div xmlns=”http://www.w3.org/1999/xhtml”pWith the market treading water, it is ever more difficult to find a promising sector.#0160; Each week we use our sector model to find the best ETF#39;s and give us some insight into the overall market.#0160; Our macro look has become more negative, but there are still a few bright spots./p
pstrongOur Approach/strong/p
pWe stick to the system, studying sectors continually, looking at the charts and ratings for hundreds of ETF#39;s.#0160; Each week we provide a list of our top-rated sectors for the next three weeks, along with some of our current observations.#0160; ETF investors can check out the list and compare our findings with their own conclusions./p
pIn our analysis, we consider Trends, Cycles, and a bit of Anticipation.#0160; Since we apply the model to nearly 300 ETF#39;s, we call it the TCA-ETF system.#0160; (For new readers, there is a more complete description of our methods at the end of the article.#0160; We also have a free report with more detail on the system and results, available on request.)/p
pstrongThe Macro View/strong/p
pFrom an overall market viewpoint, our indicators continue in positive territory, although it is a close call.#0160; The key elements are as follows:/p
ul
liWe now find 89% of our ETF#39;s in positive territory (94% last week).#0160; The emstrongmedian strength /strong/emrating for the overall list is 21 (down from 25 last week).#0160;#0160; A score of quot;0quot; implies the average long-term ETF expectancy./li
li89% (up from 75%) of our sectors are in the quot;penalty box.quot;#0160; This means that they are currently disqualified from the buy list for technical reasons.#0160; You can think of this as a sophisticated quot;stop lossquot; rule, often applied in advance./li
liOur index package is neutral.#0160; For this rating we look at the ETF#39;s (both long and short)#0160; for the Samp;P 500, the Dow, and the Nasdaq.#0160; You can see these ratings is the results table for this week.#0160; While the index ETF#39;s have positive ratings, both the longs and the shorts are in the penalty box./li
/ul
pstrongSpotlight on the Internet/strong/p
pWe trade the Internet stocks via the a href=”http://www.invescopowershares.com/products/overview.aspx?ticker=PNQI” target=”_blank”PowerShares NASDAQ Intenet Portfolio/a (PNQI).#0160; The Internet group includes top holdings in the names everyone knows, with the top five constituting 45% of the fund.#0160; As we might expect, the dividend yield is zilch, the P/E ratio is a touch over 30, and the price-to-book is over 3.#0160; This is a growth story.#0160; Here is the chart./p
pa href=”http://oldprof.typepad.com/.a/6a00d83451ddb269e20120a6766c69970c-popup” onclick=”window.open( this.href, #39;_blank#39;, #39;width=640,height=480,scrollbars=no,resizable=no,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0#39; ); return false” style=”DISPLAY: inline”img alt=”Pnqi” class=”asset asset-image at-xid-6a00d83451ddb269e20120a6766c69970c ” src=”http://oldprof.typepad.com/.a/6a00d83451ddb269e20120a6766c69970c-450wi” style=”WIDTH: 450px” //a br //p
pIt is easy to see from the chart why the model has picked up this sector./p
pEric Dutram at ETF Database a href=”http://seekingalpha.com/article/168554-tech-etfs-boosted-by-microsoft-amazon-earnings” target=”_blank”highlights the fundamental support/a for the sector, citing strong earnings from Microsoft and Amazon./p
pMost of our regular ETF sources have little to say about the Internet./p
p/p
p/p
pstrongspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt”Weekly TCA-ETF Rankings/span/strongspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt” o:p/o:p/span/p
pspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt”We had a small loss last week, a bit better than the Samp;P 500.#0160; Our current holdings are still not near the top in strength rank, but they still have good ratings.#0160; Our testing has shown what Vince calls quot;robustquot; results for anything with a positive strength rating.#0160; We do not buy ETF#39;s in the penalty box or those with poor liquidity.#0160; We provide these ratings as information for readers who may not trade as frequently as we do.#0160; Those signing up for our free weekly email update can also get the entire list./span/p
pspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt”As noted above, the macro market indicators are in the penalty box, and most other ETF#39;s are in the penalty box.#0160; Based upon the current /spanspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt”model signals, we have shifted our marginally bullish position to neutral in the a href=”http://tickersense.typepad.com/ticker_sense/” target=”_blank”span style=”COLOR: blue”Ticker Sense Blogger Sentiment poll/span/a./span/p
pspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt”Here are the top sectors from our expanded universe of 280 ETF#39;s.#0160; The list also includes the values for the broad market ETF#39;s and their inverses./span/p
pspan style=”FONT-FAMILY: #39;Times New Roman#39;, #39;serif#39;; FONT-SIZE: 12pt”a href=”http://oldprof.typepad.com/.a/6a00d83451ddb269e20120a61f0b0e970b-popup” onclick=”window.open( this.href, #39;_blank#39;, #39;width=640,height=480,scrollbars=no,resizable=no,toolbar=no,directories=no,location=no,menubar=no,status=no,left=0,top=0#39; ); return false” style=”DISPLAY: inline”img alt=”102209″ class=”asset asset-image at-xid-6a00d83451ddb269e20120a61f0b0e970b ” src=”http://oldprof.typepad.com/.a/6a00d83451ddb269e20120a61f0b0e970b-450wi” style=”WIDTH: 450px” //a br //span/p
pstrongNote for New Readers/strong/p
pOur weekly ETF Update is designed to assist both investors and traders interested in ETF#39;s and Sector Rotation.#0160; Before turning to the current rankings, let us undertake a review for readers new to this series.br /br /emOur Method./em#0160; In this a href=”http://oldprof.typepad.com/a_dash_of_insight/2007/09/the-sector-upda.html” target=”_blank”past article/a, we described our basic methodology and why we believe the rankings are useful for fundamental traders and technical traders alike.#0160; While we urge readers to check out the entire article, the key point is that ETF#39;s pose challenges and opportunities different from investment in individual stocks.#0160; The fundamentals may be more difficult to assess.#0160; Even with a good grasp on fundamental trends, there is a lot of technically-based trading in ETF#39;s.#0160; This means that a href=”http://oldprof.typepad.com/a_dash_of_insight/2007/09/fundamental-or-.html” target=”_blank”those trading with a fundamental approach/a (and we do this as well) want to monitor the quot;hot moneyquot; moves.#0160; Here is an a href=”http://oldprof.typepad.com/a_dash_of_insight/2007/09/fundamental-or-.html” target=”_blank”article on that point/a.br /br /emThe system synopsis/em. We look at Trending sectors, Cyclical Sectors, and build in an element of Anticipation for both entry and exit — thus the name of the model, TCA-ETF.#0160; While we do not reveal the exact methodology for spotting trends and cycles, the system is not a quot;black box.quot;#0160; The basic elements are used by many, and widely reported.#0160; We even discuss the a href=”http://oldprof.typepad.com/a_dash_of_insight/2007/12/trading-systems.html” target=”_blank”need for human analysis/a as opposed to black box trading.br /br /emWe report the rankings/em each week, now on the weekend with a one-day delay, using the Thursday output from the model.#0160; We monitor and trade this daily, and offer a free report (request via the email address on the top left of the site) for those interested in our weekly trading program./p
p/p
p/p/div

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Last 5 posts by Jeffrey Miller

• A Tough Nut to Crack - October 29th, 2009
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