There are changes to two iShares models this week. The iShares Tactical Model ISHRTACTICAL removed the iShares NASDAQ Biotech ETF IBB and added the iShares Silver Trust SLV. The iShares Sector Rotation Model also sold the iShares NASDAQ Biotech ETF IBB.

IBB was removed from ISHRTACTICAL because its rank in the model’s relative strength matrix fell below the threshold to remain a holding in the portfolio. In its place the model added SLV as it was the highest-ranking fund in the model matrix that was not already a holding in the portfolio. This is the eighth change to the model this year. SLV currently has a strong 5.10 fund score a positive 3.09 score direction. On its default chart, SLV has given four consecutive buy signals, most recently breaking a double top at $26. SLV has most recently found support at three levels between $21.50 and $24.

In addition to SLV, the model now has exposure to software, consumer services, oil & gas exploration, oil equipment & services, medical devices, home construction, and semiconductors. Year-to-date (through 8/26) ISHRTACTICAL is up 14.79% vs. the S&P 500 SPX which has gained 7.67%.

ISHRSECT utilizes a relative strength versus benchmark methodology which compares each of the funds in the model universe against the iShares Dow Jones US ETF IYY. Those funds showing near-term relative strength against the benchmark (i.e. are in a column of Xs) are included in the portfolio and are removed only when they show weakness relative to the benchmark. When an addition or deletion is made, the portfolio is rebalanced so each position is equally weighted. IBB was removed from the portfolio because it reversed down into a column of Os on its relative strength chart against IYY, demonstrating short-term relative weakness. Year-to-date, ISHRSECT has gained 9.83%.  The full model holdings can be seen below.

This section of the report categorizes select iShares Fixed Income and Currency ETPs by their respective fund groups. Along with each group, you can view the Average Group Score, which is an average of the scores of all funds represented in that particular group. Those iShares ETFs that meet or exceed the Average Group Score will be highlighted in green in order to easily view those ETFs that have superior strength within their respective group. You want to focus on those ETFs that exhibit superior strength when looking to add new exposure to a particular group.

The distribution curve places each ETF on a bell curve according to their respective degrees of overbought or oversold status using a 10-week distribution. ETFs that are statistically oversold will appear on the left-hand side of the bell curve, while those that have become statistically overbought will appear on the right-hand side of the bell curve. Perhaps the most useful attribute of this feature is that it displays the entire universe on the curve at one time with an "average level" to give us a general picture of whether the iShare ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong market ETFs that have regressed back toward mean conditions based on market weakness, or have become oversold based upon extreme market weakness. 

Weekly Distribution is a short-term gauge that is most helpful in timing entry and exit points, while the longer-term information of trend and relative strength is a more controlling factor in the decision of whether to buy or sell. The Distribution Curve below displays those ETFs with positive RS in uppercase letters and those ETFs with poor RS versus the market in lowercase letters. As well, those ETFs that are on a Point & Figure Buy signal appear in Green letters, while those on Sell signals can appear in Red letters. Box Color indicates the Sector Status Rating. Green = Favored, Yellow = Average, and Red = Unfavored.

Average Level

46.50

									IHE
									enzl
						iat			gsg
						ige			iym
						ITA		IJH	IHI
						jxi		epol	ewl
						ews		ewh	eis
						erus		ewa	kxi		IVV
						ewp	ewu	iyz	eido		iyt
						ewm	eza	epu	ewy		SLV
						icf	eufn	epp	ewn		IYY
				ewz		ewo	iyg	ewq	SOXX	ewd	ixp
				IBB		igf	ewk	IAU	ewt	exi	IYC
				emif		dvy	IXJ	ewj	eem	ewc	IXN
				ech		ign	ewi	iev	bkf	IGV	wood
				ilf	ixc	eww	ixg	efa	mxi	indy	RXI
				ieo	idu	iak	IAI	fxi	ewg	eems	iyk
		tur		thd	iez	ihf	IJR	ezu	IYJ	ITB	icln
<--100	-100--80	-80--60	-60--40	-40--20	-20-0	0-20	20-40	40-60	60-80	80-100	100->

This section of the report categorizes select iShares ETFs by their respective broad group. Along with each group, you can view the Average Group Score, which is an average of the scores of all funds represented in that particular group. Those iShares ETFs that meet or exceed the Average Group Score will be highlighted in green in order to easily view those ETFs that have superior strength within their respective group. You want to focus on those ETFs that exhibit superior strength when looking to add new exposure to a particular group.

Weekly Updates: The iShares Tactical Model ISHRTACTICAL removed the iShares NASDAQ Biotech ETF IBB and added the iShares Silver Trust SLV. The iShares Sector Rotation Model also sold the iShares NASDAQ Biotech ETF IBB.