High Volume ETFs On The Cutline – Updated Through 5/25/2011

This past week’s pullback in the markets clearly affected the High Volume ETFs as well. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher.

These ETFs are generated from my selected list of 90 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations.

When markets correct, you can easily spot the results around the cutline (trend line), especially with those ETFs that have marginal momentum figures to begin with. They are the first ones to succumb to bearish forces. As a result, downward momentum pushed some ETFs below the yellow line and others deeper into bear market territory.

Here are some of the more dramatic moves:

Singapore (EWS) from +20 to +9

Spain (EWP) from +18 to +6

Emerging Markets (VWO) from +12 to +4

Slipping below the line were the following:

South Africa (EZA) from +8 to -1

China (FXI) from +4 to -2

Russia (RSX) from +3 to -3

If you look at the table, you’ll notice that currently only 1 equity ETF offers a buying opportunity, because of its positive momentum numbers all the way across and a low DrawDown (DD% column):

[Click on table to enlarge, copy and print]

Yes, PGF (+8) has descended from the level above the +20 position it held last week and has appeared on the screen again. While it has weakened, along with all other equity ETFs, it still represents a buying opportunity for new money, provided you use my recommended sell stop discipline.

You can never be sure if the market’s search of finding a footing over the past 2 trading days will actually result in another move up or turn out to be just another dead cat bounce. If your risk profile has you on the conservative side, you should pass on this one and wait for more upside confirmation before making new commitments.

If you are a new reader and missed the original Cutline report, which also featured some “how to use” information, please review it here.

Quick Reference:

5/17/11 issue

5/11/11 issue

5/4/11 issue

4/27/11 issue

4/20/11 issue

Disclosure: No holdings in discussed ETFs

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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