ETF Update: Home and Abroad

Our regular weekly ETF update is now analyzing a universe of 277 possible choices.  We rank the sectors based upon Trend and Cyclical characteristics.  Trending behavior is the most established predictive tool in technical analysis.  Our model evaluates trends by filtering out the sharp moves and adding a touch of Anticipation.  The result is our TCA-ETF model, giving us a viewpoint that is better than either the forest or the trees.  (For new readers, there is a more complete description of our methods at the end of the article.)

This week's results show a generally bullish picture with two specific highlights.  Let us turn to the highlights.

Home Builders

Home building stocks were among the featured choices last week, and maintain the top positions.  People may argue about the fundamentals of the housing market, but those trading the stocks are voting with their dollars.   Here is the Dow Jones U.S. Home Construction Index Fund



The members are all of the big construction names and it is a pure play.  While most seem to remain skeptical about market advances, Mark Perry notes the strength in this group.


The most dramatic rise in our rankings was the Market Vectors Russia ETF.  We featured the sector last November.  One question about the Russia ETF is the emphasis on oil, but sometimes the combination works.  Here is the chart.


The model sees some breakout potential, making it the fastest rising sector for the last week.

Weekly TCA-ETF Rankings

99% of our sectors in the
"buy" range, we continue the bullish posture from last week.

were up over 2.5% last week, beating the S&P 500 by 1.7%.

Based upon the model signals, we continued our bullish position in the Ticker Sense Blogger Sentiment poll.


Note for New Readers

Our weekly ETF Update is designed to assist both investors and
traders interested in ETF's and Sector Rotation.  Before turning to the
current rankings, let us undertake a review for readers new to this

Our Method.  In this past article,
we described our basic methodology and why we believe the rankings are
useful for fundamental traders and technical traders alike.  While we
urge readers to check out the entire article, the key point is that
ETF's pose challenges and opportunities different from investment in
individual stocks.  The fundamentals may be more difficult to assess. 
Even with a good grasp on fundamental trends, there is a lot of
technically-based trading in ETF's.  This means that those trading with a fundamental approach (and we do this as well) want to monitor the "hot money" moves.  Here is an article on that point.

The system synopsis.
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.  While we do not reveal the exact methodology for spotting
trends and cycles, the system is not a "black box."  The basic elements
are used by many, and widely reported.  We even discuss the need for human analysis as opposed to black box trading.

We report the rankings
each week, now on the weekend with a one-day delay, using the Thursday
output from the model.  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.

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One comment

  • forestry trucks November 2, 2009  

    The construction industry is not doing as well as it used to. We all need to do our part to help the economy. forestry trucks