An ETF Showing Accumulation?

There are 24 major index and sector ETFs I track. Many of them have good seasonal patterns, meaning track records over the next few months, but for the next few weeks there isn't much to trade on.

For example, XLE, the Energy Select Sector SPDR, has the best seasonal pattern right now. Over the next 13 weeks, XLE has risen an average 8.8%, with gains in 15 out of its 17 year history (an 88% ‘win rate'). That sounds tradable. But just over the next few weeks it has averaged only 2-3%, and the ‘win rate' is much lower (13 out of 17 years, or 76%). I'm not inclined to take a longer-term chance right now, with the market and the economy in flux, and that short-term track record doesn't interest me.

Another thing I look for is evidence of institutional accumulation within one or more sectors. I look at volume patterns on daily charts, but something else I look at is the Up/Down Volume Ratio, popularized by Investor's Business Daily.

Up/Down Volume Ratio (U/D) is the ratio of total volume on up-closing days, divided by the total volume on down-closing days, over 50 trading sessions. A value > 1.0 usually indicates more buying than selling interest, and a value < 1.0 indicates greater selling. In practice, I use a value greater than or equal to 1.3 to indicate strong accumulation, and a value less than or equal to 0.8 to indicate distribution.

So my list of 24 ETFs is:

DIA, EFA, EEM, GLD, IWM, IYC, IYE, IYR, IYF, OIH, QQQ, RTH, SMH, SPY, TLT, XLB, XLE, XLF, XLI, XLK, XLY, XLP, XLU, XLV.

I looked up the current U/D ratio for each of them, to see what volume patterns are telling me.  So for the ETFs of the major indexes, DIA, SPY, QQQ, and IWM have ratios of 0.9, 0.9, 0.9, and 0.7 respectively. These numbers all point to moderate distribution in the major indexes. There is certainly no evidence of a building-up of upward pressure.

Only two of them had U/D ratio's greater than or equal to 1.3, which I found usually indicates strong accumulation.  The first one is TLT, the iShares Barclays 20+ Year Treasury Bond ETF. Its U/D comes in at 1.5. But TLT is not an ETF I usually think of as tradable. It remains an interesting datapoint that I sometimes look at, but I don't trade it.

The other ETF is a tradable one. Can you guess which one it might be?

The other ETF that is showing signs of accumulation over the past 50 trading sessions, with a U/D of 1.3, is a very tradable one – it is GLD, the SPDR Gold Shares ETF. And have you noticed GLD is breaking above the August 2015 highs on higher volume?

I thought you might like to know this.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

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Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

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MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.