Trade Day Rankings for July 2017

The trade day rankings for July are based on the last Friday in June. Theses rankings are based on the proprietary ETF momentum ranking system and are tracked in the monthly performance data.

Trade Day Rankings for July (June 30 Data)

Commentary on Rankings

ETF rankings continue to be volatile as markets churn based on geo-political risks and changing economic expectations for the domestic economy. The changing probabilities of Obamacare repeal and the potential for tax cuts make for great uncertainty. On the positive side, optimism for job growth and the future seem to offset the doubts. Whatever one thinks of Donald Trump, his “Make America Great Again” approach seems to have energized the public, perhaps beyond reason.

These conflicting conditions have driven markets to record highs although economic substance seems absent. Recent stagnation in market advances suggests that the euphoria based on expectations is cooling.

The volatility in momentum rankings reflects this unease. This volatility is reflected in the rise and fall of various ETFs over the five weeks shown in the table. The current top-ranked ETF is XLU, a very conservative ETF. It has been ranked in the top ten for the last four rankings. The next two high rankings are biotech ETFs. Biotech is notoriously volatile and hardly defensive. Current rankings reflect recent strength. Prior week rankings for the two biotech ETFs had them mostly in the bottom half of the followed ETFs.

The other top ETFs in the current top five are health care (XLV) and cash (represented by BIL). BIL has been highly ranked for the last five weeks. XLV, ranked highly the last two weeks, may be anticipating the failure of a new health care plan. That may be good for some health care stocks but does not bode well for the economy. Obamacare has been a jobs killer and now its continuation may mean a collapse of the medical care system. Further, it represents a blockage to much-needed tax reductions and the infrastructure repair that the country needs to grow again.