Skip to main content

ProShares ETF Report - Strongest BUY and SELL Signals

This is the first of what will be a recurring series of posts where I publish the results of running a number of technical analysis screens against all of the ProShares ETFs. Below we have the list of those ETFs with the strongest technical underpinnings as well as a list of those ETFs that are the weakest.

Strongest BUY Signals --

The following chart lists only those ProShares ETFs where both DMI and Aroon evaluation indicates they are in reasonably strong up-trends.

Symbol Signal Type Name Category 20-Day MA above
50-Day MA
DMI Aroon
DOG BUY Short Dow30 Short Market Cap Yes DMI: strong trend Up (ADX: 26 +DI: 33 -DI: 11) Strong Up trend - Up: 100 Down: 8 Osc: 92
DXD BUY UltraShort Dow30 Short Market Cap Yes DMI: strong trend Up (ADX: 25 +DI: 32 -DI: 11) Strong Up trend - Up: 100 Down: 8 Osc: 92
EFU BUY UltraShort MSCI EAFE Short International Yes DMI: strong trend Up (ADX: 24 +DI: 39 -DI: 17) Strong Up trend - Up: 100 Down: 8 Osc: 92
EFZ BUY Short MSCI EAFE Short International Yes DMI: strong trend Up (ADX: 30 +DI: 54 -DI: 20) Strong Up trend - Up: 100 Down: 24 Osc: 76
SH BUY Short S&P500 Short Market Cap Yes DMI: strong trend Up (ADX: 22 +DI: 30 -DI: 13) Strong Up trend - Up: 100 Down: 8 Osc: 92
SJF BUY UltraShort Russell1000 Value Short Style Yes DMI: strong trend Up (ADX: 28 +DI: 37 -DI: 15) Strong Up trend - Up: 100 Down: 8 Osc: 92
SKF BUY UltraShort Financials Short Sector Yes DMI: strong trend Up (ADX: 35 +DI: 25 -DI: 9) Strong Up trend - Up: 100 Down: 4 Osc: 96
SZK BUY UltraShort Consumer Goods Short Sector Yes DMI: strong trend Up (ADX: 23 +DI: 34 -DI: 12) Strong Up trend - Up: 100 Down: 8 Osc: 92
TLL BUY UltraShort Telecommunications Short Sector No DMI: strong trend Up (ADX: 43 +DI: 69 -DI: 26) Strong Up trend - Up: 100 Down: 40 Osc: 60

After this past week, which saw the market drop by over 3%, it is not surprising to see the short and ultra-short ETFs on a list of gainers. What is significant is that the trend indicators for these ETFs are so strong. Given that these are all inverse ETFs, it indicates a sustained weakness in the underlying sectors.

It is interesting to see that the short and ultra-short international ETFs (EFU, EFZ) are on the list. Remaining bulls have been hoping that global economic activity will support a weak economy in the U.S. From the looks of this chart, that confidence may be eroding.

Also of significance are the ETFs that have not made this list. For example, we don't see the inverse NASDAQ ETFs (PSQ, QID) nor do we see the inverse small cap ETFs (SBB, RWM, SKK). The inverse mid-cap ETFs (MYY, SKD) are also absent. This does provide some small hope that, since the entire market has not broken down completely, perhaps the lagging sectors are close to a bottom.


Strongest SELL Signals --

The following chart lists only those ProShares ETFs where both DMI and Aroon evaluation indicates they are in reasonably strong down-trends.

Symbol Signal Type Name Category 20-Day MA below
50-Day MA
DMI Aroon
DDM SELL Ultra Dow30 Ultra Market Cap Yes DMI: strong trend Down (ADX: 26 +DI: 11 -DI: 33) Strong Down trend - Up: 8 Down: 100 Osc: -92
RXL SELL Ultra Health Care Ultra Sector Yes DMI: strong trend Down (ADX: 24 +DI: 12 -DI: 35) Strong Down trend - Up: 56 Down: 100 Osc: -44
SMN SELL UltraShort Basic Materials Short Sector Yes DMI: strong trend Down (ADX: 24 +DI: 18 -DI: 24) Strong Down trend - Up: 28 Down: 88 Osc: -60
SSO SELL Ultra S&P500 Ultra Market Cap Yes DMI: strong trend Down (ADX: 22 +DI: 13 -DI: 31) Strong Down trend - Up: 8 Down: 100 Osc: -92
UGE SELL Ultra Consumer Goods Ultra Sector Yes DMI: strong trend Down (ADX: 24 +DI: 15 -DI: 44) Strong Down trend - Up: 8 Down: 100 Osc: -92
UVG SELL Ultra Russell1000 Value Ultra Style Yes DMI: strong trend Down (ADX: 23 +DI: 21 -DI: 46) Strong Down trend - Up: 4 Down: 100 Osc: -96
UXI SELL Ultra Industrials Ultra Sector Yes DMI: strong trend Down (ADX: 22 +DI: 18 -DI: 35) Strong Down trend - Up: 8 Down: 100 Osc: -92
UYG SELL Ultra Financials Ultra Sector Yes DMI: strong trend Down (ADX: 37 +DI: 9 -DI: 27) Strong Down trend - Up: 25 Down: 100 Osc: -75

In many ways this chart reflects the opposite of what is going on in the chart of strongest BUY signals but there are a couple of differences. Here we see that investors are fleeing from the Health Care, Basic Materials and Industrials sectors.

With stocks getting cheaper by the day lately, one would think that the value investing style might start to gain some popularity. We see, however, that the Ultra Russell 1000 Value ETF (UVG) has gotten hammered. Apparently, stocks aren't cheap enough yet.

Conclusion --

It is clear from looking at the sectors reflected in the two charts that large swaths of the market are out of favor. Worse, even the defensive sectors are not particularly strong. It appears that the majority of ProShares investors are betting heavily on a select number of sectors.

Does that mean we should rush in and buy the ETFs on the strongest list? If you believe in momentum then the answer is yes. I would caution, however, that it is dangerous to chase these ETFs, especially the ultra ETFs.

Oh, and by the way, the strongest ETF of all is the Ultra-Short Financials ETF (SKF).


Disclosure: none

Comments

Popular posts from this blog

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position.

This first post in the series starts at the beginning: getting good investment ideas.

Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets.

As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professionals and …

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas.

Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what to lo…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for Jan 16, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan over 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

Wait, there's more...

We also use the Alert HQ process to generate more free lists of stocks and ETFs

The first byproduct of the Alert HQ process is the Trend Leaders list, our collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day exponential moving average. This week's list is now available at the TradeRadar site on the Trend Leaders page.

As another byproduct of the Alert HQ process we have generated a list of stocks that have broken either above their upper…