George Simone

Trading Has Taken Over the World

So the question for an ETF investor {?} is to buy-and-hold or to trade. The answer is both. In all markets - but especially in the volatile ETF game - the two main muggars are "support" and "trend-momentum" and they determine if certain sector ETFs ought to be traded or held.
Roughly speaking, for the industrial and financial sectors ETFs, during the period from March to October /07 support and momentum were bullish and these ETFs traded as such. From October /07 to around May /08 support and momentum turned mostly flat, with the result that industrial and financial ETFs were either sold or held.
All of this changed drastically in May of /08 when support and momentum turned decisively bearish, and the rest is history. But since the December /08 low, support and trend-momentum have turned totally flat, and are now neither bullish not bearish. It means that both - Bulls and Bears - are sitting on the fence and in no mood to jump off on either side. This is why the market is moving mostly sideways, within a relatively narrow trading range where ETFs are mostly in a holding pattern, which could also be construed as a part of an basing process. If this is so, then Small Caps, Mid Caps and Financials are best positioned to be market leaders on the next leg up.