Some Favorite ETF Sites

Since last week’s mention of ETFreplay.com as one of my favorite up-and-coming ETF sites, a couple of readers have inquired about my other favorite ETF sites.

When I think about web sites which are dedicated to ETFs, two sites immediately come to mind. Keeping in mind that these lists are highly subjective, my favorite source for information and analysis of ETFs is probably ETFdb.com, where Michael Johnston and others cover the breaking stories, but more importantly offer up some finely crafted analysis of various ETFs and some of the issues surrounding these securities. The second site is ETF Rewind, which I discussed in Some Approaches to Trading ETFs. I rarely bother with subscription services, but I find the Excel-based data and analytics packed into Jeff Pietsch’s ETF Rewind Pro to be indispensible.

Once you get past the first cut of news and analysis sources and a data analysis tool, the incremental value added for each ETF web site starts to diminish. Gary Gordon at ETFExpert.com provides some valuable commentary and does a good job of linking to other ETF-related content around the web. If you like ETFreplay.com, you should also check out ETFScreen.com. In addition to the screening tools, there is also an excellent set of performance data, some trend information derived from relative strength analysis and an ability to build a correlation matrix for any group of ETFs.

For a different way of analyzing ETFs, try Arthur Hill’s ETFInvestmentOutlook.com, which focuses on the breadth and volume of each ETFs component. This site incorporates McClellan oscillator and summation index data, McClellan volume oscillator analysis, advance-decline volume, high-low analysis and related breadth tools to come up with a bottoms-up approach to evaluating ETFs strength and weakness.

In terms of mainstream media resources, Morningstar has an ETF section that has a solid screener and set of performance data. Not surprisingly, their profiles of the ETFs are among the most comprehensive on the web. The Wall Street Journal’s ETF Research center is also a good source for similar information.

Two other sites on the periphery of the ETF universe are CEFA.com, home of the Closed-End Fund Association and an excellent source for closed-end fund information; and Roger Nusbaum’s Random Roger blog, where the not-so-random one frequently, but not exclusively, opines about ETFs and related subjects.

Readers, please chime in and flag some of your favorites in the comments section.

For more on related subjects, readers are encouraged to check out:

• ETFreplay.com Brings ETFs, Volatility and Charts Together Under One Roof
• Some Approaches to Trading ETFs
  

Disclosure(s): Morningstar is an advertiser on VIX and More; ETF Rewind and the VIX and More Subscriber Newsletter are available as part of a bundle (with Quantifiable Edges) in Blogger Triple Play

McClellan Summation Index Looking Bullish

A lot has been written about weakness in market breadth in the past week or so. With storm clouds looming over advances and declines, new highs and new lows, volume, etc., one might conclude that the breadth story is uniformly negative. Part of that interpretation depends upon whether you look at the ‘bad news’ in market breadth as confirmation of the breakdown in the broad market indices or whether you consider market breadth extremes to be contrarian indicators – at least in the short-term.

I fall into the contrarian indicator camp, but tend to focus on the intermediate term when it comes to highs and lows. Short-termers may be partial to the McClellan Oscillator; I am more interested in the McClellan Summation Index.

When I last posted about the McClellan Summation Index, it was October 25^th and I was concerned about two technical aspects of the index that I interpreted as bearish. It certainly has been a bearish month since then, but now the index suggests that we are coming out of an extreme oversold condition that should provide a bullish foundation for at least the next few weeks…so I’m back on the bull side of the fence for now.

The McClellan Summation Index

The McClellan Summation Index is named after its originators, Sherman and Marion McClellan, who developed this indicator in 1969. This index and its counterpart, the McClellan Oscillator, are tools for evaluating trends in market breadth (advancing issues minus declining issues) and should be in every investor’s toolbox.

The Summation Index and the Oscillator are derived from the same set of calculations, with the Oscillator data presented in a manner better suited to short and intermediate term trading and the Summation Index targeted at identifying changes in the longer term trend. For a more detailed discussion of the specific calculations involved, see DecisionPoint or Stockcharts.com.

For an excellent 12 month chart of the McClellan Summation Index, the Oscillator, and the NYSE composite index, I recommend the DecisionPoint combined chart that is available at Stockcharts.com.

With this indicator, I prefer to take a longer term view of the markets and therefore have included below a weekly chart of the McClellan Summation Index (also generically know as the NYSE Summation Index) going back to 2003. A glance at the chart shows that in the rally from the 2002 lows, the Summation Index has done an excellent job of calling both highs and lows in advance of market turns, with a 2-3 month warning for market highs and a much tighter warning period for lows. Also note that these highs and lows have tended to fall into a pattern of 7-12 month cycles over the past few years.

My thinking is that when an indicator is working, stay with it, especially if it is doing a good job of calling market turns.

As for the current Summation Index readings and what it augurs for the markets in the second quarter and beyond, the fact that the Summation Index is sitting right at the 39 week SMA tells me that we are more likely to be range-bound at least in the short term than moving sharply higher or lower.

Remember, we all stand on the shoulders of giants; it pays to know a little about these giants.

[source:  StockCharts.com]