Visit our sister sites: TradingStockAlerts.com and TradeRadarSoftware.com

Tuesday, July 8, 2008

ProShares ETFs fail to track NASDAQ properly today - is this rally meaningful?

Some numbers to consider from today's trading:

NASDAQ Composite up 2.28%
NASDAQ 100 ($NDX) up 2.43%
PowerShares QQQ (QQQQ) up 2.38%

ProShares has a couple of ETFs that track the NASDAQ 100 on the long side and on the short side. One would have expected the double long ETF to move up nearly 5% and the double short ETF would have moved down nearly 5%.

What we saw instead is the following:

ProShares Ultra QQQ (QID) up 3.54%
ProShares Ultra-Short QQQ (QID) down 3.74%

Does this mean that ProShares was not able to deliver the expected returns and failed to track their underlying indexes properly? Or does it mean that investors did not completely buy into today's rally in the NASDAQ and, as a result, did not sell off the ultra-short ETF or bid up the ultra-long ETF as much as expected?

I see this happen periodically. Is it a tell? Is it an indication we can't trust today's rally? Stayed tuned.

Strongest Technical Performance in ProShares ETFs --

In the meantime, what can we deduce from the technical situation with the other ProShares ETFs?

The following table lists the ETFs generating the strongest technical signals based on moving averages, DMI and Aroon.

Symbol Signal Type Name Category 20-Day MA over 50-day MA DMI Aroon
DOG BUY Short Dow30 Short Market Cap Yes DMI: strong trend Up (ADX: 47 +DI: 31 -DI: 7) Strong Up trend - Up: 96 Down: 12 Osc: 84
DXD BUY UltraShort Dow30 Short Market Cap Yes DMI: strong trend Up (ADX: 46 +DI: 30 -DI: 7) Strong Up trend - Up: 96 Down: 12 Osc: 84
EEV BUY UltraShort MSCI Emerging Markets Short International Yes DMI: strong trend Up (ADX: 30 +DI: 32 -DI: 13) Strong Up trend - Up: 100 Down: 4 Osc: 96
EFU BUY UltraShort MSCI EAFE Short International Yes DMI: strong trend Up (ADX: 32 +DI: 34 -DI: 12) Strong Up trend - Up: 100 Down: 4 Osc: 96
EFZ BUY Short MSCI EAFE Short International Yes DMI: strong trend Up (ADX: 42 +DI: 47 -DI: 12) Strong Up trend - Up: 100 Down: 8 Osc: 92
EUM BUY Short MSCI Emerging Markets Short International Yes DMI: strong trend Up (ADX: 32 +DI: 40 -DI: 14) Strong Up trend - Up: 100 Down: 4 Osc: 96
EWV BUY UltraShort MSCI Japan Short International Yes DMI: strong trend Up (ADX: 27 +DI: 35 -DI: 17) Strong Up trend - Up: 92 Down: 16 Osc: 76
FXP BUY UltraShort FTSE/Xinhua China 25 Short International Yes DMI: strong trend Up (ADX: 25 +DI: 31 -DI: 21) Strong Up trend - Up: 96 Down: 4 Osc: 92
MYY BUY Short MidCap400 Short Market Cap Yes DMI: strong trend Up (ADX: 38 +DI: 39 -DI: 9) Strong Up trend - Up: 100 Down: 12 Osc: 88
MZZ BUY UltraShort MidCap400 Short Market Cap Yes DMI: strong trend Up (ADX: 36 +DI: 35 -DI: 9) Strong Up trend - Up: 100 Down: 12 Osc: 88
PSQ BUY Short QQQ Short Market Cap Yes DMI: strong trend Up (ADX: 24 +DI: 26 -DI: 18) Strong Up trend - Up: 96 Down: 12 Osc: 84
QID BUY UltraShort QQQ Short Market Cap Yes DMI: strong trend Up (ADX: 24 +DI: 25 -DI: 18) Strong Up trend - Up: 96 Down: 12 Osc: 84
REW BUY UltraShort Technology Short Sector Yes DMI: strong trend Up (ADX: 23 +DI: 27 -DI: 16) Strong Up trend - Up: 92 Down: 12 Osc: 80
RXL BUY Ultra Health Care Ultra Sector No DMI: strong trend Up (ADX: 23 +DI: 26 -DI: 24) Strong Up trend - Up: 100 Down: 50 Osc: 50
SBB BUY Short SmallCap600 Short Market Cap Yes DMI: strong trend Up (ADX: 25 +DI: 39 -DI: 20) Strong Up trend - Up: 96 Down: 12 Osc: 84
SCC BUY UltraShort Consumer Services Short Sector Yes DMI: strong trend Up (ADX: 30 +DI: 30 -DI: 14) Strong Up trend - Up: 96 Down: 12 Osc: 84
SDK BUY UltraShort Russell MidCap Growth Short Style Yes DMI: strong trend Up (ADX: 30 +DI: 34 -DI: 11) Strong Up trend - Up: 100 Down: 44 Osc: 56
SDS BUY UltraShort S&P500 Short Market Cap Yes DMI: strong trend Up (ADX: 38 +DI: 31 -DI: 8) Strong Up trend - Up: 96 Down: 12 Osc: 84
SFK BUY UltraShort Russell1000 Growth Short Style Yes DMI: strong trend Up (ADX: 26 +DI: 31 -DI: 16) Strong Up trend - Up: 100 Down: 16 Osc: 84
SH BUY Short S&P500 Short Market Cap Yes DMI: strong trend Up (ADX: 38 +DI: 32 -DI: 8) Strong Up trend - Up: 96 Down: 12 Osc: 84
SIJ BUY UltraShort Industrials Short Sector Yes DMI: strong trend Up (ADX: 27 +DI: 30 -DI: 14) Strong Up trend - Up: 92 Down: 16 Osc: 76
SJF BUY UltraShort Russell1000 Value Short Style Yes DMI: strong trend Up (ADX: 35 +DI: 31 -DI: 13) Strong Up trend - Up: 100 Down: 12 Osc: 88
SJH BUY UltraShort Russell2000 Value Short Style Yes DMI: strong trend Up (ADX: 32 +DI: 32 -DI: 7) Strong Up trend - Up: 96 Down: 12 Osc: 84
SJL BUY UltraShort Russell MidCap Value Short Style Yes DMI: strong trend Up (ADX: 42 +DI: 42 -DI: 13) Strong Up trend - Up: 100 Down: 12 Osc: 88
SKF BUY UltraShort Financials Short Sector Yes DMI: strong trend Up (ADX: 45 +DI: 33 -DI: 12) Strong Up trend - Up: 96 Down: 12 Osc: 84
SKK BUY UltraShort Russell2000 Growth Short Style Yes DMI: strong trend Up (ADX: 25 +DI: 28 -DI: 11) Strong Up trend - Up: 96 Down: 16 Osc: 80
SMN BUY UltraShort Basic Materials Short Sector No DMI: strong trend Up (ADX: 27 +DI: 36 -DI: 12) Strong Up trend - Up: 100 Down: 44 Osc: 56
SRS BUY UltraShort Real Estate Short Sector Yes DMI: strong trend Up (ADX: 28 +DI: 28 -DI: 20) Strong Up trend - Up: 100 Down: 12 Osc: 88
SSG BUY UltraShort Semiconductors Short Sector Yes DMI: strong trend Up (ADX: 23 +DI: 28 -DI: 15) Strong Up trend - Up: 92 Down: 12 Osc: 80
SZK BUY UltraShort Consumer Goods Short Sector Yes DMI: strong trend Up (ADX: 30 +DI: 26 -DI: 24) Strong Up trend - Up: 84 Down: 12 Osc: 72
TLL BUY UltraShort Telecommunications Short Sector Yes DMI: strong trend Up (ADX: 43 +DI: 68 -DI: 19) Strong Up trend - Up: 100 Down: 4 Osc: 96
TWM BUY UltraShort Russell2000 Short Market Cap Yes DMI: strong trend Up (ADX: 31 +DI: 31 -DI: 13) Strong Up trend - Up: 96 Down: 12 Osc: 84

There are 32 ETFs in the list above. Everyone is in the short or ultra-short category.

What this shows is that today's rally has not yet affected a change in the primary trend which, based on the strength of these bearish ETFs, is still clearly down.

Disclosure: at time of writing author is long QID and MZZ

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Blog Archive


Disclaimer: This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.