We received good Claims Numbers and mixed Housing numbers Thursday morning, but equities were rather quiet. The DJIA had hit a new high in the session, before falling back to a small loss. The NDX eked out a small gain, but managed to set a new record close and intra-day high. The SPX closed down only a few points, in a session that had widespread losses. Though price change seemed rather lethargic, volume was above average, as it has been all week. Options expire today, so some of the volume this week may be options related. At the close, the DJIA slipped 0.37%, the SPX inched down 4.5 points, and the NDX added 1 point. Breadth was decidedly negative, 2.6 to 1, on above average volume. ROC(10)’s declined, with all three major averages continuing in positive territory. RSI’s moved slightly lower, with the DJIA continuing to lead at 82.9. The SPX finished at 78.9 and the NDX at 77.8. They remain in near term over-bought territory. All three MACD’s continue above signal. The ARMS index ended at 0.80, a bullish reading at the close. The NDX was the only index to close at a new record high. It closed at 6811 and traded as high as 6826(intra-day record). It remained below its upper Bollinger band of 6855. It continues comfortably above its 20D-SMA of 6588. The DJIA hit a new intra-day high of 26153, but fell back to close at 26017. Its 20D-SMA is at 25177. The SPX closed at 2798 and traded as high as 2805. Its upper Bollinger Band is at 2812. Its 20D-SMA is at 2725. The dollar has been in a downtrend since early 2017. UUP(PowerShares Dollar ETF)is at its lowest level since late 2014. The VIX added 2.6% to finish at 12.21. The VIX has been higher every day this week. Near term support for the NDX is at 6800 and 6775. Near term resistance is at 6825 and 6850. Near term support for the SPX is at 2775 and 2750. Near term resistance is at 2812 and 2825. Europe is higher in early trade. US Futures are slightly higher in the pre-market.
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Relative to traditional ETFs, leveraged, inverse and leveraged inverse ETFs typically have higher costs and lower tax efficiency. 3) The effects of compounding can lead to significant deviations from traditional benchmarks over longer time periods. For example, if $100,000 is invested in an index that increases in value by 10% on day one and then decreases in value by 10% on day two, the investment will be worth $110,000 at the end of day one and $99,000 after day two. However, the value of a security that doubles the daily performance of the index would be worth $120,000 on day one and $96,000 after day two. Thus, the index is down 1% after two days, a doubling of which would be down 2%. However, the security attempting to double the return of the index is down 4%. Investors should consider carefully the potential impact over longer periods. MLP and MLP ETF Risks Individual MLPs are publicly traded partnerships that have unique risks related to their structure. These include, but are not limited to, their reliance on the capital markets to fund growth, adverse ruling on the current tax treatment of distributions (typically mostly tax deferred), and commodity volume risk.
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