Bulls Lose Steam

by on December 17, 2011 | ETFs Mentioned:

Investors had high hopes for the week after last Friday’s positive developments at the summit in Brussels. Unfortunately, bullish sentiment quickly wore off as European debt woes resurfaced, sparking a wave of fear seeing as how policymakers overseas have yet to decide on a comprehensive plan to ensure stability. Choppy trading was a dominant theme across equity markets despite better-than-expected jobless claims and manufacturing data on the home front. Gold was in the limelight all week as the precious yellow metal sank desperately lower for three days in a row, settling near $1,600 an ounce as the week drew to a close.

Actionable ETF Trade Ideas

Last Week’s Actionable ETF Ideas
Ticker Position Performance
DIA

Short


2.2%
IBB

Long

1.6%
PCY

Long

1%

Our picks from Monday’s Insider posted a mixed performance this past week, with our two long positions turning in small losses, while our short recommendation turned out to be profitable. Below, we highlight how our trade ideas fared during the week [sign up for a free trial of ETFdb Pro to get actionable ETF ideas every Monday, as well as access to more than 30 all-ETF model portfolios].

Trade #1 Short DIA: Up 2.2%

This recommendation got off to a strong start as selling pressures on Monday set the scene for further declines as anticipated. DIA regained a bit of lost ground on Tuesday, although selling pressures in the final hours of trading brought it back down and in-line with our bearish suspicions. This ETF drifted sideways with a downward bias in the days following, leaving us with a respectable 2.2% gain for the week.

Trade #2 Long IBB: Down 1.6%

IBB got off to a worrisome start on Monday as relatively high selling volume in the morning brought it down near our outlined support at the $100 level. This ETF couldn’t escape broad profit-taking pressures on Tuesday and it dipped below $100 a share; likewise, we stuck to our rules and sold the loosing position, ending up with a small 1.6% loss on the week.

Trade #3 Long PCY: Down 1%

This was our fundamentally defensive position for the week and unfortunately PCY did not take on safe haven appeal amidst the uncertainty as we had anticipated. Emerging market equities and bonds crept lower in the first half of the week, although this ETF managed to hold its ground and drift sideways thanks to its U.S. dollar-denominated holdings. Selling pressures struck quickly and abruptly on Thursday as a heavy volume sell order sank PCY below $27 a share. We stuck to our rules and cut our losses, ending up with a minor 1% loss on the week.

ETFdb Portfolios

Retirement ETFdb Portfolios

With Euro zone debt woes still plaguing global financial markets, its not too surprising too see our portfolios edge lower as many investors have been taking profits in anticipation of more volatility. Our conservative Ready To Retire and our new Low Volatility portfolios held their ground quite well, with each one giving up less than a 1% for the week, whereas equity indexes dropped several points.

ETFdb Portfolio Weekly Return
Ready To Retire -0.38%
Low Volatility -0.69%
5 Years Til Retirement -0.85%
Moderate -0.97%
10 Years Til Retirement -1.21%
20 Years Til Retirement -1.54%
Cheapskate -1.57%
30 Years Til Retirement -1.65%
Aggressive -2.08%

Regional ETFdb Portfolios

Our regional portfolios slipped lower into negative territory as volatile trading swept across equity markets yet all over the globe yet again. The Euro debt crisis is a major roadblock that has put a serious damper on investors’ confidence. Given the persistent worries stemming from overseas, it’s not much of a surprise to see our Ex-Europe portfolio at the top of the performance list for the week.

ETFdb Portfolio Weekly Return
Ex-Europe -1.22%
Global Titans -2.13%
Emerging & Frontier Markets -2.33%
Easy-As-ABC -2.40%
LatAm-Centric -2.41%
Ex-U.S. -2.43%
Asia-Centric -2.47%
Euro Free Europe -2.47%
Africa-Centric -3.13%

Themed ETFdb Portfolios

Our themed portfolios broadly declined lower amidst the uncertain economic backdrop, and only our  Ben Graham 50/50 portfolio finished just barely in positive territory for the week. Our new Cheapskate Hedge Fund portfolio held its ground quite nicely during another volatile trading week on Wall Street. From a year-to-date perspective [see All Portfolio Returns] our defensive-themed portfolios, including Simple (But Effective) Safe Haven and The Sky Is Falling remain on top in terms of performance.

ETFdb Portfolio Weekly Return
Ben Graham 50/50 0.22%
Better-Than-AGG Total Bond Market -0.12%
Cheapskate Hedge Fund -0.20%
High Yield -0.23%
Actively Managed -0.62%
Small Cap -1.05%
Alpha Seeker 2.0 -1.06%
High Tax Bracket -1.39%
AlphaDEX -1.56%
Kitchen Sink -1.78%
Equal Weight -1.95%
Simple (But Effective) Safe Haven -1.97%
RAFI -2.02%
The Sky Is Falling -2.43%
High Tech -2.98%
Commodity Guru -3.21%
Energy Bull -4.01%
Futures Free Commodity -4.02%
Black Swan Hyperinflation -5.28%

New ETF Highlights

The exchange-traded universe continues to evolve as several issuers filed plans with the SEC for new products while only one new fund hit the street this past week. Check out our ETF Launch Center for complete updates on all new ETFs.

ETF Launches

NASDAQ-100 Trendpilot ETN (TNDQ)

RBS launched their new NASDAQ-100 Trendpilot ETN, INFL, which utilizes a historical moving average to provide investors exposure to 100 of the largest non-financial securities listed on the NASDAQ exchange. The fund tracks the NASDAQ-100 Total Return Index or the yield on a hypothetical 3-month Treasury bill, depending on the relative performance of the underlying equity index.

Disclosure: No positions at time of writing.