There are no changes to be made within any of the Dorsey Wright State Street Models this week, as each of the current holdings continue to maintain positive relative strength within their respective universes. Today we review Q4 and 2016 performance for the State Street Models. 

4th Quarter 2016 Review

The State Street Sector Rotation Model SSTREET experienced nine changes throughout Q4 while the State Street Fixed Income Model SSFIXED experienced two. Both the State Street Global Sector Rotation Model SSTREETGLOSECT and the State Street International Sector Rotation Model SSINTLSECT experienced one change over the final quarter of 2016 while the State Street Global Rotation Model SSWORLD did not experience any changes.

The State Street Sector Rotation Model SSTREET experienced a whopping nine changes throughout the fourth quarter, with the Model adding exposure to the following sectors: Banks KBE, Regional Banking KRE, Oil & Gas Equipment & Services XES, Financials XLF, Telecom XTL, and Transportation XTN. The Model continues to remain allocated towards those ETFs within the universe which demonstrate superior relative strength to the broad market.  The Portfolio itself was up 1.77% in Q4 (vs. 3.25% for the S&P 500 Index SPX). The Model posted a gain of 10.47% for 2016, beating the SPX which was up 9.54%.

The State Street Global Rotation Model SSWORLD did not experience any changes over this past quarter and maintains its exposure to the SPDR S&P 500 ETF Trust SPY, the SPDR S&P Russia ETF RBL, and the SPDR MSCI EAFE StrategicFactors ETF QEFA. The Model was up 4.55% this quarter, compared to the return of  -3.04% for its benchmark, the SPDR MSCI ACWI ex-US ETF CWI.  SSWORLD posted a gain of 5.96% for 2016 compared to 2.24% for the benchmark, CWI.

The State Street Global Sector Rotation Model SSTREETGLOSECT experienced one change in Q4, with the Model adding exposure to Technology (MTK) while removing exposure to Consumer Discretionary (XLY) in late October. The Portfolio itself was up 7.50% in Q4 versus -0.71% for the benchmark, the MSCI World ex US Index MSCIWORLDXUS. Over 2016, the Model was posted a gain of 14.75%, compared to MSCIWORLDXUS which was flat at -0.13%.

The State Street International Sector Rotation Model SSINTLSECT had one change last quarter which was to buy the SPDR S&P International Technology Sector IPK and sell the SPDR S&P International Health Care Sector IRY. The Model finished the quarter in the red, down -4.17% while the benchmark, the SPDR MSCI ACWI ex-US ETF CWI, was down -3.04%. The Model finished the year down -3.45% while CWI posted a gain of 2.24%.

Finally, the State Street Fixed Income Model SSFIXED experienced two changes throughout the fourth quarter. The first change came in early November which sold the SPDR Bloomberg Barclays Long Term Treasury ETF TLO and purchased the SPDR Bloomberg Barclays High Yield Bond ETF JNK. The second change sold the SPDR Bloomberg Barclays Emerging Markets Local Bond ETF EBND and bought the SPDR Bloomberg Barclays Intermediate Term Credit Bond ETF ITR. The Model posted a loss of -5.13% in Q4 while the iShares US Core Bond ETF AGG was down -3.88%. For 2016, the Model posted a loss of -0.55% while the AGG was flat at 0.05%.  

The performance numbers above a price return is not inclusive of dividends or all transaction costs. Past performance is not indicative of future results.  Potential for profits is accompanied by possibility of loss.

Like a radar screen, the Weekly Activity Summary gives you a snap shot view of any technical changes to the State Street universe of ETFs. Included in the summary below are both long term technical changes and intermediate term technical changes.

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 State Street 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. 

Average Level: 18.68

The average Bullish Percent reading this week is 60.25% down 0.06% from the previous week

							irv
						gml	rwo
						xph	IRY
						gii	xme
						ist	XAR
						ipf	RWR	SRLN
						ipn	SPYG	XLI
						XLP	XLB	ipk
					XBI	XHE	ipd	MDYG
					ipe	dwx	XHS	kce
				ibnd	mbg	GWL	XLK	ONEK	fez
				psk	FLRN	XLY	jnk	XLE	xes
				gmf	XRT	acim	SDY	THRK	jpp
			bwz	tlo	gmm	gaf	XTN	SLYV	DGT
			GLD	wip	iny	XHB	XSD	ipw	bik
			tfi	itr	XSW	cwi	xop	SPY	SPYV
			ite	ewx	lwc	XLU	jsc	SLYG	gur
			gxc	IPS	bil	MTK	xtl	MDY	KIE	KBE
			gwx	scpb	ipu	XLV	SLY	feu	xlf	DIA
		bwx	shm	EBND	CWB	rwx	mdd	MDYV	KRE	embb	rbl
<--100	-100--80	-80--60	-60--40	-40--20	-20-0	0-20	20-40	40-60	60-80	80-100	100->

The DWA Matrix uses a Point & Figure relative strength comparison of each index to one another to identify the strongest and the weakest among the universe used. The ETFs with the most relative strength buy signals (suggesting outperformance) versus the others in the group are listed at the top. These ETFs should be overweighted in the portfolio. Those ETFs with the least amount of relative strength buy signals versus the others in the group are listed at the bottom. These ETFs should be underweighted in the portfolio.

The State Street ETF Model Portfolios are designed to identify major leadership themes within a market, doing so through the use of Point and Figure relative strength tools.  Each of the State Street Models are evaluated weekly and guided by a rules-based investment methodology. The construction of the State Street Sector ETF Portfolio is done through an analysis of the each State Street Sector ETF relative strength chart versus the S&P 500, while the Global Sector Rotation model employs a relative strength matrix ranking of the model's inventory.  In either case, those with strong relative strength make the cut and are eligible to be included in the portfolio, while those that aren't, will sit upon the sideline.  For more information on the portfolio construction and back testing please see the information files on the Models Page. To enter a portfolio amount and see shares to be purchased as well as modify the portfolio to your specifications, click here. (Note: All State Street ETF Models are updated Wednesday mornings by 9:30 am EST)

• State Street Sector ETF Model: No changes this week.
• State Street International Sector ETF Model: No changes this week.
• State Street Global Rotation ETF Model: No changes this week.
• State Street Global Sector Rotation ETF Model: No changes this week.
• State Street Fixed Income Model: No changes this week.

* - Model Inception:1/17/2007

* - Model Inception:10/15/2008

* - Model Inception:10/28/2008

* - Model Inception: 07/28/2010

* - Model Inception: 04/27/2011