GLOSSARY OF TERMS USED:
1. 4Wk, 8Wk, 12Wk and YTD refer to how these funds have performed or “appreciated” during these various time periods.
2. %M/A (39-week Simple Moving Average) shows how far above or below its long-term trend line a fund/ETF is currently positioned.
3. “From 10/25/11” shows a fund’s performance since the date a new domestic Buy Cycle started. “From 8/21/12” shows a fund’s performance since the date we bought our International positions.
4. DD% (DrawDown percentage) measures the drop from a fund’s high to its current price during the past year.
A fund that shows 0.00% has just made a new high. That’s good news because it confirms that it is moving up given current economic conditions. It is therefore in tune with market momentum.
Conversely, a fund with a large negative DD % number is a lagging performer and should not be purchased at this time.
5. MaxDD% (Maximum DrawDown percentage) is not shown in these tables, but you will find me mention it quite frequently.
If you were to go back to the beginning of the most recent buy cycle (10/25/2011), as generated by my Domestic Trend Tracking Index (TTI), and measure DD% for a given ETF every trading day, and then select the worst (largest) DrawDown number, you would have the information that I call MaxDD% (Maximum DrawDown Percentage).
This number allows me to look back at anytime and see which ETFs have held up best and never hit our 7.5% sell stop.
Those are the ones with a low MaxDD% (low volatility) number and may be among my primary selections for the next Buy cycle.
6. M-Index (Momentum Index) shows the average non-weighted momentum ranking of a fund or ETF. The average is calculated from the existing 4wk, 8wk, 12wk and YTD momentum numbers. The higher the number, the more upside momentum a fund has. However, volatility is increased at the same time. If you’re conservative, drop down a few numbers from the top of the ranking food chain.