Monday, August 16, 2010

The Top 25 ETFs To Buy and To Sell For the 2nd Half Of August: Markets Are Amiss

We computed the relative strentgh indicators of all ETfs that trade in the U.S.. This indicator is extremely useful in showing which stocks (or ETFs) are overbought or oversold. Here are the top 25 most overbought and top 25 most oversold ETFs, sorted by the average of all timeframes (short, medium, and long).

The overwhelming presence of bond ETFs in these results is astounding. This may well be an indication that something is amiss.

Top 25 Most Overbought

The worst offenders in this category are all bind ETFs: EMB (emerging markets bonds), BIV (intermediate term bonds), and GBF (U.S. Govt. and corporate bonds).

Top 25 Most Oversold.

These would be the most attractive to buy based on this indicator.

The top 3 are quite interesting: IAU, PST, and TBT (click on each link to receive buy/sell alerts)IAU is the gold ETF. PST and TBT are ultra short bond ETFs (7-10 year and 20 years respectively). This clearly reflects the fact that bond ETFs are overbought.

Quite an eye opener!

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