Financials Provide A Last Minute Boost

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[Chart courtesy of]
  1. Moving the Markets

It’s been no secret that the post-election rally hit a speed bump with the S&P 500 having moved within a 4 point range, on a closing basis, for the past 2 weeks. Anxiety continues to prevail as to whether Trump can really deliver on his campaign promises.

Retail shares were the anchor weighing on the S&P and Nasdaq early on but the financials (+0.8%) proved to be the savior of the day pushing the indexes up late in the session. Giving the assist was Fed chair Yellen opining in a speech that it “makes sense” to gradually lift interest rates. However, the Dow closed at 2017 lows pulled down by Healthcare and telecommunications.

The higher rates theme shifted things into reverse with the dollar rallying, after taking a drubbing over the past few days, while the winner year-to-date, gold, retreated. Bonds closed lower as interest rates rose. I expect this sideways pattern to continue until Trump has been inaugurated this Friday. Next week, with the election soap opera finally behind us, we may hopefully see better directional clues for the market. The big unknown is whether it will be up or down.

  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) hardly changed as the sideways trading pattern continued for the second week.

Here’s how we closed 1/18/2017:

Domestic TTI: +1.57% (last close +1.55%)—Buy signal effective 4/4/2016

International TTI: +3.84% (last close +4.07%)—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.

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