Bulls Push Through Uncertainty

by on July 21, 2012 | Updated July 22, 2012 | ETFs Mentioned:

Despite persistent threats from Europe and a continuing string of sour economic data releases on the homefront, the bulls demonstrated their resilience this past week as major equity indexes finished in green territory. Investors at home digested Ben Bernanke’s testimony to Congress, during which the Chairman emphasized looming risks but was also reluctant to offer additional stimulus at the moment. Developments on the European front have been fairly quiet all week, although yields on Spanish government bonds remain above the comfort zone as several anti-austerity riots broke out overseas [see also Poland ETFs: A Bright Spot In A Gloomy Region].

Actionable ETF Trade Ideas

Last Week’s Actionable ETF Ideas
Ticker Position Week Performance
FXA

Short

-1.5%
XLK

Long

+1.7%
FXB

Short

-0.4%

Our picks from Monday’s Insider posted solid results during a fairly upbeat week on Wall Street. 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 45 all-ETF model portfolios].

Trade #1 Short FXA: Down 1.5%

This recommendation got off to a worissome start as investors were quick to shift gears into “risk on” mode at the start of the week. A handful of better-than-expected earnings at home helped to increase investors’ risk apptetite in the first half of the week, adding to the pressures surrounding this bearish trade. We stuck to our rules and cut our losses on Thursday after FXA crossed above the outlined stop-loss at $104 a share.

Trade #2 Long XLK: Up 1.7%

This ETF drifted sideways on Monday and Tuesday before resuming its long-term uptrend in the second half of the week. Robust earnings from IBM bolstered the technology sector higher, propelling XLK as high as $29.19 a share on Thursday. Despite the encouraging run up, selling pressures struck XLK on Friday, erasing a hefty chunk of the gains accumulated but ultimately leaving us with a profitable trade on the week.

Trade #3 Long FXB: Up 0.1%

FXB charged higher right from the start on Monday morning, paving the way for bullish expectations for this recommendation. Increasing risk apptetites propelled the British pound higher versus the U.S. dollar throughout the week; FXB climbed as high as $155.84 a share on Thursday before caving into profit-taking pressures the following day, which ended up erasing nearly all of the profit generated by this trade on the week.

ETFdb Portfolios

Retirement ETFdb Portfolios

Our 30 Years Til Retirement portfolio took the lead as equity markets enjoyed a fairly upbeat week despite looming threats from Europe, which continue to eat away at investors’ confidence. Given its more conservative approach, our Low Volatility Portfolio came in last place from a weekly performance perspective.

Regional ETFdb Portfolios

All of our regional portfolios ended up in green territory as bullish prevailed in virtually every corner of the globe. The best performer on the week was the Euro Free Europe Portfolio followed closely by the Easy-As-ABC Portfolio.

Themed ETFdb Portfolios

Our Energy Bull Portfolio was able clinch an impressive gain on the week thanks to a rally in crude oil futures. From a year-to-date perspective, the healthcare-centric Baby Boomers Portfolio still remains at the head of the pack.

Disclosure: No positions at time of writing.