Make Way For The Bulls

by on February 4, 2012 | ETFs Mentioned:

Our bearish suspicions proved incorrect last week as bullish euphoria on Wall Street was bolstered by a string of better-than-expected economic reports. On the home front, construction spending, motor vehicles sales, and jobless claims all beat analyst expectations. The big story was Friday’s employment report, which tipped stocks higher to close out the week after the unemployment rate dipped to 8.3% from 8.5%. Greek debt negotiations have also been moving along and investors appear to be regaining a bit of the confidence in the beat down currency bloc.

Actionable ETF Trade Ideas

Last Week’s Actionable ETF Ideas
Ticker Position Performance
EEM Short





Our picks from Monday’s Insider posted a dismal performance this past week as our defensive calls didn’t hold too well amidst the euphoria. 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 40 all-ETF model portfolios].

Trade #1 Short EEM: Down 3.6%

This ETF sank as low as $41.35 a share on Monday morning, although bargain hunters stepped in and the price held support. EEM extended gains into Tuesday, however, mid-day selling pressures knocked it back down below $42 a share. Wednesday proved to be a pivotal day as broad-based euphoria pushed EEM past our stop-loss; we stuck to our rules and got out after EEM broke the $43 level. Nonetheless, our technical analysis helped us to avoid steeper losses as this ETF continued its bull-run, soaring as high as $43.94 a share on Friday.

Trade #2 Long ZROZ: Down 4.8%

This defensive position didn’t hold its ground too well as investors increased their appetite for risk throughout the week. ZROZ was able to inch higher on Tuesday, although selling pressures prevailed the following days, sparking a sell-off in this otherwise stable ETF. This ETF opened below our stop-loss at $104 a share on Friday, which lead us to incur a slightly larger loss than we had anticipated. The next level of major support for this ETF lies around the $100 mark.

Trade #3 Short FXA: Down 1.6%

This short recommendation got off to a shaky start as the U.S. dollar started the week in a hole. The Aussie dollar extended gains into Tuesday, and trading volumes near the end of the day were relatively high, which gave us reasons to worry. Momentum continued to work against us the following day, although FXA managed to stay underneath our outlined stop-loss. Bullish pressures returned again on Thursday and this ETF hit our sell order at the $107.50 level, leaving us with a frustrating 1.6% loss on the week.

ETFdb Portfolios

Retirement ETFdb Portfolios

Encouraging news on Wall Street propelled our retirement themed portfolios across the board, with the equity-heavy ones leading the pack higher. Our Aggressive portfolio took the top spot in terms of weekly performances, while our conservative Ready To Retire and Low Volatility portfolios lagged behind:

ETFdb Portfolio Weekly Return
Aggressive 1.65%
30 Years Til Retirement 1.40%
20 Years Til Retirement 1.27%
Moderate 1.10%
10 Years Til Retirement 0.99%
Cheapskate 0.82%
5 Years Til Retirement 0.75%
Ready To Retire 0.66%
Low Volatility 0.43%

Regional ETFdb Portfolios

Encouraging developments in the Euro zone coupled with robust data releases on Wall Street paved the way higher for international equity markets across the board. Perhaps our riskiest portfolio, the Africa-Centric strategy, took the lead as investors scaled back on safe haven exposure and flocked to riskier securities abroad instead. Confidence in the Euro zone improved considerably as well, so it’s not too much of a surprise to see our Ex-Europe portfolio at the bottom of the barrel in terms of performances for the week:

ETFdb Portfolio Weekly Return
Africa-Centric 3.23%
LatAm-Centric 2.50%
Easy-As-ABC 2.42%
BRIC-Or-Bust 2.41%
Emerging & Frontier Markets 2.07%
Ex-U.S. 1.67%
Euro Free Europe 1.51%
Asia-Centric 1.38%
Global Titans 1.34%
Ex-Europe 1.00%

Themed ETFdb Portfolios

Our gold-centric portfolio was a star performer as both commodity producers and gold spot prices appreciated throughout the week. Small caps also charged ahead thanks to growing optimism amongst investors. All of our themed portfolio ended the week in bright green territory, and our most conservative one, the Sky Is Falling portfolio, posted the weakest performance [see All Portfolio Returns]:

ETFdb Portfolio Weekly Return
GLD-Free Gold Bug 3.03%
Small Cap 2.59%
AlphaDEX 2.36%
High Tech 2.33%
Futures Free Commodity 2.06%
RAFI 1.94%
2012 ETFdb Portfolio 1.53%
Equal Weight 1.37%
High-Tax Bracket 1.36%
Actively-Managed 1.23%
Kitchen Sink 1.17%
Black Swan Hyperinflation 1.15%
Socially Responsible 0.96%
Alpha Seeker 2.0 0.76%
High Yield 0.76%
Simple (But Effective) Safe Haven 0.66%
Better-Than-AGG Total Bond Market 0.61%
Energy Bull 0.57%
Financials Free 0.26%
Cheapskate Hedge Fund 0.17%
The Sky Is Falling 0.08%

Disclosure: No positions at time of writing.