Sour Data Spooks Bulls

by on May 5, 2012 | ETFs Mentioned:

Equity markets turned south this past week as sour economic data deteriorated investors’ confidence, dragging down major indexes into red territory. Volatility was quick to return as mixed economic reports paved the way for profit taking on Wall Street. On the bright side, manufacturing and weekly jobless claims both came in better-than-expected; nonetheless, investors focused their attention on Friday’s employment report which showed that fewer-than-expected jobs were added in April despite a drop in the unemployment rate to 8.1% [see also 5 Simple ETF Trading Tips].

Actionable ETF Trade Ideas

Last Week’s Actionable ETF Ideas
Ticker Position Performance
EDV

Long

+0.6%
SCIN

Long

-5.7%
XVIX

Long

-1.5%

Our picks from Monday’s Insider posted a disappointing performance during a week largely dominated by bears 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 40 all-ETF model portfolios].

Trade #1 Long EDV: Up 0.6%

This fundamentally defensive recommendation got off to a concerning start as EDV drifted sideways on Monday, only to drop below $114 a share the following day. Nonetheless, this ETF managed to hold above our outlined stop-loss at $113 a share which was an encouraging sign. Our bullish suspicions proved true in the days following as EDV climbed higher alongside choppy equity markets, ultimately leaving us with a 0.6% gain on the week.

Trade #2 Long SCIN: Down 5.7%

This aggressive equity pick got off to a solid start in the first two days of the trading week. However, SCIN saw major profit taking pressures develop on Wednesday, dragging it down below $14 a share; bearish forces prevailed on Thursday as well, sinking this ETF as low as $13.22 a share. We stuck to the rules and cut our losses on Friday as SCIN dipped below our outlined stop-loss at the $13 as share, leaving us with a frustrating 5.7% loss on the week.

Trade #3 Long XVIX: Down 1.5% 

The spike in volatility came as we had outlined in Monday’s Insider, however, this ETN failed to take full advantage given its more conservative long-short approach. The Volatility Index climbed higher throughout the week after a string of worse-than-expected economic reports rekindled fears over the health of the domestic recovery. XVIX managed to dip below our outlined stop-loss at $23 a share on Friday, leaving us with a 1.5% loss on the week.

ETFdb Portfolios

Retirement ETFdb Portfolios

Given the growing uncertainty on Wall Street, it’s no wonder that our Low Volatility Portfolio managed to come out on top amidst the turbulent trading. Not surprisingly, our equity-heavy Aggressive portfolio came in last place for the week as stocks broadly gave into profit taking pressures [see All Portfolio Returns].

ETFdb Portfolio Weekly Return
Low Volatility 0.11%
Ready To Retire -0.23%
5 Years Til Retirement -0.37%
10 Years Til Retirement -0.50%
Cheapskate -0.50%
Moderate -0.51%
20 Years Til Retirement -0.58%
30 Years Til Retirement -0.59%
Aggressive -0.68%

Regional ETFdb Portfolios

Our regional portfolios held their ground quite well considering the wave of risk aversion that swept over Wall Street. It’s a bit shocking to see our Emerging & Frontier Markets portfolio in positive territory during an otherwise dismal trading week for developed markets. The two worst performers for the week were the BRIC-or-Bust and Easy-As-ABC portfolios.

ETFdb Portfolio Weekly Return
Emerging & Frontier Markets 0.07%
LatAm-Centric 0.01%
Africa-Centric -0.09%
Global Titans -0.12%
Ex-Europe -0.46%
Ex-U.S. -0.62%
Euro Free Europe -0.76%
Asia-Centric -0.96%
Easy-As-ABC -0.98%
BRIC-or-Bust -1.22%

Themed ETFdb Portfolios

Demand for bonds climbed as clouds of uncertainty swept over equity markets, paving the way higher for our Better-Than-AGG Total Bond Market portfolio. Our Socially Responsible and Actively-Managed portfolios also ended up in green territory thanks to their unique investment strategies. Gold failed to take on safe haven demand and the precious metal crept lower all week, dragging down the GLD-Free Gold Bug portfolio into red territory.

ETFdb Portfolio Weekly Return
Better-Than-AGG Total Bond Market 0.18%
Socially Responsible 0.17%
Actively-Managed 0.07%
Greedy When Others Are Fearful -0.03%
Alpha Seeker 2.0 -0.19%
Ben Graham 50/50 -0.24%
Cheapskate Hedge Fund -0.27%
Pure Growth -0.27%
High Tax Bracket -0.30%
The Sky Is Falling -0.37%
King Dollar -0.42%
Baby Boomers -0.44%
High Yield -0.46%
2012 ETFdb Portfolio -0.49%
AlphaDEX -0.54%
Kitchen Sink -0.54%
Small Cap -0.54%
Financials Free -0.58%
Simple (But Effective) Safe Haven -0.58%
Equal Weight -0.62%
Commodity Guru -0.67%
Pure Value -0.69%
High Tech -0.87%
Energy Bull -1.33%
Black Swan Hyperinflation -1.51%
Futures Free Commodity  -1.51%
RAFI -1.53%
GLD-Free Gold Bug  -2.09%

Disclosure: No positions at time of writing.