Exchange Traded Funds (ETF's)

If you like to trade the Exchange Traded Funds such as the DIA's, QQQQ's or SPY's our ETF Weekly Signals generated from our Market Timing Indicator (MTI) will help you determine when to go Long or Short in the major ETF's on a Weekly basis.

Basically we are looking to take advantage of Oversold or Overbought Conditions in the ETF's and to either go Long or Short in them.  The chart below is a Weekly Chart of the QQQQ's from 2004 into early 2005.  Our strongest Overbought Signals occur when the %K Line (red line) in association with the Slow Stochastics rises above 80 and then drops back below 80 and its %D Line (blue line).  In 2004 there were three strong signals generated to go Short (points A).  A Short Signal is generated when we get a strong downside reversal bar and the price drops below the previous weeks low (points B).    Meanwhile the Short position is then covered once the %K Line (red line) either drops below 20 (points C) or rises back above the %D Line (blue line).   

Meanwhile when the market has become Oversold we then look for a Long (Buy) Signal on a Weekly basis once the %K Line (red line) has dropped below 20 and then rises back above it and its %D Line (blue line).  In 2004 we had two strong Oversold Signals on a Weekly basis (points D) with a third not as strong signal in May (points E).  The Buy Signal was confirmed once the price rose above the previous weeks high (points F).   Meanwhile profits are taken once the %K Line (red line) rises above 80 and then drops back below 80 or drops below the %D Line (blue line).   

A comparison summary of the ETF Weekly Signal Performance going back to 1999 is shown below versus the averages that they track.  On average generally 6 to 8 signals a year are generated by our Weekly ETF Timing Indicator.   As you can see taking advantage of Oversold and Overbought Conditions in the Market can lead to substantial gains especially when the market is not having a good year like we saw in 2000, 2001 and 2002.

Amateur Investors ETF Weekly Signal Performance (1999-2004)
Average 6 Year Return  (DIA: +36.45, QQQQ: +52.6%, SPY: +31.6%)

ETF 2004 2003 2002 2001 2000 1999
DIA (Dow) 26.90% 26.90% 48.10% 57.30% 30.90% 28.30%
QQQQ (Nasdaq 100) 37.40% 29.40% 59.50% 56.20% 81.70% 51.20%
SPY (S&P 500)  25.20% 28.80% 51.90% 39.80% 25.30% 18.60%

Major Index Performance 1999-2004
Average 6 Year Return (Dow: +3.9%, Nasdaq 100: +9.0%, S&P 500: +1.4%)

Index 2004 2003 2002 2001 2000 1999
Dow 3.10% 25.30% -16.70% -7.10% -6.20% 25.20%
Nasdaq 100 10.00% 49.10% -37.60% -32.60% -36.80% 102%
S&P 500 9.00% 26.40% -23.30% -13.00% -10.10% 19.50%

Thus using our Weekly Signals on the three major ETF's will substantially increase your profits on a yearly basis.

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