Download Exchange-Traded Funds (ETF)

Exchange-Traded Funds (ETF)
MGCIBDMUG Presentation
1/17/15
1
What is an ETF?
• An exchange traded fund is a basket of stocks,
or an investment fund that tracks an
underlying index and trades as a single equity.
• Created around every conceivable types of
index…
– Market Indices (S&P 500, NASDAQ 100, etc.)
– Market Sectors (Health Care, Oil & Gas, etc.)
– Stock types (value, growth, etc.)
– Specialty, International, Real Estate, Commodities,
Currencies, etc.
2
Benefits
• ETFs typically involve lower operating costs than
traditional mutual funds.
• Provides diversity within each share.
• Earn dividends paid by the underlying stocks.
• Tax benefits (don’t pay until you close out the position.
• Undergo continuous pricing unlike mutual funds that
wait till end of day. ETF’s are immediately disposable.
• Reduce investor research time.
• Allows you to short baskets of stocks (inverse ETFs).
3
Where to Find and Assess ETFs
• Look at fund family websites: Claymore,
iShares, PowerShares, ProShares, SPDRS,
Schwab…
• Screen, Research, and Compare
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www.investors.com
www.schwab.com
www.nasdaq.com
www.finviz.com
www.barchart.com
4
IBD ETF Strategy
HOW IT WORKS
• Buy a market Index ETF (QQQ was used in the study)
immediately after a new uptrend is announced in
Market Pulse and employ these simple allocation rules:
– Use Market Direction to adjust
• Confirmed Uptrend – Buy and Hold 100%
• Uptrend Under Pressure – Reduce to 50%
• Market in Correction – Pull out. 0%
– For Market in Correction, consider Inverse ETFs (Note: This
is not part of IBD Strategy)
5
IBD Exportable Reports
ETF Center:
Description:
Symbol
1-Week Winners and Losers
The exchange traded funds listed below are the top price percentage gainers over the past week.
Company Name
Current Price
UVXY
Proshrs Ultra Vix Sht Tm
32.60
JNUG
Direxion Dly Jr Gld Bull
38.83
NUGT
Direxion Gld Mnr Bull 3X
16.96
RUSS
Direxion Russia Bear 3X
26.18
VIXY
Proshrs Vix St Futures
24.06
VXX
Ipath Sp Vix St Term Fut
36.13
ERY
Direxion Energy Bear 3X
26.38
FAZ
Direxion Finl Bear 3X
14.65
SOXS
Direxion Semicon Bear 3X
15.14
BOIL
Proshrs Ultra Bloom Natg
17.90
SQQQ
Proshrs Ultpro St Qqq
32.94
DUG
Proshrs Ultsht Oil & Gas
62.06
SPXS
Direxion Dly Sp5 Bear 3x
22.56
SPXU
Proshrs Ultpro St Sp 500
41.61
TZA
Direxion Sc Bear 3X Shrs
13.48
SRTY
Proshrs Ultpro St R 2000
34.62
SDOW
Proshrs Ultpro St Dow 30
22.20
SCO
Proshrs Ultsht Blom Crud
99.74
USLV
Vs 3X Silver
23.32
GDXJ
Market Vect Jr Gld Mine
28.58
Screen results as of 4:01 PM Eastern, Thursday, January 15, 2015
Price Change
1.83
4.58
2.40
2.16
0.72
1.01
0.94
0.46
0.35
-1.21
1.24
1.62
0.63
1.11
0.70
1.73
0.39
8.10
0.10
1.33
% Price Chg (1 Wk)
36.52
24.14
23.89
22.22
17.48
17.42
17.3
14.01
13.32
12.58
11.21
11.1
10.7
10.66
10.4
10.4
10.01
9.98
9.68
8.59
Volume (000)
25006
3430
20716
1004
1094
61871
3808
5877
197
504
6134
281
7426
7764
20773
667
1656
1893
561
20514
Volume % Chg
72
7
19
3
-8
53
2
105
-26
56
40
-24
200
80
34
-14
95
24
55
-6
6
ETF Trading Strategies
• Index and Sector Strategies
– Stay aware of market swings due to economic and
earnings data, geopolitical events, and
national/global news that impact financial
markets
– Stay tuned to which sectors and industry groups
are leading and which are showing signs of
weakness
7
Using Charts to Buy and Sell ETFs
Bullish: Strongly Trending
• The 20 MA is above the 50 MA.
• Both the 20 MA and 50 MA are rising
• The distance between the 20 MA and 50 MA is
large and getting larger
• Pullbacks reach only to 20 MA or at most
between 20 MA and 50 MA
8
Using Charts to Buy and Sell ETFs
Bullish: Weakly Trending
• The 20 MA is mostly (but not always) above
the 50 MA.
• Both the 50 MA is rising, but the 20 MA is
fluctuating (though mostly rising)
• The distance between the 20 MA and 50 MA
changes frequently
• Pullbacks reach 50 MA, sometimes beyond
but only briefly
9
Using Charts to Buy and Sell ETFs
Bearish: Strongly Trending
• The 20 MA is below the 50 MA.
• Both the 20 MA and 50 MA are falling
• The distance between the 20 MA and 50 MA is
large and getting larger
• Rallies reach only to 20 MA or at most
between 20 MA and 50 MA
10
Using Charts to Buy and Sell ETFs
Bearish: Weakly Trending
• The 20 MA is mostly (but not always) below
the 50 MA.
• The 50 MA is falling, but the 20 MA is
fluctuating (though mostly falling)
• The distance between the 20 MA and 50 MA
changes frequently
• Rallies reach only to 50 MA, sometimes
beyond but only briefly
11
Using Charts to Buy and Sell ETFs
Range Bound
• The 20 MA spends as much time above as
below the 50 MA.
• The 50 MA is mostly flat, while the 20 MA
varies from rising to falling
• The distance between the 20 MA and 50 MA
varies greatly
12