As of this date, market internals as reflected in the ETF momentum rankings have weakened. SPY is the strongest of the eleven basic asset classes that the system ranks. SHY, the cash equivalent, is ranked second highest.

Generally, anything weaker than SHY is ruled out by the selection process. If the selection choice were only among these basic asset classes, only SPY would receive new investment dollars. Other portions of the portfolio would go to cash. However, that is not the selection pool from which ETFs are selected. The point to be made is that only the broad US asset class passed the hurdle at this testing. Other sub-sections of US did not. Nor did any International or inflation-hedge classes.

The point is made only as a warning. Recent market volatility and these rankings suggest caution. My intent is to pare back some in stocks/ETFs until the rankings (a reflection of market internals at least among broad categories of ETFs) appear more favorable. You will be apprised if/when that happens.

The momentum-ranking system will still select individual ETFs among the weaker asset classes. June selections will be available to Premium Members prior to trading on the first trading day in June.

Note: I had hoped to have incorporated the Trading To Armageddon site into this site by now but site issues and a host of other nuisance items prevented the changeover this month. In the meantime, Premium Members should continue to consult the other site to obtain the selections and premium commentary.

With the changeover, new features will be coming for Premium Members. Broader and more in-depth market analysis will be provided. A Live Chat feature where members can talk among themselves and directly with Monty will be implemented. If there is interest, a bulletin board can begin where members can form groups, do joint stock/ETF analysis, provide recommendations and opinions, etc. Members. 

My intent is to drive the Premium Investing section of the new Monty Pelerin’s World to at least equal to the appearance and appeal of the Economic, Political and Financial commentary that has been received so well. If I can vanquish the haunting computer/software trolls which have been at me in force, I think this could happen quite quickly. Where is a geeky 15 year old when he is most needed?

continue article at EconomicNoise.com:

http://www.economicnoise.com/2013/05/29/stock-market-texture-weakening/