December Winners: ETF PowerRatings, Climate Talks and the Energy Rally
Blame it on Copenhagen?
Remember the first half of December, when crude oil prices were plunging? If you follow exchange-traded funds (as you should), the massive pullback in oil looked something like this in the United States Oil Fund ETF
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PowerRating).
The sort of oversold extremes we saw in the USO are one reason why, when it comes to trading exchange-traded funds, we tend to stick with country and equity index ETFs. Commodity ETFs have a tendency to “run”, becoming more extremely overbought or oversold for longer durations compared to other funds. So while commodity ETFs can be very helpful for analyzing the market, we tend to focus on other ETFs when looking for the very best high probability trading setups.
For example, part of that monitoring of ETFs like USO helped spot situations like the ones that developed in a number of energy-related country and sector ETFs in the first half of December.
Consider the PowerRatings chart of the Market Vectors Russia ETF
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PowerRating) above. This ETF earned an ETF PowerRating of 10 on December 9th. An ETF PowerRating of 10 is our highest rating, signifying a fund that has made significant short term gains nearly 80% of the time in our testing. These backtests go back to 2003 and involve thousands of simulated trades in a wide variety of exchange-traded funds.
On December 9th, the RSX closed with an ETF PowerRating of 10 and a price of 29.87. Five days later, as the chart shows, RSX closed at 31.69, gaining more than 6%.
Here’s another example of the kind of opportunity that presented itself during the “collapse” in crude.
The First Trust ISE-Revere Natural Gas ETF
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PowerRating) closed with an ETF PowerRating of 10 and a price of 15.77 on December 9.
Three days later, the fund closed more than 7% higher at 17.01.
These are just a few recent examples of top ETF PowerRatings fund in action. While not every top-rated exchange-traded fund will provide the exact same gains as those noted here, the short term performance of RSX and FCG is exemplary of what our testing in ETFs has allowed us to conclude: in the short term, top ETF PowerRatings reveal significant edges in exchange-traded funds that high probability traders can consistently take advantage of in the market. For short term traders looking for strategies for finding the best ETFs to trade every day, ETF PowerRatings may be a big part of the solution.
Isn’t it time you gave PowerRatings a try? Our top-rated ETFs have been correct nearly 80% of the time since 2003. Click here to launch your free, 7-day trial to our ETF PowerRatings today!