3 ETFs that define the market's emotions

The ETF Yourself Tuesday Finale

Photo by Oleg Moroz on Unsplash

Last week, I wrote a lot on Tuesday, and wrote enough to fill a book on Wednesday. I have 3 key charts to show and tell about. But first, a final reminder about how we are consolidating our research and communication efforts, so no one is confused about what our posts will look like, and where they will come from, starting in a few days.

• As detailed last week, we are centralizing all of our content…on ETFs, stocks, options, macro, all of it…over on our SungardenInvestment.com site.

  Each Tuesday, what will soon be known as “Sungarden Weekly” will replace what has graced this space for the past year. The paid service through that site is now known as "Sungarden Investment Research Group” or SIRG for short.

• ETF Yourself continues as we described last week. The 7-ETF portfolio is being “retired” (more on that below) and the CORE ETF portfolio is replacing it. As we see it, that alone justifies the price increase in ETF Yourself that goes into effect on October 1, about 5 weeks from now. But there will be much more in that service, too. We should start unveiling it later this week and early next week.

• So if you are a free subscriber at the other site, next Tuesday you will start to get that weekly post, the main free content I’m putting out from here forward. We’ll continue to share a slice of the paid content publicly, and I have some free special reports coming that I think our followers will really enjoy. Our ETF and stock research is getting into high gear, as you’ll see. That’s the driver of these changes.

• ETF Yourself will now function primarily as a place to purchase that service. This was what we did to accommodate the Substack platform limitation whereby our $300/month service and our $125/month service (both with a 20% discount for a 12-month subscription) cannot “live” on the same site.

• Tomorrow, we’ll announce a series of live events. However, these will be for paid subscribers only. As I mentioned last week, my strength and skill set lends itself to a more niche audience. Depth, breadth and collaboration, rather than another mass-market service.

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This week, given the pending adjustments to our service, we thought we’d skip the paywall and make good on that title: 3 ETFs that define the market's emotions. Check out these charts:

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How big could this US Dollar decline story get? Pretty dang huge! Right now it is risk. Unrealized risk. Like unrealized return: the Dollar is slipping but the downward move has not truly “cashed in” yet. I keep seeing signs it could. Profiting off of it, beyond the little option trading stuff I do on the side, is not yet clear. If we’re looking for a reason that September and October could be like some of those past nightmares, I think the culprit starts here.

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Yet with the stock market potentially set up to be “risk off” if the US Dollar goes from weak to worse, here’s the biggest equity ETF position I currently hold in the CORE portfolio, knocking on the door of a new high. I first bought it back on March 7 of this year. It survived the August flash-crash thing, continuing higher throughout most of it. It is up 16% since that purchase, while the S&P 500 is up less than 10%. That is not a sign of a sustained “broadening” of the stock market beyond mega-cap tech. But it could be the start of one. Key resistance ahead.

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We talk so much here about the 10-2 US Treasury spread, the most reliable recession indicator of the past 75 years. But recession, reschmession! We just want to make money and not lose it. So it is worth noting that, year to date, these ETFs that represent the current 2-year and 10-year Treasury securities are even-Steven. But they took very different routes to get there.

I see more evidence that the short-term part of the yield curve will begin to slide faster than the long end does. Translation: the yield curve will likely un-invert during Q4, if not sooner. For investment purposes, that could continue to benefit the CORE portfolio and any other portfolio that has a chunk of assets in short-term Treasuries. Because, other than T-bills,

there is not only still decent yield here, but some lower-risk price appreciation potential too.

See you over at SungardenInvestment.com!