Jeff Miller

ETF Update: Here's How Currency Moves Affect Your Positions

Isaac -- a "1" in the penalty box is like a stop loss signal, but using more sophisticated criteria. Send an email to jmiller at newarc dot com and I'll get it to the right people.

The filter change announced this week includes faster stops via the penalty box, recognizing the hot money moves of hedge funds.

Thanks for the question.

Jeff

ETF Update: Greater Flexibility, More Strategies

nearos -- We do have a couple of the ETF's you mention. The universe we use is part of an overall trading strategy where we remain invested in the top eight sectors. We do not want to have, say, eight Latin American country funds, or eight gold and silver ETF's. For this reason we choose a representative ETF for a particular theme. We look for open-ended funds without excessive concentration in a few companies. At the moment, we have not included pure commodity plays, but the idea is under review. It may require a completely separate ranking and asset allocation.

We publish the ratings for the general interest and to give a look at our strategy. It is not intended as a comprehensive comparison of all funds. If your favorite ETF is not on the list, you should be able to find a similar ETF in our universe, and the strength ratings will probably be similar.

We consider (and use) suggestions for new candidates that meet the criteria. We also provide reports to some customers who have their own customized list of candidates.

Thanks for your comment. I'm sure that others had the same question.

Jeff

Are You Missing the ETF Rally?

Uncle Bill -
Thanks for your question. I can see that you did some research with genuine interest, so let me try to clarify a few things.

While I have been trading market sectors through model-based rotation systems for nearly ten years, the application to the ETF's, and particularly to iShares, is a new approach for us. I have tried to explain why this universe is especially good for our model, and I'll write more on this in the future. Meanwhile, the record you see here is what we actually did. The articles include a rapid trade in and out of a sector in August, and how we were out of the market for a month.

I am trying to illustrate what it is really like to trade a system. Most people do not understand at all. I do not expect to call bottoms and tops with this method. In fact, I know that I will get whipped around at transitional points. How? From studying the careful, out-of-sample back tests, so I am prepared for what I get. I also know there will be some negative patches and drawdowns.

We use this model for our intermediate outlook even when I personally disagree. (Over the years, the model and I have been pretty close overall, both with excellent records.) Because we make our position public on the Ticker Sense blogger sentiment poll, you can check us out for a longer period. When the model is negative, we include short ETF's to hedge the position. We might still be net long, but the percentage has been reduced.

I am still trying to figure out what to include in these articles, and what the timing should be. Your comment is helpful in that regard.

Thanks,

Jeff