There are two changes to the iShares Tactical Model (ISHRTACTICAL) this week: sell the iShares US Regional Banks ETF (IAT) and buy the iShares COMEX Gold Trust (IAU) and sell the iShares US Core Bond ETF (AGG).  

AGG was sold because the S&P 500 (SPX) reversed up against AGG on its 3.25% relative chart, showing short-term relative strength for US equities over fixed income. AGG had a 30% weighting in the portfolio, with its removal the portfolio will be absorbed by the remaining holdings, which be rebalanced to equal weighting.

IAT was sold because its rank in the model’s relative strength matrix fell below the threshold to remain a holding in the model. In its place, the model added IAU as it was the highest-ranking fund in the matrix that was not already in the portfolio.  IAU currently has a favorable 4.92 fund score, which is 0.58 points better than the average for all precious metals funds. On its default chart, IAU has completed seven consecutive buy signals and sits one box away from reaching a fresh all-time high. Year-to-date (through 5/7) IAU has gained 28.49%. In addition to IAU, the model also has exposure to software, the S&P 500, aerospace & defense, broker dealers & securities exchanges, industrials, insurance, and consumer discretionary. Year-to-date (through 5/7) ISHRTACTICAL is down -1.68% on a price return basis, while SPX is down -4.26%.

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.

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: There are two changes to the iShares Tactical Model (ISHRTACTICAL) this week: sell the iShares US Regional Banks ETF (IAT) and buy the iShares COMEX Gold Trust (IAU) and sell the iShares US Core Bond ETF (AGG).