Wall Street Bets On Trump

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

Last week’s upward momentum showed no signs of letting up as the rally continued today with the major indexes adding over +0.5%. The conviction is that Trump’s promised tax cut will be a boon to the economy. While that may be true, the open question as to not only its feasibility, but also its timely implementation, remains the big unknown. As usual, hope and reality are very much disconnected on Wall Street.

Nevertheless, the bulls are in charge and Trump has been working more like a business executive rather than a politician by reaching out to influential world leaders by phone, while concurrently holding high profile meetings with executives ranging from automakers to technology companies.

While economic data points appear disconnected from the stock market, the S&P 500 companies are on track for their best profit growth in 9 quarters. On deck is Fed chief Yellen’s annual testimony on Capital Hill tomorrow and Wednesday, which hopefully clarifies interest rate policy as it is uncertain whether more hikes during 2017 will actually materialize.

  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) headed north as Trump’s efforts are continued to be viewed as a positive influence on the markets.

Here’s how we closed 2/13/2017:

Domestic TTI: +2.56% (last close +2.42%)—Buy signal effective 4/4/2016

International TTI: +5.13% (last close +4.81%)—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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