ETF Market Trends: Momentum May Be Taking an Early Pause

ETF Market Direction Summary: 11-10-2009

The most important observation about Tuesday’s session is the fact that the market was very stingy in giving back any of its 2% plus gains from Monday. Without major economic data or many earnings announcements, there were no strong catalysts to drive the market in a decisive direction. Bulls earned a well deserved day of rest after having pushed up the S&P 500 for the last 6 out of 7 trading days.

We must also appreciate that a few have been doing the work of many as volume has been rather light these days on the major averages. Thus far, price trends have been fairly consistent and sustainable with only periodic orderly corrections. Of course, this rhythm can and will eventually change, especially if uncertainty or the bears decide to return.

Bullish events impacting the market:

• Positive earnings surprises and/or guidance: Priceline (PCLN) exceeded consensus estimates for 3Q earnings; and Monsanto (MON) reconfirmed that it will double 2007 profits by 2012.
• Moody’s Rating Agency issued a statement that AIG could repay its credit line with the Federal Reserve and much or almost all of the Treasury’s investment if the financial markets stabilize.
• American Express (AXP) announced that world wide spending for its customers climbed 3% in October, thus giving a ray of hope to those betting on a consumer comeback.
• Fedex (FDX) expects shipments to rise by 8% on its busiest day during the holiday season.
• Dollar weakness is providing wind to the back of multi-national large cap companies that derive a significant portion of their revenues outside of the U.S.

Bearish events impacting the market:

• Negative earnings surprises and/or guidance: MBI; FLR, ERTS
• Analysts at Fitch project Britain being the next major economy to lose its AAA credit rating

The trends for equities are still bullish, but market momentum may be taking an early pause. The Dow Industrials have a slight problem, but then again, no one ever promised that being a leader would be easy. With the Industrials making 2 consecutive 52 week new highs, the Transports have yet to confirm this move by making its own new high.

Besides this, broader indexes like the S&P 500 and Nasdaq must still advance further to challenge their resistance levels at the October highs. Should either fail to break above their October high, the Dow, despite its high percentage of multi-national companies deriving 50% or more of sales from outside the U.S., will not be sufficient to sustain a broad market rally.

While the dollar is in the process of testing the support of its October lows, I would expect commodities to consolidate and await their next clue from the dollar. There is a legitimate concern for inflation, but right now this is not a reality as the weaker dollar remains the primary bullish catalyst for commodities. In precious metals, gold (GLD) continues to march higher, but silver (SLV) has made a new 5 day low.

Until tomorrow, keep 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, IYZ, XLB, XLE, XLF, XLI*, XLU, XLP*, XLU, XLV*, XLY*, BBH, IAI, IAK, IGN, IHI, ITA, IYT, OIH, RKH, RTH*, SMH, SWH); International Equities (EWC, EWW, ILF*, ISI, RSX, EWA, EWM*, IFN, EEM, EWX, GAF, GML, GUR); Commodities (CRBQ, GLD*); Forex (FXA, FXC, XRU); Bonds (AGG, BWX*, EMB, IEF, MBB, SHY, TIP*, TLT, WIP*); Real Estate (ICF, ITB, REM, REZ, XHB). (Note * denotes 250 day new high)

ETF 5 Day New Lows: U.S. Equities (VXX); International Equities (VNM); Commodities (DBA, SLV, UNG); Forex (UUP); Bonds (MUB). (Note * denotes 250 day new low)

ETF Market Trends™ Monitor (11-10-2009)

U.S. Equity ETFs
Equity Indexes	Price	%Chg	Vol%	PMI	ST	MT	LT
DIA (DJ Industrials)	102.69	0.26%	-19.99%	83	up	up	up
SPY (S&P 500)	109.59	0.02%	-15.62%	65	up	up	up
QQQQ (Nasdaq 100)	43.57	0.14%	-32.75%	46	up	up	up
IWM (Russell 2000)	58.82	-0.68%	-5.96%	39	up	down	up
VXX (VIX Futures)	42.51	1.31%	4.71%	100	down	down	down
Major Sectors	Price	%Chg	Vol%	PMI	ST	MT	LT
IYZ (Telecom)	18.09	-0.06%	-75.98%	48	up	down	up
XLB (Materials)	31.73	0.13%	-7.60%	72	up	up	up
XLE (Energy)	58.21	0.07%	-18.84%	70	up	up	up
XLF (Financials)	14.77	-0.34%	-34.76%	58	up	up	up
XLI (Industrials)	27.40	-0.58%	-19.13%	44	up	up	up
XLK (Technology)	21.73	-0.05%	-42.54%	61	up	up	up
XLP (Consumer Staples)	26.62	-0.04%	-49.47%	39	up	up	up
XLU (Utilities)	29.56	0.41%	-25.85%	74	up	up	up
XLV (Health Care)	29.85	0.67%	-43.23%	91	up	up	up
XLY (Consumer Discrtn)	28.81	0.35%	-1.68%	84	up	up	up
Key Industries	Price	%Chg	Vol%	PMI	ST	MT	LT
BBH (Biotech)	95.95	-0.32%	-78.51%	32	up	down	up
IAI (Broker-Dealers)	28.60	-0.42%	-37.64%	57	up	up	up
IAK (Insurance)	26.67	0.19%	-10.59%	85	up	up	up
IGN (GSTI Networking)	26.33	-0.87%	-74.14%	28	up	up	up
IHI (Medical Devices)	50.39	0.18%	-50.76%	81	up	up	up
ITA (Aerospace & Defense)	47.97	-0.50%	-75.02%	26	up	up	up
IYT (Transportation)	70.13	-0.03%	-37.55%	77	up	up	up
KIE (Insurance)	34.85	-0.83%	-39.38%	45	up	down	up
OIH (Oil Services)	124.09	-0.47%	-36.53%	65	up	up	up
PPH (Pharmaceuticals)	62.81	0.83%	-51.84%	89	up	down	up
RKH (Regional Banks)	79.04	-0.74%	-43.60%	50	up	down	up
RTH (Retail)	94.15	-0.01%	-34.34%	64	up	up	up
SEA (Global Shipping)	12.81	-1.91%	-52.09%	25	up	up	up
SMH (Semiconductor)	25.48	0.87%	-29.68%	62	up	up	up
SWH (Software)	40.45	-0.17%	-76.03%	44	up	up	up
International Equity ETFs
Americas	Price	%Chg	Vol%	PMI	ST	MT	LT
EWC (MSCI Canada)	25.91	-0.04%	-22.77%	68	up	up	up
EWW (MSCI Mexico)	46.89	0.15%	-34.32%	67	up	up	up
EWZ( MSCI Brazil)	76.68	-0.47%	-25.00%	68	up	up	up
ILF (Latin America 40)	47.76	-0.04%	33.26%	76	up	up	up
ISI (S&P 1500)	49.10	0.02%	5.02%	59	up	up	up
Europe	Price	%Chg	Vol%	PMI	ST	MT	LT
EWG (MSCI Germany)	22.33	-1.33%	-21.13%	37	up	up	up
EWQ (MSCI France)	26.43	-0.38%	51.48%	88	up	up	up
EWU (United Kingdom)	16.61	-0.54%	13.33%	88	up	up	up
IEV (S&P Europe 350)	39.99	-0.27%	-8.42%	92	up	up	up
RSX (Russia)	31.19	1.36%	-33.94%	92	up	up	up
VGK (Vanguard Europe)	51.63	-0.39%	-11.57%	88	up	up	up
Asian-Pacific	Price	%Chg	Vol%	PMI	ST	MT	LT
EWA (MSCI Australia)	24.01	0.21%	5.17%	79	up	up	up
EWH (MSCI Hong Kong)	16.10	-0.80%	-36.46%	81	up	up	up
EWJ (MSCI Japan)	9.66	-0.72%	-23.56%	86	up	down	up
EWM (MSCI Malaysia)	11.02	-0.18%	-36.58%	50	up	up	up
EWS (MSCI Singapore)	11.14	-0.62%	-29.13%	73	up	up	up
EWT (MSCI Taiwan)	12.31	-0.24%	-39.07%	55	up	up	up
EWY (MSCI South Korea)	45.36	-1.15%	-55.92%	56	up	up	up
FXI (FSTE China)	45.37	-0.77%	-24.11%	79	up	up	up
IF (Indonesia Fund)	10.00	-1.48%	-13.57%	62	up	up	up
IFN (India Fund)	30.71	0.69%	-15.04%	99	up	up	up
VNM (Vietnam)	27.50	-3.20%	-13.43%	87	down	n/a	n/a
Emerging Markets	Price	%Chg	Vol%	PMI	ST	MT	LT
EEM (MSCI Emerging Mkts)	40.92	-0.46%	-27.84%	60	up	up	up
EWX (Emerging Small Caps)	46.18	-0.50%	-31.94%	76	up	up	up
GAF (Middle East & Africa)	61.78	0.68%	-59.09%	100	up	up	up
GMF (Emerging Asia Pacific)	72.08	-1.10%	-41.29%	81	up	up	up
GML (Emerging Latin America)	77.59	-0.61%	-29.42%	44	up	up	up
GUR (Emerging Europe)	43.88	0.80%	75.96%	86	up	up	up
Alternative Assets
Commodities	Price	%Chg	Vol%	PMI	ST	MT	LT
CRBQ (Global Commodities)	41.81	-0.17%	-69.22%	79	up	down	down
DBA (Agriculture)	25.52	-0.78%	-24.08%	44	down	up	up
DBB (Base Metals)	19.77	-0.15%	-4.36%	61	down	up	up
DBC (Commodities)	24.01	-0.58%	17.08%	43	down	up	up
GLD (Gold)	108.39	0.18%	-5.18%	64	up	up	up
JJC (Copper)	40.97	-0.46%	-66.15%	76	down	up	up
JJG (Grains)	38.62	-1.04%	-38.76%	16	up	up	up
SLV (Silver)	17.03	-1.49%	-3.60%	44	up	up	up
UGA (Gasoline)	36.26	0.50%	-50.88%	49	down	up	up
UNG (Natural Gas)	9.22	-3.96%	1.11%	25	down	down	down
USO (Oil)	40.44	-0.15%	-28.98%	46	up	up	up
Forex	Price	%Chg	Vol%	PMI	ST	MT	LT
BZF (Brazilian Real)	27.11	-0.70%	-27.88%	46	up	up	up
CEW (Emerging Currency)	22.17	-0.31%	-30.42%	68	up	up	up
CYB (Chinese Yuan)	25.32	-0.12%	-29.93%	0	lateral	lateral	lateral
FXA (Australian Dollar)	93.07	0.01%	-15.05%	68	up	up	up
FXB (British Pound)	166.86	-0.12%	19.32%	78	up	up	up
FXC (Canadian Dollar)	95.03	0.73%	-20.64%	96	up	up	up
FXE (Euro)	149.61	-0.05%	-40.41%	60	up	up	up
FXF (Swiss Franc)	98.80	0.01%	-47.00%	68	up	up	up
FXM (Mexican Peso)	75.55	0.05%	72.46%	54	up	up	up
FXY (Japanese Yen)	110.51	0.15%	-71.70%	20	up	up	up
ICN (Indian Rupee)	25.17	-0.12%	-61.45%	42	up	up	up
UUP (U.S. Dollar)	22.45	-0.40%	29.36%	62	down	down	down
XRU (Russian Ruble)	35.57	0.11%	534.78%	14	up	up	n/a
Bonds	Price	%Chg	Vol%	PMI	ST	MT	LT
AGG (Investment Grade)	104.54	0.03%	-21.54%	48	up	up	up
BWX (Int’l Tsy Bonds)	59.36	0.05%	67.68%	83	up	up	up
EMB (Emerging Markets Bonds)	102.37	0.52%	-22.15%	86	up	up	up
HYG (Hi Yld Corp)	85.90	-0.06%	-22.72%	75	up	up	up
IEF (7-10 Yr Tsy)	90.92	0.08%	-6.62%	41	down	down	down
JNK (Hi Yld Bonds)	37.93	-0.45%	-13.49%	14	down	up	up
MBB (Mortgage Bonds)	107.31	0.20%	-4.55%	76	up	up	up
MUB (Nat’l Muni Bond)	102.01	-0.20%	6.08%	17	down	down	up
SHY (1-3 Yr Tsy)	83.94	-0.02%	-41.53%	0	up	up	down
TIP (Tsy Inflation Protect)	104.64	-0.21%	-7.87%	27	up	up	up
TLT (20 Yr+ Tsy)	93.25	-0.20%	-35.04%	29	down	down	down
WIP (Int’l Inflation Protect)	57.74	0.21%	61.15%	33	up	up	up
Real Estate	Price	%Chg	Vol%	PMI	ST	MT	LT
FIO (Industrial Office)	21.62	-1.46%	-85.00%	3	up	up	up
ICF (Cohen & Steers)	48.46	-0.39%	3.84%	65	up	up	up
ITB (Home Construction)	11.83	-1.33%	-54.90%	24	up	down	up
IYR (DJ US Real Estate)	42.35	-0.50%	-14.18%	68	up	up	up
REM (Mortgage Reits)	14.45	-0.14%	27.17%	64	up	down	up
REZ (Residential Index)	28.45	-0.39%	-94.81%	34	up	up	up
RTL (Retail Index)	19.69	-1.89%	-91.30%	3	up	down	up
XHB (Homebuilders)	14.78	-0.81%	-24.35%	37	up	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 Diary: 11-10-2009

% Stocks > Mov Avg	20-Day MA	50-Day MA	200-Day MA
Today	51.28%	54.66%	85.79%
Yesterday	55.12%	57.90%	87.03%
Last Week	19.65%	35.79%	84.78%
Last Month	63.99%	78.31%	91.55%
Daily Market Stats	NYSE		Nasdaq
Advancers	1174		847
Decliners	1893		1851
Advancing Shares	1811205400		846715800
Declining Shares	2636933700		1145376600
52 Week New Highs	221		101
52 Week New Lows	7		20

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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