ETF Market Direction Summary (12-01-2009)
Investor fears subsided on Tuesday after Dubai World conveyed that it is working to restructure $26bn of debt and that its other liabilities remain "stable". This alone was enough to relieve worries of the initially reported rumors of potential default ranging from $60bn to $80bn.
Meanwhile, the audacity of hope for a global economic recovery still lives. While U.S. economic reports were a mixture of bullish and bearish data, China’s manufacturing grew at its fastest pace in 5 years.
All of the above demoted the U.S. dollar once again to "whipping boy" status and the positive performance of riskier assets broadened in breadth and momentum as stocks and commodities continued to add to Monday’s gains.
Price Volume Analysis (PVA) for Hillbent 3000: Of course, no Hillbent market diagnostic report would be complete without a look underneath the hood. Advancers clearly outpaced decliners, but the day was almost evenly divided between genuine bulls (PUVU) and their impostors (PUVD). However, the SPY, DIA, and QQQQ may be signaling clues of distribution with below average volume and negative momentum. The contrarian of the major U.S. equity averages remains the IWM, which managed to trade up on above average volume. Overall, the quality of this two day rally leaves me a little suspicious and I would prefer to see U.S. equity averages take out their November highs before committing fresh capital.
PUVU: price up & volume up (most bullish) @ 40.13%
- PUVD: price up & volume down (indicative of distribution and selling into strength) @ 43.03%
- PDVU: price down & volume up (contrarian bullish signal for capitulation and transfer of stocks from weaker hands) @ 7.90%
- PDVD: price down and volume down (most bearish based upon lack of buyers to establish support) @ 7.43%
(*Note that the Hillbent 3000 screens the top 3000 market capitalization stocks with a minimum average daily volume of 100,000 shares and also includes ADRs that fall within these parameters. This group represents at minimum @ 95%+ of the aggregate market capitilization of more than 8000 equity issues trading on U.S. exchanges.)
Despite the lack of volume, the trends for ETFs are reasserting their bullish direction. Standouts continue to be commodity and emerging market ETFs whose advances are actually being supported by rising volume. Retail (NYSEARCA:RTH) and Semiconductors (NYSEARCA:SMH) re-established their short-term uptrends, but on weaker volume.
- Economic Data:
- November’s Domestic Motor Vehicle Sales report exceeded expectations despite the expiration of cash-for-clunkers and high unemployment. Annualized sales came in @ 8.2mm vs. consensus @ 7.75mm and previous month @ 7.9mm.
- October’s Pending Home Sales index registered a 3.7% monthly improvement @ 114.1 vs. previous month @ 110.1. Housing could be showing signs of a bottom as the report’s annualized pending sales are up 31.8%.
- $30bn Treasury Bill Auction: Demand for the 4-week treasury bill auction was extremely strong with a bid-to-cover ratio @ 4.07.
- China PMI: China’s manufacturing increased +0.3 to 55.7, thus marking its highest level in 5 years and supporting views of an imminent global recovery.
- Bank of Japan Emergency Board Meeting: The BOJ will offer 3-month loans at 0.1% to commercial banks and will enlist a 10trn yen ($115bn) economic program to battle deflation and the yen’s surge to a 14-year high. The BOJ is also expected to increase its QE measures to 2.2trn to 2.5trn yen in asset purchases over the coming months.
- The Reserve Bank of Australia (RBA) increased interest rates for the third consecutive month. The 25bps move to 3.75% was based upon continuing signs of strength in the Australian economy.
- Europe’s PMI: November PMI manufacturing indexes for France, Germany and the Euro-Zone were revised upward to +0.2 @ 51.2 for a 20-month high.
German Unemployment & Retail Sales: Unemployment in Germany came in better than expected @ -7k to reflect a rate @ 8.1%. Retail sales in October increased +0.5% and exceeded expectations.
- Positive Earnings/Guidance:
Semiconductor Industry: Altera Corp. (NASDAQ:ALTR) issued positive sales guidance for 4Q @ $330mm to $338 vs. consensus estimates @ $326mm. This reflects a 15% to 18% growth rate from 3Q vs. previous guidance @ 6% to 10%. The company believes sales to wireline and wireless telecom equipment makers contribute the most to its growth as demand from Chinese and Indian deployments continue to improve.
- Semiconductor Industry: Due to solid bookings and sales in October thru November, Microchip (NASDAQ:MCHP) issued positive 3Q guidance with revenues @ $240.3mm - $244.8mm vs. previous guidance @ $234.7mm - $244.8mm and EPS @ $0.29 vs. previous gudiance @ $0.27 - $0.29. It also projects an improvement in margins and operating expenses.
- Retail Industry: Guess? Inc. (NYSE:GES) reported EPS @ $0.69 vs. consensus @ $0.51 and issued positive 4Q guidance @ $0.77 - $0.80 vs. consensus @ $0.69 and revenues @ $584mm - $605mm vs. consensus @ $563.8mm. The company sees its future growth coming from increased market share and international expansion into other countries.
Retail Industry: Staples Inc. (NASDAQ:SPLS) reported 3Q EPS @ $0.39 vs. consensus @ $0.38 and revenues @ $6.52bn vs. consensus @ $6.45bn; and issued in-line guidance for 4Q earnings and revenues.
- News Events:
- Carryover from Asian Markets: Japan +2.43%, Hong Kong +1.34%, China +1.40%, Taiwan +0.88%, Australia +0.38%, Singapore +1.42%, South Korea +1.13%, India +1.61%
- Carryover from European Markets: London FTSE +2.34%, German DAX +2.68%, Paris CAC +2.60%
- Insurance: American International Group Inc. (NYSE:AIG) had the biggest advance in the Standard & Poor’s 500 Index, rallying 11 percent to $31.53. The insurer said it reduced debt owed to the Federal Reserve Bank of New York by $25bn (from $60bn to $35bn) after handing over stakes in two overseas units.
Precious Metals: Barrick Gold (NYSE:ABX) demonstrated its bullish view on gold prices by announcing the elimination of all its gold hedges. This move gives the company, one of the industry’s largest gold producers and owner of reserves, full leverage to gold prices.
- Economic Data:
- November’s ISM Manufacturing Index was below expectation with a report @ 53.6 vs. consensus @ 55.0 and previous month @ 55.7. A detailed analysis of the report can be found at Econoday.
- Casting a shadow over a better than expected Construction Spending report was September’s downward revision from 0.8% to -1.6%. October’s activity was unchanged @ 0.00% vs. consensus expectations @ -0.4%. On a yr/yr basis, construction spending improved slightly from -15.8% to -14.4%. The residential construction spending component increased 4.4% m/m.
ETF 5 Day New Highs: (Note * denotes 250 day new high)
- U.S. Equities (DIA*, QQQQ, SPY, XLB*, XLI, XLK, XLU, XLV*, XLY, CRBQ, CUT, FAA, FDN, GDX*, HAP*, IGF*, IYT, MOO, PPH*, RKH, RTH*, SLX*, SMH, TAN, XME)
- International Equities (EWC, EWW*, EWZ*, ILF*, ISI, EWA, EWH, EWJ, IFN, EEM, EWX, GMF, GML*)
- Commodities (DBA, DBB*, DBC*, GLD*, JJC*, JJG, PTM*, SLV*, UGA, USO)
- Forex (BZF, FXC)
- Bonds (BWX*, WIP*)
- Real Estate (FIO, ICF, IYR, REM, REZ, RTL)
ETF 5 Day New Lows: (Note * denotes 250 day new low)
- U.S. Equities (FDN)
- Forex (CYB, UUP*)
- Bonds (EMB, MBB, MUB, SHY)
Signing off at Hillbent on The Market Direction and ETF Market Trends™…
ETF Market Trends™ Monitor (12-01-2009)
|U.S. Equity ETFs|
|DIA (DJ Industrials)||104.73||1.11%||-17.61%||53||up||up||up|
|SPY (S&P 500)||111.30||1.24%||-19.17%||61||up||up||up|
|QQQQ (Nasdaq 100)||44.02||1.06%||-18.99%||33||up||up||up|
|IWM (Russell 2000)||58.99||1.55%||1.48%||69||down||down||up|
|VXX (VIX Futures)||38.79||-3.70%||-32.21%||22||down||down||down|
|XLP (Consumer Staples)||27.15||1.38%||-23.87%||97||up||up||up|
|XLV (Health Care)||31.22||1.76%||-2.17%||100||up||up||up|
|XLY (Consumer Discrtn)||29.06||1.54%||-5.75%||59||up||up||up|
|CRBQ (Global Commodity Equities)||43.74||3.50%||-55.74%||84||up||n/a||n/a|
|CUT (Global Timber)||17.97||2.33%||64.47%||86||up||up||up|
|FAN (Global Wind Energy)||15.53||1.50%||-26.49%||50||down||down||up|
|FDN (DJ Internet Index)||24.13||1.30%||46.54%||89||up||up||up|
|GDX (Gold Miners)||53.67||5.02%||5.86%||68||up||up||up|
|HAP (Hard Assets Producers)||34.47||3.02%||-50.62%||91||up||up||up|
|IGF (Global Infrastructure)||34.87||1.84%||-26.77%||79||up||up||up|
|IGN (GSTI Networking)||26.15||2.19%||145.96%||97||down||down||up|
|IHI (Medical Devices)||51.80||1.01%||-40.38%||32||up||up||up|
|ITA (Aerospace & Defense)||49.16||1.55%||19.33%||68||up||up||up|
|NLR (Nuclear Energy)||23.13||2.16%||-17.51%||69||up||down||up|
|OIH (Oil Services)||119.77||1.19%||-40.48%||22||down||down||up|
|PHO (Water Resources)||16.25||1.37%||-16.79%||66||down||down||up|
|PXR (Emerg Mkts Infrastructure)||43.43||3.63%||23.08%||89||up||up||up|
|RKH (Regional Banks)||78.73||0.05%||-33.35%||54||up||down||up|
|SEA (Global Shipping)||13.44||1.74%||298.98%||57||down||up||up|
|TAN (Global Solar Energy)||9.58||3.12%||-34.42%||67||up||up||up|
|XME (Metals & Mining)||49.85||1.94%||0.14%||32||up||up||up|
|International Equity ETFs|
|EWC (MSCI Canada)||26.71||3.09%||8.21%||83||up||up||up|
|EWW (MSCI Mexico)||49.71||3.76%||34.05%||70||up||up||up|
|EWZ( MSCI Brazil)||78.92||3.21%||-8.22%||71||up||up||up|
|ILF (Latin America 40)||49.07||2.51%||-23.14%||56||up||up||up|
|ISI (S&P 1500)||49.92||1.42%||-57.47%||99||up||up||up|
|EWG (MSCI Germany)||22.98||2.13%||-33.41%||61||up||up||up|
|EWQ (MSCI France)||26.55||2.67%||-43.35%||81||up||up||up|
|EWU (United Kingdom)||16.71||2.70%||-50.01%||50||down||up||up|
|IEV (S&P Europe 350)||40.25||2.34%||-2.30%||71||up||up||up|
|VGK (Vanguard Europe)||51.87||2.71%||80.75%||74||up||up||up|
|EWA (MSCI Australia)||23.91||2.49%||2.41%||59||up||up||up|
|EWH (MSCI Hong Kong)||16.18||2.02%||-9.87%||25||up||up||up|
|EWJ (MSCI Japan)||9.89||3.45%||202.23%||76||up||up||up|
|EWM (MSCI Malaysia)||10.95||0.83%||-14.27%||56||down||up||up|
|EWS (MSCI Singapore)||11.57||1.85%||59.11%||54||up||up||up|
|EWT (MSCI Taiwan)||12.43||1.64%||44.02%||13||down||up||up|
|EWY (MSCI South Korea)||45.59||2.73%||-9.35%||75||down||down||up|
|FXI (FSTE China)||44.91||2.77%||15.14%||51||down||up||up|
|IF (Indonesia Fund)||10.22||1.69%||-5.37%||77||down||up||up|
|IFN (India Fund)||31.31||3.33%||8.49%||97||up||up||up|
|EEM (MSCI Emerging Mkts)||41.68||2.86%||2.67%||72||up||up||up|
|EWX (Emerging Small Caps)||47.05||2.30%||-22.77%||83||up||up||up|
|GAF (Middle East & Africa)||61.51||1.32%||53.78%||0||up||up||up|
|GMF (Emerging Asia Pacific)||73.76||2.34%||-29.61%||83||up||up||up|
|GML (Emerging Latin America)||80.91||3.18%||9.08%||76||up||up||up|
|GUR (Emerging Europe)||42.46||2.88%||165.20%||41||down||up||up|
|DBB (Base Metals)||21.33||1.91%||118.38%||71||up||up||up|
|UNG (Natural Gas)||9.04||-1.20%||37.01%||39||down||down||down|
|BZF (Brazilian Real)||26.97||2.04%||60.44%||34||up||up||up|
|CEW (Emerging Currency)||22.35||0.90%||139.55%||19||up||up||up|
|CYB (Chinese Yuan)||25.29||0.00%||13.04%||67||lateral||lateral||lateral|
|DBV (G10 Currencies)||23.14||1.22%||141.99%||56||down||down||up|
|FXA (Australian Dollar)||92.49||1.00%||-0.02%||65||down||up||up|
|FXB (British Pound)||165.75||1.02%||-45.76%||62||down||up||up|
|FXC (Canadian Dollar)||95.28||0.89%||-0.19%||12||up||up||up|
|FXF (Swiss Franc)||99.56||0.39%||-37.64%||3||up||up||up|
|FXM (Mexican Peso)||77.85||0.76%||6.31%||100||up||up||up|
|FXY (Japanese Yen)||114.55||-0.26%||146.96%||55||up||up||up|
|ICN (Indian Rupee)||25.17||0.00%||-55.96%||0||down||up||up|
|UUP (U.S. Dollar)||22.06||-0.50%||-20.57%||57||down||down||down|
|XRU (Russian Ruble)||34.50||0.53%||-41.93%||13||down||up||up|
|AGG (Investment Grade)||105.17||-0.29%||46.06%||0||down||up||up|
|BWX (Int’l Tsy Bonds)||60.61||0.56%||1.17%||49||up||up||up|
|EMB (Emerging Markets Bonds)||102.24||0.28%||21.22%||85||down||down||up|
|HYG (Hi Yld Corp)||85.70||0.49%||3.32%||73||down||up||up|
|IEF (7-10 Yr Tsy)||92.35||-0.54%||9.86%||14||up||up||down|
|JNK (Hi Yld Bonds)||37.93||0.38%||54.72%||82||down||down||up|
|MBB (Mortgage Bonds)||107.76||-0.21%||132.08%||26||down||up||up|
|MUB (Nat’l Muni Bond)||102.74||0.08%||12.01%||61||up||down||up|
|SHY (1-3 Yr Tsy)||83.77||-0.56%||58.21%||25||down||down||down|
|TIP (Tsy Inflation Protect)||106.16||-0.19%||3.70%||10||up||up||up|
|TLT (20 Yr+ Tsy)||95.23||-1.14%||13.31%||5||up||down||down|
|WIP (Int’l Inflation Protect)||58.69||1.00%||81.58%||73||up||up||up|
|FIO (Industrial Office)||22.58||4.56%||54.30%||90||up||up||up|
|ICF (Cohen & Steers)||50.31||1.23%||-0.76%||72||up||up||up|
|ITB (Home Construction)||11.64||1.66%||93.05%||54||down||down||up|
|IYR (DJ US Real Estate)||43.98||1.29%||-11.14%||70||up||up||up|
|REM (Mortgage Reits)||14.82||-0.47%||-61.02%||14||up||down||up|
|REZ (Residential Index)||29.95||1.76%||171.59%||87||up||up||up|
|RTL (Retail Index)||20.24||0.70%||3397.07%||53||up||up||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: 12-01-2009
|% Stocks > Mov Avg||20-Day MA||50-Day MA||200-Day MA|
|Daily Market Stats||NYSE||NASDAQ|
|52 Week New Highs||281||158|
|52 Week New Lows||2||27|
Hillbent Market Direction Resources
Investor’s Selected Reading: N/A
Positive & Negative Earnings Surprises: Refer to Hillbent’s earnings summary report for a detailed analysis of positive & negative earnings surprises
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