1. Exchange-Traded Funds (ETF)
MGCIBDMUG Presentation
1/17/15

2. What is an ETF?
An exchange traded fund is a basket of stocks, or an investment fund that tracks an underlying index and trades as a single equity.
Created around every conceivable types of index…
Market Indices (S&P 500, NASDAQ 100, etc.)
Market Sectors (Health Care, Oil & Gas, etc.)
Stock types (value, growth, etc.)
Specialty, International, Real Estate, Commodities, Currencies, etc.

3. Benefits
ETFs typically involve lower operating costs than traditional mutual funds.
Provides diversity within each share.
Earn dividends paid by the underlying stocks.
Tax benefits (don’t pay until you close out the position.
Undergo continuous pricing unlike mutual funds that wait till end of day. ETF’s are immediately disposable.
Reduce investor research time.
Allows you to short baskets of stocks (inverse ETFs).

4. Where to Find and Assess ETFs
Look at fund family websites: Claymore, iShares, PowerShares, ProShares, SPDRS, Schwab…
Screen, Research, and Compare

5. IBD ETF Strategy HOW IT WORKS
Buy a market Index ETF (QQQ was used in the study) immediately after a new uptrend is announced in Market Pulse and employ these simple allocation rules:
Use Market Direction to adjust
Confirmed Uptrend – Buy and Hold 100%
Uptrend Under Pressure – Reduce to 50%
Market in Correction – Pull out. 0%
For Market in Correction, consider Inverse ETFs (Note: This is not part of IBD Strategy)

6. IBD Exportable Reports
ETF Center:
1-Week Winners and Losers
Description:
The exchange traded funds listed below are the top price percentage gainers over the past week.
Symbol
Company Name
Current Price
Price Change
% Price Chg (1 Wk)
Volume (000)
Volume % Chg
UVXY
Proshrs Ultra Vix Sht Tm
32.60
1.83
36.52
25006 72
JNUG
Direxion Dly Jr Gld Bull
38.83
4.58
24.14
3430 7
NUGT
Direxion Gld Mnr Bull 3X
16.96
2.40
23.89
20716 19
RUSS
Direxion Russia Bear 3X
26.18
2.16
22.22
1004 3
VIXY
Proshrs Vix St Futures
24.06
0.72
17.48
1094 -8
VXX
Ipath Sp Vix St Term Fut
36.13
1.01
17.42
61871 53
ERY
Direxion Energy Bear 3X
26.38
0.94
17.3
3808 2
FAZ
Direxion Finl Bear 3X
14.65
0.46
14.01
5877
105
SOXS
Direxion Semicon Bear 3X
15.14
0.35
13.32
197
-26
BOIL
Proshrs Ultra Bloom Natg
17.90
-1.21
12.58
504 56
SQQQ
Proshrs Ultpro St Qqq
32.94
1.24
11.21
6134 40
DUG
Proshrs Ultsht Oil & Gas
62.06
1.62
11.1
281
-24
SPXS
Direxion Dly Sp5 Bear 3x
22.56
0.63
10.7
7426
200
SPXU
Proshrs Ultpro St Sp 500
41.61
1.11
10.66
7764 80
TZA
Direxion Sc Bear 3X Shrs
13.48
0.70
10.4
20773 34
SRTY
Proshrs Ultpro St R 2000
34.62
1.73
667
-14
SDOW
Proshrs Ultpro St Dow 30
22.20
0.39
10.01
1656 95
SCO
Proshrs Ultsht Blom Crud
99.74
8.10
9.98
1893 24
USLV
Vs 3X Silver
23.32
0.10
9.68
561 55
GDXJ
Market Vect Jr Gld Mine
28.58
1.33
8.59
20514 -6
Screen results as of 4:01 PM Eastern, Thursday, January 15, 2015

7. ETF Trading Strategies
Index and Sector Strategies
Stay aware of market swings due to economic and earnings data, geopolitical events, and national/global news that impact financial markets
Stay tuned to which sectors and industry groups are leading and which are showing signs of weakness

8. Using Charts to Buy and Sell ETFs
Bullish: Strongly Trending
The 20 MA is above the 50 MA.
Both the 20 MA and 50 MA are rising
The distance between the 20 MA and 50 MA is large and getting larger
Pullbacks reach only to 20 MA or at most between 20 MA and 50 MA

9. Using Charts to Buy and Sell ETFs
Bullish: Weakly Trending
The 20 MA is mostly (but not always) above the 50 MA.
Both the 50 MA is rising, but the 20 MA is fluctuating (though mostly rising)
The distance between the 20 MA and 50 MA changes frequently
Pullbacks reach 50 MA, sometimes beyond but only briefly

10. Using Charts to Buy and Sell ETFs
Bearish: Strongly Trending
The 20 MA is below the 50 MA.
Both the 20 MA and 50 MA are falling
The distance between the 20 MA and 50 MA is large and getting larger
Rallies reach only to 20 MA or at most between 20 MA and 50 MA

11. Using Charts to Buy and Sell ETFs
Bearish: Weakly Trending
The 20 MA is mostly (but not always) below the 50 MA.
The 50 MA is falling, but the 20 MA is fluctuating (though mostly falling)
The distance between the 20 MA and 50 MA changes frequently
Rallies reach only to 50 MA, sometimes beyond but only briefly

12. Using Charts to Buy and Sell ETFs
Range Bound
The 20 MA spends as much time above as below the 50 MA.
The 50 MA is mostly flat, while the 20 MA varies from rising to falling
The distance between the 20 MA and 50 MA varies greatly