Today we have a change in the SSTREETGLOSECT Model: Sell XME, Buy KBE. We also have a change in the SSTREET Model: Sell XME.

The first change this week comes from the State Street Sector Model SSTREET.  The SPDR S&P Metals and Mining ETF XME has been removed from the Model after reversing down into O's versus the SPX on its RS chart.. This Model is designed to target exposure to the State Street sector ETFs that are demonstrating positive Relative Strength versus the S&P 500 Index SPX. Each week we monitor 31 Relative Strength charts for each ETF in the Model's universe versus the SPX. XME had been a holding in the SSTREET Model since 2/9/2016. Since being added, XME posted an impressive gain of 99.23% while the SPX was up 29.41% (through 5/9/2017). The SSTREET Model was up 32.62% over the same time frame. Looking at the trend chart of XME below, we find that after hitting a new 52 week high in February at $35, the chart pulled back significantly and gave three consecutive sell signals, with the most recent being a triple bottom break at $28.50. Additionally, it has seen considerable deterioration in its fund score which is now 3.86, with a score direction of -2.12. As a result of this change, the SSTREET Model has 17 holdings equally weighted at 5.88% each.

The second change this week comes from the State Street Global Sector Rotation Model SSTREETGLOSECT. As a refresher, the SSTREETGLOSECT Model is made up of five holdings, each of which is selected from a universe of both domestic and international sector funds. The ETFs within the Model universe are compared to one another using a relative strength matrix. The top five sector funds are bought and are only sold when they fall sufficiently out of favor versus the other sectors on a relative strength basis. With the most recent action, the SPDR S&P Metals and Mining ETF XME deteriorated enough in strength relative to the rest of the potential Model holdings to warrant its removal from the Portfolio. In its place, the SPDR S&P Bank ETF KBE has been added as it is the highest ranked ETF not already held by the Model. XME was added to the Model on 8/19/16 and was up 5.21% while the Model itself was up 10.52% (through 5/9/17). The Model benchmark, the MSCI World ex US Index MSCIWORLDXUS, was up 8.54% during the same time frame. Looking at the chart of KBE, we find that is trading well above its bullish support line and has a strong fund score of 5.07, speaking to its strong relative strength and trending characteristics. KBE has given two consecutive buy signals, confirming that demand is in control. With the most recent action, the chart has exhaled slightly to $42.50, offering investors an attractive entry point with support coming at $41. The SSTREETGLOSECT Model has five positions equally weighted at 20% each. 

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: 32.33

The average Bullish Percent reading this week is 58.01% down 1.86% from the previous week

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