Wall Street flat as market brushes off Europe concerns – RSI picks AMJ & XLI

Major U.S. stock indexes were little changed in a low-volume session on Wednesday, but some investors were encouraged to see equities avoid a sell-off amid lingering euro zone's debt problems.

Indexes held on to the previous day's large gains even as the euro dropped sharply against the dollar. Notably, U.S. banks held up well, even though bad news in Europe centered around the difficulties for some European lenders.

The once-tight relationship between the S&P 500 and the euro continues to fray. The 50-day correlation coefficient between S&P e-mini futures and the single currency fell to 0.22, its lowest since mid-September. A perfect correlation score is 1; a score of 0 indicates no correlation.

The Dow Jones industrial average gained 21.04 points, or 0.17 percent, to 12,418.42. The S&P 500 Index edged up 0.24 point, or 0.02 percent, to 1,277.30. The Nasdaq Composite dipped 0.36 point, or 0.01 percent, to 2,648.36. (commentary & photo courtesy of Reuters)

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The RSI portfolio was down today with losses of -1.0% and more in ZROZ, TLT, and IYR. These were the risk off positions. On the plus side, the home builder fund, XHB turned in a +1.2% gain, but the losers outnumbered the winners almost 2 to 1.

With that behind us, let’s look forward to RSI’s latest picks:

• Buy JPMorgan Alerian MLP Index ETN (AMJ); yield = 5.17%
• Buy Industrial Select Sector SPDR (XLI); yield = 2.03%

AMJ is a fund that replicates an index that follows midstream energy MLPs. It pays a great yield and it has been on a tear since early October. I would wait for a dip to buy.

XLI has been performing quite well and outperforming the overall market since mid September 2011.  I would like to see the Accum/Dist pick up (the Magenta line) which indicates an increase in investor interest.

I hope you had a happy holiday week.