Update on Commodity ETFs To Diversify From US Dollar

Commodity ETFs are great to diversify against the fall of the U.S. dollar.

Here are the RSI values for all commodity ETFs and ETNs on the market. Here they are, sorted for the short term and long term:

Short term, ordered from most oversold to most overbought:


(please click to enlarge)

The most oversold are JJG and GRU, both grains-oriented. The most overbought is sugar.

Long term, ordered from most oversold to most overbought:



Most oversold here are COW and DYY, livestock. Most overbought are UCD and UCI. UCD is a double long on the Dow Jones—UBS Commodity Index (a highly liquid and diversified benchmark that allows investors to track 19 commodities futures market). UCI is an Etracks linked to CMCI Total Return Index

Here are their names, in alphabetical order:



We track all commodity ETFs live here.

You may receive technical analysis and alerts of these ETFs and ETNs, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Currency ETFs update

Here is an updated view on the currency ETFs. RSI numbers were calculated on all currency ETFs on the market. This identifies those are that are oversold and overbought and may then be used as indicators for the top ETFs to buy and to sell.

Short term (RSI daily):

(please click to enlarge)

In the short term, some ETFs are extremely oversold: URR, EU, ERO, FXE, all related to long Euro positions. The overbought ETFs are DRR and EUO, both double short Euro.

Long Term:

Using longer timeframes, there are no oversold currencies, although EUO is getting close (interestingly, this one is overbought in the short term, as above). The Japanese Yen and Australian dollar are the most overbought ones.

Names and volumes

For your convenience, here are the names of these currency ETFs and average volumes:

Note that we track these ETFs live as one of our Tracking Live sites.

You may receive alerts of these currency ETFs sent automatically to you by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

Current oversold and overbought ETFs

There are over 770 ETFs on the U.S. market. Their RSI values give a very good indication of overbought and oversold levels. Here are the top 20 most overbought and most oversold.

You can receive free technical analysis and buy/sell alerts of these stocks for short, medium, amd long terms, sent automatically to you, by entering the ETF symbols in the Technical Trend Analysis Tool, (powered by INO).

Top 20 oversold in the short term (ordered by RSI 7 daily):




Note how the oil ETfs are short-term oversold (as of Dec 11 EOD).

Top 20 Overbought:



Note how utilities and bonds were overbought. Note the junk ETFs is there as well.


For convenience, here are their names and average volumes:





As always, please do your own due dilligence.

A new look at Dividend ETFs

Here are the dividend ETFs sorted by RSI7. This gives a very good indication of what to buy what to sell, depending on the desired specific timeframe.

Short term (RSI daily), from most oversold to most overbought:




Note that none are strictly oversold or overbought.

Long Term: (RSI monthly)



Again, none are overbought or oversold.

These are the ETF names and average trading volumes:




You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

An ETF for the fight against global carbon

"These long overdue findings cement 2009's place in history as the year when the U.S. government began addressing the challenge of greenhouse-gas pollution and seizing the opportunity of clean-energy reform," said Lisa Jackson, EPA administrator.

The Environmental Protection Agency said today that greenhouse gases are a danger to public health, a decision that may lead to new emissions regulations, in the form of new emission standards for cars, while potentially opening up large emitters such as power plants, crude-oil refineries and chemical plants to limits on their output of carbon dioxide and other gases.

Regardless of whether you are believe in global warming or deny it, a potentially good way to profit from this decision is ghrough the Global Carbon Capture ETF, GRN. It is an iPath ETF, and it is up 6% today, but is done 6% YTD:





Note that we track all commodity ETFs live here.

As a bonus, GRN is uncorrelated to pretty much all other commodity ETFs on the maket. That is a huge plus for diversification, please see our previous article.

About GRN:



The Barclays Capital Global Carbon Index Total Return™ ("BGCITR") is designed to measure the performance of the most liquid carbon-related credit plans and is designed to be an industry benchmark for carbon investors. Each carbon-related credit plan included in the BGCITR is represented by the most liquid instrument available in the marketplace. The BGCITR expects to incorporate new carbon-related credit plans as they develop around the world. The BGCITR currently includes two carbon-related credit plans: European Union Emission Trading Scheme or EU ETS Phase II and Kyoto Protocol's Clean Development Mechanism.

A look at the best global currency ETFs

We computed the RSI values of all currency ETF and ETNs on the market, then sorted them by short and long time frames. Here they are:

Short term:

The two most oversold ETFs are XRU and CYB, the Ruble and Yuan. There are no overbought ETFs, but the most expensive ones, RSI-wise and with non-insignificant volume, are the double short Euro and the Mexican Peso.

Long term:



Note: we track all currency ETFs live as part of our live tracking sites.

Long term, the only oversold ETF is EUO, also a double short Euro. There are three overbought ETFs, ERO (long Euro), Swiss Franc, and Australian dollar. Interestingly, the currency that has appreciate the most this year, the Brazilian Rea,l is not near the most overbought ones.

For your convenience, here are the names of the ETFs and their average volumes:




You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

A look at global ETFs for diversification

Correlations are known to be fundamental for diversification. In order to invest in multiple stocks or ETFs an investors always needs to look at how correlated they are. If they are highly correlated, there is no poinnt investing in more than one ETF. This is also true for global ETFs.

The chart below shows the correlations for most global/foreign ETFs on the market, for the period October 1st to November 30 2009. A value close to 1 or -1 indicates high correlation. A value close to 0 indicates no correlation.

Please click to enlarge.




For your convenience, these are the names of the ETFs.

Current overbought and oversold ETFs

Here are the RSI values of all 776 ETFs on the market. Here are the most overbought and oversold ETFs for both short-term (RSI-D), and long-term (RSI-M). What we notice is that there are a lot more overbought ETFs than oversold ones in both time horizons. Details below.

Top Oversold Short-Term (ordered by RSI-D):


(please click to enlarge)

Top Overbought Short-Term:



Note that there are too many overbought ETFs in the short term so we raised the cutoff RSI level to 75. There are 12 oversold ETFs, and 40 overbought (RSI over 70), ratio of 3.33.

The most overbought ETF is SHY, 1-3y treasury bonds, with an RSI of 90.08.

Top Oversold Long-Term (ordered by RSI-M):




Top Overbought Long-Term:



Note that again in the long term there are a lof more overbought ETFs than oversold ones. There are 23 oversold ETFs and 94 overbought (ratio of 4.08).

The most overbought ETF shown is PVI, with an RSI of 94.56, which is stratospheric. However, this ETF is designed to track the performance of a pool of short-term, tax-exempt, variable-rate demand obligations (VRDOs) issued by municipalities in the United States and its price barely moves and causes an impractical RSI. The most overbought ETF is then MBB, with an RSI of 90.55, another bond fund, Barclays Capital U.S. MBS Index.


You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

As always, for information only, please do your own due dilligence.

A look at the current best gold, silver, precious miner ETFs

Here is the current list of RSI values for gold, silver, and precious miners ETFs, ordered by RSI7 daily values, a short term indicator of oversold and overbought conditions.



The lists has 28 ETFS. 18 are overbought! Only 4 are oversold, and they are all bear ETFs (DGZ, GLL, DZZ, ZSL).


You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

A look at the current best Dividend ETFs

We computed the RSI values of all dividend ETFs in the U.S. and in Canada. Below is the table showing them sorted by RSI7- daily (short term)


(please click to enlarge)

There are NO dividend ETFs that are oversold in the short term. The closest are DFJ and DXJ, both on Japanese dividend stocks. Please refer to our recent posts on the state of Japan...

As for overbought, DOD and XDV.TO (Canada Select Div) lead the pack. The DOD is the "Dogs iof the Dow" (!), which tracks the Dow Jones Industrial Average Select Yield, which is the top 10 stocks with the highest indicated annual dividend yield. We are serious.

Note: You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

Please do your own due dilligence.

Performance of Actively Managed ETFs Versus The Underlying Index

AlphaPro features a couple of actively managed ETFs. One of them tries to improve on the TSX60 index (which is tracked by the iShares XIU ETF). Please see the comparison chart this year:


(please click to enlarge).

The difference in ROI is quite significant:

XIU: +25.37%

HAX: 11.15%

Here is the comparison for the last 6 months:



Or for the last 3 months:



Or for the last 1 month:




Or even for the last 5 days:



The simple XIU vastly outferforms the 'actively managed' HAX on every time period.

An Actively Managed ETF That Uses Seasonality

Don Vialoux and Brooke Thackray are the two "seasonality" analysts. They appear regularly on BNN. They look at patterns and trends during the year for several types of stocks. Now they have joined forces and will be managing a new seasonality ETF, run by AlphaPro, another Jovian company (the same one that manages leveraged ETFs in Canada). At least this one is not leveraged, but there are some unpleasant surprises in them.

The ETF will start trading Tuesday, symbol HAC in Toronto, and will invest in markets or sectors that typically rally in different parts of the year. The managers will no follow a buy-and-hold strategy. This part is great.

Don Vialoux who runs http://www.timingthemarket.ca/techtalk/, and Brooke Thackray, is author of several books (Thackray's 2010 Investor's Guide), will provide technical analysis for the seasonal patterns.

Says the Globe and Mail: "Mr. Vialoux has said that average optimal date to enter North American equity markets is at the opening on Oct. 28, and the optimal time to leave is at the close on May 5. But that should be fine tuned each year with technical analysis, he contends.
On his Web site, he said the optimal entry point this year was on Nov. 5. Sectors that are attractive at this time of year include information technology, consumer discretion, industrials (sub sector transportation) and basic materials,"

The prospectus say that HAC will try to make money in all market cycles by tactically investing in stocks, bonds, commodities and currencies during periods that have historically demonstrated seasonal trends and/or will sit in significant amounts of cash. It will also do limited short-selling and unfurtunately will invest in ETFs that include the leveraged and inverse ETFs managed by affiliated company BetaPro Management Inc. This is very bad as these ETFs cannot be held for more than one day or investors in on average lose money. On top of this they generate commissions for BetaPro?? Read release.

Here is the worst part. The ETF has a management fee of 0.75%. However, AlphaPro will also get a performance fee that will be equal to 20% of the amount by which the performance exceeds the "high water mark" and outperforms the one year Government of Canada Treasury Bill rate (which is silly as it is near zero).

A nice idea that somehow went ashtray.

Leveraged ETFs: Top 25 Most Overbought and Top 25 Most Oversold

These are the top 25 most overbought and oversold leveraged ETFs on the market, sorted by RSI7 daily indicator.

Most oversold:



Most overbought:

776 ETFs: Top 25 ETFS To Buy and Top 25 ETFS Sell

Here are the top 25 most overvalued and most oversold ETFs on the market, out of the universe of 776 ETFs, sorted by RSI7 daily. This is a short term indicator.

Most oversold:

The average RSI of these is 26.79.


(please click to enlarge)


Most overbought (in reverse order):

The average RSI of these is 79.89.

Complete List of ETFs On The Market

Here are the ETFs that trade in the U.S. Each list shows the ETF name, its symbol, and sector.

Lists are ordered by issuer's name in alphabetical order.

Please click on each image to enlarge.

List 1, Claymore to First Trust:


List 2: First Trust to iShares:


List 3, iShares to iShares:


List 4, iShares to PowerShares:


List 5, PowerShares to ProShares:


List 6, ProShares to Rydex:


List 7: S&P to Vanguard:


List 8, Vanguard to XShares:

Global ETF assets reach all-time high

Barclays Global Investors reports that the combined assets of the global exchange-traded funds, or ETFs, hit an all-time high of $891B in August 2009, with investors getting more confident about the industry as a low cost, transparent and liquid tool to access global equity and commodity markets,

ETFs assets rose 3.9% above the previous all time high of $858B set in July 2009, and 10.6% above the high set in April 2008, latest figures from Barclays show. The global ETF industry had 1,773 ETFs with 3,137 listings, assets of $891B from 95 providers on 41 exchanges at the end of August 2009. Year to date assets have risen by 25.3 per cent, said Deborah Fuhr, Global Head of ETF Research & Implementation Strategy at BGI.

“The net inflows of $49.0 bn in the past six months shows demand for ETFs is still growing as clients view ETFs as useful tools to help them implement many types of exposures,” said Fuhr in statement.

Emerging market equity ETFs have seen the largest increase in assets growing by $51.8 billion year-to-date to reach $378.1 billion at the end of August 2009. With 522 listings of which 259 are ETFs, the interest in equities in the emerging markets, are on the rise, leading by 13.8 per cent as of August 2009 and 3.8 per cent year to date, according to BGI.

The global growth in ETFs assets and volumes is partly being driven by professional investors in the Middle East, who are increasingly using ETFs as a low cost, transparent and liquid tool to access global equity, fixed income and commodity markets, said Robert Broadwell, iShares Regional Business Director GCC at BGI. “ We have seen a particular increase in the use of fixed income ETFs by Gulf-based family offices and their financial advisors.”

Globally, iShares is the largest ETF provider in terms of both number of products, 391 ETFs, and assets of $429.32 billion, reflecting 48.2% market share.

Index ETF options, plus natural gas and oil

Here are straddles and strangles for September 2009, December 2009, and January 2010 for IWM (my favourite), SPY, UNG, and UCO.

Maximum moves required for each are shown in the yellow-shaded line. If the underlying moves this much, the position will be profitable at expiration. Note that depending on the length of the time to expiry, the position can be profitable with much smaller moves.

For September 2009:

(please click to enlarge)

For December 2009 and January 2010:

Not advice.

The best ETFs in Canada, cheapest and most expensive

We looked at ETFs in Canada. While there aren't as many as in the US, there are more and more popping up every month. Here are the cheapest and most expensive ETFs in Canada by MER:

Cheapest:

Equity:

- BCA, BMO Canadians Titans 60, MER: 0.158%
- XIU, iShares Large Cap 60: 0.17%

Bonds:

- XSB: iShares Canadian Short Bonds: 0.25%
- XBB, iShares Canadian Bonds: 0.30%

Sector ETFs:

- XEG, iShares TSX Energy: 0.55%
- CLO, Claymore OilSands: 0.6%


Most expensive ETFs:

- Horizon BetaPro Bull+ and Bear+ ETFs: 1.15%

There it is, one more reason to stay away from those leveraged ETFs!

3X ETFs losses

FAS and FAZ are very popular leveraged, 3X, ETFs, the financial ETFs by Direxion.

This week there was an "eclipse" of FAS and FAZ. The "eclipse" was the moment in which both ETFs would have the same nominal price. This occurred at least three times this week, on Monday, around $9.55:



(Please click on images to enlarge).

While both ETFs were at $9.55, today one is at around $9.32, the other one at $9.01, i.e, declines of 5.6% and 2.4%! Both have lost even more value this week since the "eclipse". This is clearly seen on a combined comparison chart, where one is up 18% and the other down 32%:



Keep in mind that FAZ started its life at $120, and FAS at $20! Where has all this money gone?

These ETFs have been traded for 101 days (since inception), given them an average daily loss of 2.5% and 0.8%. If these rates of decline were to continue, FAZ will be trading below $1 in 88 days, and FAS in 280 days.

The combined losses in market valuation on FAS and FAZ is a staggering $4.4B since inception:



This can be seen live at the FAZ-FAS Loss-O-Meter tracking site.


The same fund manager has recently launched four new 3X leveraged ETFs, this time for leveraged income funds. They are certainly tremendous money making vehicles for someone, but certainly not for the mom & pop investors in them.