Major Indexes Sag As Tax Reform Acrobatics Continue

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  1. Moving the Markets

The major indexes sagged as uncertainty about the tax reform tug-of-war continued to take center stage. Not helping matters was a dive in crude oil along with weakness from heavyweights Apple (AAPL) and Boeing (BA).

But the stock that really took a spanking was GE (-5.89% for the day) after cutting its dividend by 50% yesterday. If you think that was bad, GE has now lost -43.4% YTD in a year were bulls ruled and the Dow climbed +18.5%. So much for putting too much credence into the payment of dividends!

Despite red numbers in the major indexes, we saw some green ones in ETF space. Aerospace & Defense (ITA) resisted the southerly trend along with, ironically, the Dividend ETF (SCHD) with modest gains of +0.15% and +0.12% respectively. On the downside, Emerging Markets (SCHE) led with -0.69% followed by Transportations (IYT) with -0.28%.

Interest rates retreated with the 10-year yield dropping 2 basis points to 2.38%, which allowed the 20-year bond (TLT) to recapture some of its recent losses by rallying +0.68%. The High yield bond ETF (HYG) was not so lucky and lost another -0.43%, which brought the price down to levels last seen in August.

Not to be outdone, the US Dollar (UUP) did a swan dive, gapped down -0.69% and is now honing in on a break of its 200-day M/A to the downside.

  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) slipped a tad as the trend was mixed.

Here’s how we closed 11/14/2017:

Domestic TTI: +2.94% (last close +3.02%)—Buy signal effective 4/4/2016

International TTI: +5.45% (last close +5.45%)—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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