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New ETF strategy for proper timing: Video Summary

New ETF strategy for proper timing: Video Summary

This video by Brian from QuantLabs.net focuses on a strategy for selecting winning out of new ETF strategy based on high momentum and outperforming sectors. Brian utilizes a custom software he developed to track various sectors and ETFs. Here’s a breakdown of the key points:

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Introduction

  1. Brian introduces a new method for selecting winning ETFs from high-momentum sectors.

  2. He highlights that over 60% of the market sectors are weaker than anticipated.


Finding High-Momentum Sectors

  1. Brian presents a list of seven market categories showing positive performance in May 2024.


New Commodity (Renewables) Sector Analysis

  1. This sector is chosen due to its positive performance in May.

  2. icln (iShares Global Clean Energy ETF) is highlighted as a potential ETF within this sector based on portfolio optimization.

  3. TradingView is recommended for researching ETFs on various timeframes (1 hour, 4 hour, daily).

  4. The Ichimoku Cloud indicator is used to assess entry and exit points.

  5. Profit factor and percent profitable metrics are crucial for backtesting the ETF’s effectiveness.

  6. While icln showed a good price increase in early May, it declined later, suggesting it might not be ideal for the last two weeks of May.

  7. UNL (United States Natural Gas Fund) is another ETF in the New Commodity sector that has seen a rise in price.


New Energy (Inflation) Sector Analysis

  1. Inflation is acknowledged as a concern.

  2. NFL (Horizon Kinetics Inflation Beneficiaries ETF) is presented as a potential ETF for this sector.

  3. This ETF has shown a steady increase throughout May.


Europe Sector Analysis

  1. Europe has been performing well in the last two months.

  2. Brian emphasizes not relying solely on financial news, which can be misleading or outdated.

  3. He advocates for using raw data for analysis.

  4. Euo (Ultra Short Euro ETF) is shown, though Brian doesn’t necessarily recommend it.

  5. Turkey and Greece are highlighted as strong performers within the European sector based on ETFs like TUR (iShares MSCI Turkey ETF) and GXC (Global X MSCI Greece ETF).


Latin America Sector Analysis

  1. The overall Latin America sector underperforms compared to the chosen strategy.

  2. ECH (iShares MSCI Chile ETF) is a potential ETF within this sector that has shown a price increase.

  3. EWZ (iShares MSCI Brazil ETF) is another ETF but hasn’t seen significant growth.


US Energy Sector Analysis

  1. This sector hasn’t performed well, likely due to oil price volatility.

  2. MLP (Adams Natural Gas MLP ETF), UG (United States Gasoline Fund), and MLPX (SPDR S&P MLP Infrastructure Index Fund) are potential ETFs within this sector.

  3. UG has seen a recent price increase.

  4. MLPX shows a good upward trend.


US Utility Sector Analysis

  1. DFSV (First Trust Utilities Select Sector Fund) is the primary ETF highlighted in this sector due to its high allocation.

  2. It has experienced a positive price increase.

US Small Cap Sector Analysis

  1. Brian isn’t enthusiastic about IWM (iShares Russell 2000 Index ETF) due to the red candles (indicating price decline) in the chart.


Conclusion

  1. This strategy focuses on ETFs from outperforming sectors and uses a conservative approach.

  2. Big Tech ETFs like XLK (Technology Select Sector SPDR Fund) are not recommended due to their negative performance.

  3. REW (Direxion Daily Semiconductor Bear 3X Shares) is mentioned as a potential ETF for shorting technology stocks, but it hasn’t been performing well.

  4. Cloud and Crypto sectors are not covered due to their overall negative performance.

  5. Brian offers more information on his website Quant Labs (labs.net) and upcoming new website.


Overall, the video introduces a method for selecting ETFs based on momentum within specific sectors. Brian utilizes various tools and metrics to analyze potential ETFs and emphasizes the importance of proper timing for entry and exit points.

Disclaimer: While this video offers insights on ETF selection, keep in mind that the financial market is complex and this information should not be solely relied upon for investment decisions.



Market sector allocations:

Category commodity_new Optimal weights: UNL 0.279452 ICLN 0.720548

Category inflation Optimal weights: INFL 1.0 **

overseas-europe Optimal weights: 0 EPV 0.194502 GREK 0.193292 * TUR 0.318928 * KEUA 0.052047 EUO 0.241231

Latin EWZ 0.375786 ECH 0.624214 **

us energy MLPX 0.629048 TAN 0.060252 UGA 0.310700

Category us_small_cap Optimal weights: 0 DFSV 1.0

Category us_utilities Optimal weights: 0 FUTY 0.0 FXU 1.0 **

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