These 17 ETFs Indicate Risk Of A Stock Market Correction In The Second Half Of 2017


In the “flight to safety” categories the treasury bond ETF traded to a new 2017 high despite rate hikes by the Federal Reserve. The utilities ETF set its all-time high on June 2, which was a test of my semiannual risky level of $54.29, where investors were advised to reduce holdings. A dividend yield of 3.24% was just not compelling enough.

In the “markets” ETFs, Diamonds was the only ETF to set a new all-time high last week, as the Dow Jones Industrial Average set its all-time intraday high of 21,535.03 on June 20. The QQQ’s regained some momentum as the Nasdaq is the best performing of the five major U.S. equity averages, up 15.9% year to date.

Among the “11 S&P Sectors” ETFs, the energy sector ETF set its post-election low on June 21 as crude oil tested my semiannual value level of $43.04. It’s not the time to bottom-fish on the energy ETF, but it’s time to add to positions in components and Dow Stocks Chevron CVX and Exxon Mobil XOM for their dividend yields of 4.11% and 3.80%, respectively. The strategy was to sell the utilities ETF near its high, and to buy the oil giants and “Dogs of the Dow” near post-election lows.

Consumer spending represents nearly 70% on the economy and both the consumer discretionary and consumer staples ETFs now have negative weekly charts.

The health care ETF set an all-time intraday high last week as health insurers rallied on Senate progress on plans to repeal and replace Obamacare. In addition, a rebound in momentum stocks kept the tech sector ETF overbought.


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