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RBS US Large Cap Alternator ETN (ALTL)

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  • Sep. 17, 2014, 1:20 PM
    • The Stock Split Index Fund (NYSE:TOFR) began trading yesterday, marking a break from United States Commodity Funds' historical focus on commodity ETFs.
    • TOFR seeks to capture the price appreciation that can follow stock splits, using the 2 for 1 Index.
    • "Investors and investment professionals have both been taught that stock splits really shouldn't impact a stock's performance, but there has been a lot of material published that demonstrates that stock splits, do in fact, matter" stated John Hyland in a press release.
    • Other alternative
    • Other ETFs invested in company changes: CSD, NFO, RYJ, KNOW, MNA, CSMA, MRGR, ALTL, CSMB
    | 1 Comment
  • May. 15, 2014, 7:46 AM
    • "I'm not saying go short, I'm just saying don't be too fricking long right now," David Tepper tells hedge fund colleagues at SkyBridge Capital's SALT conference in Vegas.
    • Among his concerns are lame growth in the U.S. and an ECB which has sat on its hands too long as deflation takes over in Europe. "The ECB - they better ease in June ... I don't know how far behind the curve, but I think they're really, really far behind the curve."
    • "There's times to make money and there's times not to lose money. This is probably (a time when) you're supposed to think about preserving some of your money ... I think it's nervous time."
    • ETFs: PRF, VV, SCHX, NY, FEX, JKD, EQL, SPXH, EEH, TRSK, PXLC, ERW, FWDD, ALTL, SYE
    | 35 Comments
  • Apr. 11, 2014, 10:34 AM
    • Bull markets don't end with such high cash levels and low leverage, says BAML chief investment strategist Michael Hartnett. What we're seeing now is a "hard reversal" period, with "extreme positions" being quickly eliminated. To wit, the Nikkei's worst 5-day stretch this week since the earthquake/tsunami of 2011, while money flows into previously-hated emerging markets (EEM -0.3%). EM equities, says Hartnett, have outperformed the Nikkei by nearly 1K basis points since mid-March.
    • He expects to hear policy doves again make themselves heard as markets slip. “The biggest risk is that markets lose trust in vacillating Fed, the only policy maker the market truly trusts."
    • The real correction, says Hartnett, comes this fall, as the Fed wraps up QE and the idea of rate hikes really begins to come into focus.
    • ETFs: PRF, VV, SCHX, NY, FEX, JKD, EQL, EEH, SPXH, TRSK, ERW, PXLC, FWDD, ALTL, SYE
    | 1 Comment
  • Mar. 18, 2014, 3:43 PM
    • "Buying stocks with the proceeds from a home equity loan diversifies the portfolio," writes Jonathan Yates, in an article appearing on MSN's Money website.
    • The low rates on mortgages allow homeowners an arbitrage play, borrowing at say, 3.25% to buy the stock of REITs with higher yields. What could possibly go wrong?
    • Broad market ETFs: PRF, VV, SCHX, NY, JKD, FEX, EQL, EEH, SPXH, TRSK, FWDD, PXLC, ERW, ALTL, SYE
    | 11 Comments
  • Mar. 15, 2014, 9:00 AM
    • They're still playing sports highlights at the greasy spoons in Boston, says Jeremy Grantham, not too worried about stocks being in a bubble. Harking back to a real bubble, Grantham remembers 2000, when the Celtics were displaced by CNBC's breathless coverage at these same joints.
    • Numbers make the same argument: The S&P 500 at 1,860 is only about 1-2 standard deviations outside the normal distribution of stock levels. To get to a two-sigma event - and a bubble - would require an S&P 30% higher than where it is now.
    • "There is an enormous creative tension for a sensible investor," says Grantham. The market is overvalued, but not absurdly so, and then there's the Fed backstop. "On a shorter time horizon, you can get whacked around the head, as we have been frequently."
    • So what's he buying? Emerging markets and value stocks in Europe are only selling at about fair value. In the U.S., high-quality stocks are not nearly as overpriced as the rest of the market (isn't the S&P 500 supposed to be "high-quality" stocks?). The Wells Fargo Advantage Absolute Return Fund (managed by GMO) has a 49% global equity allocation - high considering GMO's belief stocks are so overvalued - but Grantham expects the weighting to move down to 38% by October, which would be more inline with GMO's expectations of future equity returns.
    • Broad large-cap ETFs: PRF, VV, SCHX, NY, JKD, FEX, EQL, EEH, SPXH, TRSK, FWDD, PXLC, ERW, ALTL, SYE
    | 10 Comments
  • Mar. 14, 2014, 7:37 AM
    • "The creaks and groans in the copper price reflect the sound of the tunnel supports giving way," writes SocGen professional bear Al Edwards. "Decoupling" is the "most dangerous word in finance," he says, and slumping metals prices isn't just about some temporary local issues in China. "Do not rely on decoupling. Do not rely on central bank liquidity. Do not reply on hope. Hope is a false friend in these markets."
    • The price of copper has slid to about a 4-year low this week (though it's up 1% this morning), amid China's slowing economy and fears of a for-the-books credit bust-up.
    • Copper ETFs: JJC, CPER, CUPM
    • Broad market ETFs: PRF, VV, SCHX, NY, JKD, FEX, EQL, EEH, SPXH, TRSK, FWDD, PXLC, ERW, ALTL, SYE
    | Comment!
  • Mar. 3, 2014, 12:27 PM
    • The contrarian read flashes a "buy" signal when the sell-side shows extreme bearishness (it's been in buy mode for about the last two years), and hollers "sell" when the pros get too bullish (the last sell signal was 2007).
    • Sharply rising since late year, the indicator is near crossing from "buy" territory to neutral, but hasn't gotten there yet after coming in at 54 for the 2nd straight month.
    • Broad large-cap ETFs: PRF, VV, SCHX, NY, FEX, JKD, EQL, EEH, SPXH, TRSK, FWDD, PXLC, ERW, ALTL, SYE
    | Comment!
  • Feb. 21, 2014, 2:48 PM
    • Maybe sensing the moderate early-2014 selloff is done with, investors poured $13.4B into equities in the latest week, according to BAML - the strongest in 12 weeks and bringing YTD equity asset-gathering back to flat.
    • Emphasizing the risk appetite theme, flows into high-yield bonds of $2.4B were the highest in 17 weeks, and money-market funds saw outflows of $40.45B after receiving inflows of $11.55B the previous week.
    • Still, emerging market debt and equity continues to be sold. In fact, outflows from EM equities over the past four weeks have risen to 2.2% of AUM - just shy of the 3% level which signals a contrarian "buy" signal, says BAML.
    • Turning into a pretty good contrarian signal himself, is Hugh Hendry, who dropped his multi-year caution in December to get "long pretty much anything." His Eclectica Fund subsequently lost 3.6% in January - its worst monthly tally ever.
    • Related ETFs: PRF, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, NY, SCHG, SCHV, PWV, FLAG, MGV, DOD, JKD, FEX, EQL, IWY, PWB, JKE, EZY, IWX, FTC, EEH, SPXH, JKF, SFK, TRSK, RWG, FWDD, FNDX, PXLC, ERW, PXLV, GVT, SYG, ALTL, PXLG, SYE, SYV, IELG
    | 9 Comments
  • Feb. 11, 2014, 10:07 AM
    • Making the rounds on trading desks is this chart of the DJIA (DIA) of the last 18 months superimposed on a chart of the index during the same time frame in 1928-1929. The short version: If form holds, the market is set for another epic crash.
    • In the more nuanced version, the chart says little except for again proving the hardwired tendency of the human brain to see patterns where none exist, and one is reminded of similar exercises over the past few years making the case for the Dow breaching its financial crisis lows.
    • Technical guru Tom DeMark, however, is starting to believe:  “Originally, I drew [the chart] for entertainment purposes only ... Now it’s evolved into something more serious.”
    • Tom McClellan: "There is no guarantee that the market has to continue following through with every step of the 1929 pattern. But between now and May 2014, there is plenty of reason for caution.”
    • Large-cap ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, IVV, SPXU, UPRO, VOO, SPLV, TQQQ, QID, PRF, SPXL, SPXS, RSP, DOG, SQQQ, QLD, DXD, RWL, EPS, UDOW, SDOW, USMV, DDM, VV, SCHX, IWB, NY, SPHB, BXUB, QQEW, QQQE, JKD, FEX, VONE, TRND, SFLA, EQL, BXUC, ROLA, QQXT, BXDB, EEH, ONEK, SPXH, TRSK, FWDD, EWRI, TNDQ, PXLC, LGLV, ALTL, SYE
    | 31 Comments
  • Feb. 5, 2014, 1:46 PM
    • A contrarian indicator? With equities selling off hard, AAII's sentiment survey for the week ending Jan. 29 shows a 590 bps drop in bullish sentiment to 32.2%, and a 900 bps increase in bearish sentiment to 32.8%. Neutral sentiment is down 310 bps to 35.1%.
    • Bullish sentiment is now well below a long-term average of 39%, and bearish sentiment moderately above a long-term average of 30.5%.
    • ETFs: PRF, VV, SCHX, JKD, EQL, EEH, SPXH, TRSK, FSE, PXLC, FSU, FWDD, ALTL
    | 2 Comments
  • Feb. 3, 2014, 12:55 PM
    • BAML's Sell Side Consensus indicator - reliably flashing a Buy on stocks for more than a year - still reads a Buy, but barely so. The indicator is a contrarian signal - when readings show extreme bearishness on equities, it's bullish for stocks.
    • Rising bullishness among the sell-side has brought the gauge to nearly a Neutral reading, but it remains far below the level necessary to generate a Sell call.
    • Broad large-cap ETFs: PRF, VV, SCHX, NY, JKD, FEX, EQL, EEH, SPXH, TRSK, FWDD, PXLC, ALTL, SYE
    | Comment!
  • Jan. 7, 2014, 1:12 PM
    • The future looks like the recent past to Citi Private Bank, which - in its 2014 outlook - says stocks have room to run, but beware fixed income. Citi's projections are based on its Adaptive Valuation Strategies which looks at long-term valuation averages to gauge what an asset might offer in the coming decade.
    • "Our long-term AVS return estimates for government, investment-grade corporate and high-yield bonds are only 1.9%, 3.4% and 2.9% respectively. The recent rise in bond yields has helped emerging markets where estimated returns have now risen to 5.1%."
    • Don't toss away fixed-income entirely, says Citi, but instead cut duration exposure, look for credit risk instead of rate risk, diversify into MLPs, REITs, and dividend stocks, and favor floating-rate investments.
    • Broad fixed-income ETFs: AGG, BOND, BND, BSV, BIV, BLV, SCHZ, LAG, SAGG, ILTB, ISTB, GVI, GBF, FWDB, MINC, GIY, AGND, AGZD
    • Broad equity ETFs: PRF, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, SCHG, SCHV, PWV, MGV, FLAG, DOD, JKD, FEX, IWY, EQL, JKE, EZY, PWB, IWX, FTC, EEH, JKF, SPXH, TRSK, SFK, PXLC, FWDD, RWG, FNDX, PXLV, ALTL, GVT, PXLG, IELG
    | Comment!
  • Dec. 26, 2013, 9:35 AM
    | 4 Comments
  • Dec. 11, 2013, 12:08 PM
    • "2014 is the year to squeeze more juice out of risk assets. But investors should be ready to discard the fruit when it starts running dry," says BlackRock's Ewen Cameron Watt in the firm's 2014 Investment Outlook. "Beware of traffic jams: easy to get into, hard to get out of."
    • Behind the view is the idea central banks (U.S., U.K, Canada, China, to name a few) are poised to begin tightening monetary policy.
    • BlackRock doesn't believe stocks are yet in a bubble, but its "risk indicator" - measuring enterprise value against earnings adjusted for volatility - is nearly as high as just before the dotcom bust. "The ratio of the two is the key. High valuations combined with low volatility can make for a lethal mix. This market gauge sounded the alarm well before the Great Financial Crisis."
    • Broad large-cap ETFs: PRF, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, SCHG, SCHV, PWV, FLAG, MGV, DOD, JKD, FEX, EQL, IWY, EZY, JKE, PWB, IWX, FTC, JKF, EEH, SPXH, TRSK, SFK, FWDD, PXLC, ALTL, PXLV, GVT, RWG, FNDX, PXLG, IELG
    | 2 Comments
  • Dec. 6, 2013, 1:13 PM
    • "The great peril is not that the Fed finally tightens monetary policy and US stock prices suddenly tumble from what are very obviously overpriced levels," writes Hugh Hendry in his December letter, explaining his new-found bullishness. "The greater peril is that the current backdrop will turn out to mark a rapid acceleration in the ongoing move to the upside."
    • In a highly entertaining essay drawing inspiration from the classic Bob Ryan character who popped up on HBO's Entourage for a couple of episodes, Hendry notes the eerie comparison to the markets of 1928, 1982, and 1998 - all ended badly, yes, but participants made plenty of money during the boom phase.
    • "Just be long. Pretty much anything."
    • Broad large-cap ETFs: PRF, PKW, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, SCHG, SCHV, PWV, FLAG, MGV, DOD, JKD, FEX, EQL, IWY, EZY, JKE, PWB, IWX, FTC, JKF, EEH, SPXH, TRSK, SFK, PXLC, FWDD, PXLV, ALTL, GVT, RWG, FNDX, PXLG, IELG
    | 2 Comments
  • Dec. 2, 2013, 12:43 PM
    • "Historically, when our indicator has been this low or lower, total returns over the subsequent 12 months have been positive more than 95% of the time, with median 12-month returns of +27%," says BAML's Savita Subramanian of the Sell Side Indicator.
    • The index has moved to a 19-month high as of November 30, but still remains in extreme bearish territory (meaning bullish for stocks). In fact, the level of bearishness is pretty near where it was at the epic March 2009 lows.
    • Broad large cap ETFs: PRF, VV, SCHX, JKD, EQL, EEH, SPXH, TRSK, PXLC, FWDD, ALTL
    | Comment!
ALTL vs. ETF Alternatives
ALTL Description
The RBS US Large Cap Alternator ETNs™ are designed for investors who seek exposure to the RBS US Large Cap Alternator Index™ (USD) (the “Index”). The Index utilizes a systematic relative strength strategy to provide exposure to either the S&P 500® Total Return Index, the S&P 500® Low Volatility Total Return Index or the S&P 500® Equal Weight Total Return Index (each, an “Underlying Index”), depending at any given time on the relative performance of the Underlying Indices as measured by their Relative Strength Scores. A “Relative Strength Score” is assigned to each Underlying Index on the last Index business day of each calendar month that is not a disrupted day (a “determination date”) and is the simple average of the returns of that Underlying Index for the prior one-month, three-month, six-month, nine-month and twelve-month periods. The Index will track the return of the Underlying Index with the highest Relative Strength Score on any determination date, but not the other two Underlying Indices, for the following month.
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