The Most Promising ETF’s? Russia and Coal
Posted on Thursday, May 22nd, 2008 | In Current Market News, Exchange Traded FundsMarket Vectors Russia (RSX) and Coal (KOL) remain 1-2 in this week’s sector ratings, although the order has switched. Both sectors have strength ratings over 100, indicating that they are expected to perform in the top 2% of historical ETF returns over the next month. (We have been showing the results of our sector model each week with a one-day delay. Investors interested in more details can request a free report via email — found at the top left of the page).
A Look at the Fundamentals…
The Market Vectors Russia ETF is a closet energy play, with nearly 40% exposure. Tom Lydon at ETFtrends has a nice article on the relationship between Germany and Russia, leading to more modernization. This has helped the RSX ETF.
When one wants foreign exposure, the ETF is often preferable to finding individual stocks.
On the coal front, Tom Lydon has another interesting analysis as he notes the following:
Market Vectors Coal (KOL) got
another boost on Tuesday after the International Energy Agency reported
coal will be the world’s biggest energy source for the next quarter of
a century. Since the fund’s inception on Jan. 15 this year, it’s up
30.8%.
Matthew Hougan at Seeking Alpha notes that the Coal ETF is near the top of the most successful ETF launches in 2008.
There is a lot of current debate about energy prices — speculation or fundamentals? The portfolio has significant energy exposure. It is the nature of our method, allowing the market to guide our strategy. This means a consideration of technical analysis.
...and the Technicals…
We are always interested in technical analysis of ETF’s since our model has a technical basis. Writing at Seeking Alpha, one of their featured technicians, David Fry, has some chart observations on RSX. Take a look, and also enjoy his other ETF charts.
..and finally, the TCA-ETF System
As noted, the top sectors are even stronger. Thirty-three of the fifty-one sectors in our universe have a “buy” signal, an improvement over the 27 from a week ago.
We are delighted to note the gains from two recent additions to the sector universe. We continue to entertain reader suggestions about new candidates.
Displayed below is the current ranking, along with trades closed since the last update.
Last 5 posts by Jeffrey Miller
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alpha one, coal, Current Market News, david fry, eft, Energy Prices, Exchange Traded Funds, international energy agency, market vectors russia, market vectors russia etf, RSX, sector ratings
 About Jeffrey Miller (http://www.oldprof.typepad.com)
Jeffrey A. Miller, Ph.D. is a former college professor with a hands-on, real world attitude. His quantitative modeling helped inform state and local officials in Wisconsin for more than a decade. A Public Policy analyst, he taught advanced research methods at the University of Wisconsin, and analyzed many issues related to state tax policy. In 1987 Jeff began work for market makers at the Chicago Board Options Exchange. His approach included finding anomalies in the standard option pricing models and developing new forecasting techniques. Merging these quantitative techniques with specific company analysis, Jeff also generated trading ideas from sell-side analyst reports. Through his years of experience in trading options, futures and equities, Jeff has come to be regarded as an expert in interpreting the effect of news on the markets and individual stocks. Jeff has served as a forensic expert in several cases involving such issues. He has also written a series of papers on investment management, describing both quantitative methods and those related to behavioral economics. |
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