ETFs - The long and short of it

This mornings post is about ETFs.  Over the year I found that ETFs tend to move slower than individual stocks but they also tend to follow a trend for a longer period of time.  I used Barchart to screen for the ETFs hitting the most frequent new highs and lows in the last month to come up with this list.  You can run your own little hedge fund buy buying the first 3 long and short the second 3.  Put them on your watch lists and see how they do.

LONG WATCHLIST:

SKOR -- IQ South Korea Small Cap -- seeks to replicate, before fees and expenses, the performance of the IQ South Korea Small Cap Index. The market capitalization-weighted Index is intended to give investors a means of tracking the overall performance of the small capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in South Korea.

• 96% Barchart technical buy signal
• 17 new highs and up 17.35% in the last month
• Relative Strength Index 68.86% and rising
• Trades around 31.65 with a 50 day moving average of 28.66

WOOD -- S&P Global Timber and Forest Index -- seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P Global Timber & Forestry Index (the "Underlying Index"). The Underlying Index is comprised of approximately 25 of the largest publicly-traded companies engaged in the ownership, management or upstream supply chain of forests and timber lands. These include forest products companies, timber real estate investment trusts, paper products companies, paper packaging companies and agricultural products companies. The Fund generally invests at least 90% of its assets in securities of the Underlying Index and in depositary receipts representing securities of the Underlying Index.

• 96% Barchart technical buy signal
• 16 new highs and up 8.92% in the last month
• Relative Strength Index 76.06% and rising
• Trades around 48.60 with a 50 day moving average of 44.87

PPA -- Aerospace and Defense -- seeks to replicate, before fees and expenses, the SPADE Defense Index, which is designed to identify a group of companies involved in the development, manufacturing, operations and support of U.S. defense, homeland security and aerospace operations. The Fund will normally invest at least 80% of its total assets in common stocks of aerospace and defense companies. The modified market-cap portfolio is rebalanced quarterly and reconstituted annually.

• 96% Barchart technical buy signal
• 16 new highs and up 7.36% in the last month
• Relative Strength Index 80.93% and rising
• Trades around 20.09 with a 50 day moving average of 18.74

SHORT WATCHLIST:

VXX -- S&P 500 VIX Short-term ETN -- linked to the performance of the S&P 500 VIX Short-Term Futures Index. The S&P 500 VIX Short-Term Futures Index is designed to provide access to equity market volatility through CBOE Volatility Index futures. Specifically, the S&P 500 VIX Short-Term Futures Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects the implied volatility of the S&P 500 Index at various points along the volatility forward curve. The index futures roll continuously throughout each month from the first month VIX futures contract into the second month VIX futures contract. A direct investment in VIX (commonly referred to as spot VIX) is not possible. The S&P 500 VIX Short-Term Futures Index holds VIX futures contracts, which could involve roll costs and exhibit different risk and return characteristics. Investments offering volatility exposure can have various uses within a portfolio including hedging, directional, or arbitrage strategies and are typically short or medium-term in nature.

• 96% Barchsrt technical sell signal
• 15 new lows and down 21.94% in the last month
• Relative Strength Index 14.87% and falling
• Trades around 29.97 with a 50 day moving average of 38.43

TYP -- Technolocgy Bear 3X -- seeks daily investment results, before fees and expenses, of 300% of the price performance of the Russell 1000 Technology Index. The pursuit of daily leveraged investment goals means that the return of the Fund for a period longer than a full trading day may bear no resemblance to 300% of the return of the Index. The Index is a capitalization-weighted index of companies that serve the electronics and computer industries or that manufacture products based on the latest applied science. The Fund, under normal circumstances, creates long positions by investing at least 80% of its net assets in the equity securities that comprise the Index.

• 96% Barchart technical sell signal
• 15 new lows and down 14.87% in the last month
• Relative Strength Index 28.69
• Trades around 20.19 with a 50 day moving average of 24.15

QID -- Ultra Short QQQ --  seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the NASDAQ-100 Index. The Index includes 100 of the largest non-financial domestic and international issues listed on the NASDAQ Stock Market. The Fund will typically concentrate its investments in issuers of one or more particular industries to the same extent that its underlying index is so concentrated and to the extent permitted by applicable regulatory guidance.

• 96% Barchart technical sell signal
• 14 new lows and down 8.43% in the last month
• Trades around 10.56 with a 50 day moving average of 11.62

Follow these 6 for the next week and give me some comments on the methodology.  If you'd like to see more of this I do a weekly article on ETFs

Jim Van Meerten is a professional investor with over 40 year experience in investing in stocks, mutual funds and ETFs.  He shares his knowledge on Barchart in his daily blogs -- Barchart Portfolio Blogs.

Through Marketocracy Capital Management you can have a Separately Managed Account that mirrors his Barchart Van Meerten New High portfolio.