There is a change to the PowerShares Sector 7 ETF Model as PSAU (Precious Metals) is being replaced by PSI (Semiconductors).

In January of this year the Precious Metals Sector was among the best performance sectors in the market, and had seen quite a bit of improvement on a relative strength basis, enough so to cause this sector to become a Favored Sector. As well, the PowerShares Global Gold and Precious Metals ETF PSAU moved up the rankings of the relative strength matrix of PowerShares Sectors to overtake the top spot. The improvement within this sector causes PSAU to move into the PowerShares Sector 7 Model POWER7 in January 2015. However, over the past couple of months PSAU has not been able to show any follow through on the upside, but has actually deteriorated on both a trend and relative strength basis. Therefore, this week PSAU is being removed from the PowerShares Sector 7 Model, and the PowerShares Dynamic Semiconductor ETF PSI is being added in its place.

Despite falling 18% over the past couple months while PSAU was a member of the PowerShares Sector 7 Model, the model continues to show strong returns on a year-to-date basis with a positive return of 5.57% versus a return of -0.27% for the S&P 500 SPX. In addition to PSAU falling down the ranking of the relative strength matrix for PowerShares Sectors, the trend chart of PSAU has also entered into a negative trend earlier this month with the move to $17. Lastly, the overall technical fund score of PSAU has dropped below 2. On the other hand, PSI presents a strong technical picture, which can be seen in the fund score of 5.94, and currently ranks within the top 5 of the PowerShares Sector ETF Matrix. The trend chart of PSI continues to trade above the bullish support line, and thus in an overall positive trend. Just this month PSI has moved to a new high at $28, and the price objective of $39.75 suggests there is more potential upside from here. So, this week PSI is replacing PSAU in the PowerShares Sector 7 ETF Model. For a complete list of the holdings of the model please see the PowerShares Modelssection of this report.

* - Dates prior to 1/24/2011, which is when the PowerShares Sector Seven ETF Model Portfolio became available in the PowerShares Weekly ETF Report, are representative of when the position was added to the backtested model.

* - Dates prior to 6/1/10, which is when the PowerShares Small Cap Sector Model ETF Portfolio became available in the PowerShares Weekly ETF Report, are representative of when the position was added to the backtested model.

* - Dates prior to 6/7/13, which is when the DWA Global Technical Leaders Portfolio became available in the PowerShares Weekly ETF Report, are representative of when the position was added to the backtested model.

This portfolio is designed to be used as a "radar" screen to bring your attention to potentially important technical changes that may require your attention and potential action. Below this week's featured portfolio is the ability to see other PowerShares portfolios including Market, Sector, International, Dynamic family, and RAFI family. 

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 to give us a general picture of whether the PowerShares ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong relative strength 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.

Average Level: -6.81

							PRN
						PSJ	adra
				pie		PXMV	PBJ
				pey		phb	PWC
				adru		PXMG	PSL
				paf	pzt	KBWD	PZI
			pagg	plw	PHO	PYZ	DBV	PTF
			pxh	pvi	pgx	PXMC	PXSC	pbd
			PSR	pwz	adrd	piz	PEZ	psi
			KBWY	pid	pgf	PKW	PRFZ	pbw
			dbc	PFM	PRF	psp	PXSG	PEJ
	dba	psau	pcy	dbo	puw	PNQI	pzd	PBE
	DGL	dbs	pgj	dbe	pbp	PPA	PDP	PXQ
UDN	DBP	adre	pxj	pio	pxf	PFI	PBS	pkb	PTH
picb	PUI	pxr	pza	dbb	PXI	pdn	PWB	PMR	PJP		UUP
	-100--80	-80--60	-60--40	-40--20	-20-0	0-20	20-40	40-60	60-80	80-100	100->

Legend:

• UPPERCASE indicates that the RS chart is on a buy signal.
• lowercase indicates that the RS chart is in a sell signal.
• GREEN lettering indicates the ETFs trend chart is on a buy signal.
• RED lettering indicates the ETF is on a sell signal.