol%	PMI	ST	MT	LT
EWU (MSCI United Kingdom)	16.09	1.71%	-13.90%	59	up	up	up
EWG (MSCI Germany)	21.70	1.73%	-72.10%	40	down	up	up
EWQ (MSCI France)	25.64	1.99%	-13.90%	50	down	up	up
RSX (Mkt Vectors Russia)	29.41	1.73%	-23.40%	93	down	up	up
VGK (Vanguard Europe)	50.26	1.82%	-11.00%	79	up	up	up
IEV (S&P Europe 350)	38.85	1.73%	-32.10%	69	down	up	up
Asian-Pacific	Price	%Chg	Vol%	PMI	ST	MT	LT
EWA (MSCI Australia)	22.53	0.99%	6.40%	71	down	up	up
FXI (FTSE China)	44.21	2.36%	-13.20%	100	up	up	up
EWH (MSCI Hong Kong)	15.85	0.83%	-44.20%	89	down	up	up
IFN (India Fund)	29.75	5.20%	-48.60%	100	up	up	up
EWJ (MSCI Japan)	9.68	0.73%	-35.30%	67	down	down	up
EWS (MSCI Singapore)	10.81	1.22%	-37.30%	85	up	up	up
EWY (MSCI South Korea)	44.23	0.27%	-35.30%	92	down	down	up
EWT (MSCI Taiwan)	12.11	1.34%	-29.10%	87	up	up	up
IF (Indonesia Fund)	9.68	1.01%	-67.30%	69	down	up	up
EWM (MSCI Malaysia)	10.83	1.12%	20.40%	54	up	up	up
VNM (Vietnam)	28.94	3.80%	-2.70%	100	down	n/a	n/a
Emerging Markets	Price	%Chg	Vol%	PMI	ST	MT	LT
EEM (MSCI Emerging Mkts)	39.70	2.06%	3.30%	99	up	up	up
GMF (Emerging Asia Pacific)	70.43	1.06%	-68.90%	54	up	up	up
GUR (Emerging Europe)	41.92	2.72%	-55.10%	93	down	up	up
GML (Emerging Latin America)	75.62	2.16%	-26.90%	84	up	up	up
GAF (Middle East & Africa)	57.77	-0.47%	-36.60%	0	down	down	up
EWX (Emerging Small Caps)	45.18	2.08%	52.20%	75	up	up	up
Alternative Assets
Commodities	Price	%Chg	Vol%	PMI	ST	MT	LT
GLD (Gold)	106.97	-0.12%	-19.10%	62	up	up	up
SLV (Silver)	17.11	-0.18%	-18.40%	38	up	up	up
DBB (Base Metals)	19.95	-0.05%	-70.90%	96	down	up	up
JJC (Copper)	41.04	-0.27%	-58.90%	65	down	up	up
USO (Oil)	40.80	-0.46%	-42.30%	43	up	up	up
UNG (Natural Gas)	9.85	0.72%	-15.90%	58	down	down	down
UGA (Gasoline)	36.46	-0.79%	-41.30%	22	down	up	up
CRBQ (Global Commodities)	40.60	1.75%	-72.30%	78	up	n/a	n/a
DBC (Commodities)	24.19	-0.53%	-9.50%	16	down	up	up
JJG (Grains)	38.76	-1.80%	56.20%	12	down	up	down
DBA (Agriculture)	25.94	-1.11%	-34.90%	15	down	up	up
Forex	Price	%Chg	Vol%	PMI	ST	MT	LT
UUP (U.S. Dollar)	22.52	0.04%	594.00%	10	up	up	down
FXE (Euro)	148.58	0.06%	-4.80%	56	up	up	up
FXY (Japanese Yen)	109.41	-0.22%	-83.90%	8	up	up	up
FXF (Swiss Franc)	97.93	-0.12%	-54.10%	21	up	up	up
FXB (British Pound)	165.46	0.12%	-18.70%	58	up	up	up
FXC (Canadian Dollar)	93.55	-0.21%	-29.00%	15	down	up	up
FXA (Australian Dollar)	91.07	0.08%	-28.60%	59	down	up	up
FXM (Mexican Peso)	75.18	-0.48%	167.20%	44	down	down	up
BZF (Brazilian Real)	27.00	0.60%	-49.40%	83	up	up	up
CYB (Chinese Yuan)	25.30	-0.04%	27.80%	33	lateral	lateral	lateral
ICN (Indian Rupee)	24.90	-0.32%	210.80%	67	down	up	up
XRU (Russian Ruble)	35.03	0.95%	1793.80%	37	up	up	n/a
CEW (Emerging Currency)	21.88	-0.09%	100.00%	27	up	up	up
Bonds	Price	%Chg	Vol%	PMI	ST	MT	LT
SHY (1-3 Yr Tsy)	83.90	0.10%	-10.70%	86	up	up	down
IEF (7-10 Yr Tsy)	90.50	-0.02%	-73.80%	68	down	down	down
TLT (20 Yr+ Tsy)	93.18	-0.06%	-27.00%	86	down	down	down
TIP (Tsy Inflation Protect)	104.06	0.19%	-7.20%	61	up	up	up
AGG (Investment Grade)	104.31	0.29%	51.00%	97	down	up	up
MBB (Mortgage Bonds)	106.86	0.07%	-52.80%	84	up	up	up
JNK (Hi Yld Bonds)	37.75	0.08%	-33.70%	54	down	up	up
HYG (Hi Yld Corp)	85.53	0.08%	-33.00%	69	down	up	up
BWX (Int’l Tsy Bonds)	58.63	0.24%	-32.20%	60	up	up	up
WIP (Int’l Inflation Protect)	57.25	0.93%	232.00%	91	up	up	up
EMB (Emerging Markets Bonds)	101.30	0.32%	9.30%	100	down	up	up
MUB (Nat’l Muni Bond)	102.13	-0.07%	7.80%	7	down	down	up
Real Estate	Price	%Chg	Vol%	PMI	ST	MT	LT
IYR (DJ US Real Estate)	41.29	2.08%	-11.70%	91	down	down	up
ICF (Cohen & Steers)	47.04	1.97%	-24.20%	87	up	up	up
XHB (Homebuilders)	14.44	2.41%	17.40%	59	down	down	up
ITB (Home Construction)	11.63	1.93%	-22.40%	55	down	down	up
FIO (Industrial Office)	20.99	-1.80%	45.20%	67	down	down	up
REM (Mortgage Reits)	14.23	1.72%	-66.90%	96	down	down	up
REZ (Residential Index)	27.84	1.20%	-48.30%	97	up	up	up
RTL (Retail Index)	19.06	-2.52%	68.20%	29	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): 11-05-2009

Market Momentum	20-Day MA	50-Day MA	200-Day MA
Today	33.76%	47.77%	86.16%
Yesterday	20.29%	36.32%	83.81%
Last Week	26.21%	48.78%	86.98%
Last Month	65.22%	77.79%	91.09%

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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