Aug 25 was the last Friday in August. Hence, it is a trade day Friday.

For backtesting purposes, trade day Fridays are assumed bought. Non trade day Fridays are reported each week although the results are not followed. Although never tested, there should be no reason why any Friday should be preferred over another.

Trade Day Friday Rankings

Rankings are based on close of markets on Friday. Backtesting results are predicated on sell the exiting position(s) on Monday opening and purchasing the highest-ranked ETFs on Monday’s open.

Trade Day Friday rankings appear in column WkB0 (“week back zero” which represents the current ranking). Wkb1, 2 etc. represent rankings one, two and more weeks ago.

Trade Day Friday — Aug. 25, 2017

Commentary

Using the Table

The color codes in the table help to assess the stability of markets. The first column shows that various shades of green are used to classify the top 12 ranks. Although not shown in Wkbk0, white is used for rankings from 13 – 25. Thereafter, various shades of light pink to dark red are used.

Stability

Of note is that the highest three ranked ETFs have not changed for four consecutive weeks (although there has been some shifting within these rankings. Even five weeks ago, the top three were strong.

Composition

The three top funds are International, with two of those representing emerging markets. In fact, five of the top six are international with only SHY, a short-term bond fund, being an exception. There is not a US stock-oriented ETF in the top six. Nor has there been one for the last three weeks of rankings.

Conclusions

Several weeks back the composition of the market was noted as shifting away from the US. That is reflected now in the latest rankings. I take this to mean to continue to be very cautious regarding markets in general and the US in particular. Frankly, if the US markets tank, it is unlikely all others will not be drawn under from their wake.

Items 7 – 11 show nice trends in their rankings. Three of these, GLD, GDX and XLU, generally indicate safety moves. Keep an eye on these because their strength usually signals market fear or weakness.

Caution is still the watchword in my opinion.

September and October are generally considered dangerous months for the stock market (unless you are Mark Twain who considered them all dangerous).