Snapping The Winning Streak

[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

I did not expect much upside market action ahead of Trump’s speech, and that is exactly what happened. The Dow broke its 12-day record streak while all major indexes closed marginally to the downside. Not helping matters was Target’s report that profit for the quarter, including the holiday season, had fallen by an astonishing 43%. The punishment for such miss was immediate as the stock fell 12% pulling other retailers down as well.

For the short month of February, the major indexes gained with the S&P 500 sporting +3.7%, supported by hope that Trump’s promises of massive infrastructure spending, reduced regulations and tax reform will be forthcoming shortly. As I said yesterday, Wall Street will be analyzing his every word during tonight’s speech not only as to how he’s going to achieve those promises but just as importantly what the timeline will be along with how things will be paid for.

Remember, markets run on hope, optimism and euphoria. We’ll find out tonight if Trump can keep Wall Street appeased and thereby keep the rally going. Anything perception that he will not be able to deliver as promised will likely have a negative effect on market momentum.

  1. ETFs in the Spotlight (updated for 2017)

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified and sector ETFs from my HighVolume list as posted every Saturday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

The below table simply demonstrates the magnitude with which some of the ETFs are fluctuating in regards to their positions above or below their respective individual trend lines (%M/A). A break below, represented by a negative number, shows weakness, while a break above, represented by a positive percentage, shows strength.

For hundreds of ETF choices, be sure to reference Thursday’s StatSheet.

Year to date, here’s how the 2017 candidates have fared so far:

Again, the %M/A column above shows the position of the various ETFs in relation to their respective long term trend lines, while the trailing sell stops are being tracked in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point has been taken out in the “Off High” column.

  1. Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) pulled back as anxiety ahead of Trump’s speech kept the markets in check.

Here’s how we closed 2/28/2017:

Domestic TTI: +2.78% (last close +3.00%)—Buy signal effective 4/4/2016

International TTI: +4.91% (last close +5.07%)—Buy signal effective 7/19/2016

Disclosure: I am obliged to inform you that I, as well as my advisory clients, own some of the ETFs listed in the above table. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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