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Buyback Shares Index: Beware of the Buyback Blackout Period?
March 28 2016 ( From Tradingview, FACSET, Bloomberg )

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The Situation

One of the most unintended consequence that the FED kept rates so low
so long was that US corporations did borrow tons of money by issuing
corporate bonds to buyback their own shares.

That did help tremendously the US Stocks Market in terms of performance
since the last Financial Crisis on both ways:
1) The buybacks was a short term bull support for the market
2) Retrieving so many shares improved EPS going forward

So one of the most re-leveraging process from US corporations since the financial crisis have been to sell bonds to buy back their own shares. And it is getting into non sense as Spending on Buybacks for 147 companies Exceeds Free Cash Flow for SP500 corporations according to FACSET.

As we re getting into the Blackout Period for Buybacks, shares that performed well lately will be at risk during that period (Firms accounting for the majority of buybacks in the S&P 500 will report earnings from April 13 to April 27 - Bloomberg)

We will have a look a the PKW ETF ( PowerShares BuyBack Achievers Portfolio ) performance based on the
NASDAQ US BuyBack Achievers™ Index compare to US Stocks Indices.

Let s look at the Relative Performance of PKW ETF to the SPY ETF (Ratio of PowerShares BuyBack Achievers Portfolio over the Mighty SP500 ETF SPY SPDR ). As we may see on the chart below, PKW ETF Relative Performance peaked in April 2015 and is underperforming tremendously and trading within a downtrend channel as shown by the chart below.

Last 2 years, during the Blackout period, the top 100 shares buyback underperformed the Mighty SP500 Index (SPY ETF). (See chart below - Ellipse)

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Buyback Shares Index:Beware of the Buyback Blackout Period? $SPY, $SPX, $ES_F #Trading #Nasdaq #SP500

Daily RATIO
PKW ETF ( PowerShares BuyBack Achievers Portfolio )
over
SPY ETF ( S&P 500 ETF )
20 DMA ( Yellow Line )
50 DMA ( Red Line )
200 DMA ( Green Line )

Financialiceberg.Com

As the PKW is based on the NASDAQ US BuyBack Achievers™ Index, let s look also on a Relative Performance of PKW ETF to the QQQ ETF ( Ratio of PowerShares BuyBack Achievers Portfolio over the NASDAQ 100 Index ETF ). As we may see on the chart below, PKW ETF Relative Performance peaked in April 2014 and is underperforming tremendously since then and also within a downtrend channel.

Daily RATIO
PKW ETF ( PowerShares BuyBack Achievers Portfolio )
over
QQQ ETF ( NASDAQ 100 Index ETF )
20 DMA ( Yellow Line )
50 DMA ( Red Line )
200 DMA ( Green Line )

Daily RATIO
PKW ETF ( PowerShares BuyBack Achievers Portfolio )
over
SPY ETF ( S&P 500 ETF )

Financialiceberg.Com

But the most interesting technical factor is that on a Relative Performance of PKW ETF to the SPY ETF, it did already break the Major Support Trendline that started back in 2008 in July 2015 as shown by the chart below.

Read Also:
How Important Is The Coming Buyback Blackout Period For Stocks?

Buyback Blackout Leaves U.S. Stocks on Own Prior to Earnings

These stocks are most vulnerable to the buyback ‘blackout’