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ETF Periscope is written by Daniel Sckolnik. In addition to a lively market analysis, Daniel scans Sabrient’s SectorCast-ETF Rankings weekly to find a few ETFs that meet the current landscape of the markets.
The SectorCast-ETF Rankings consist of over 340 ETFs (exchange-traded funds) that are ranked and scored via sixteen of Sabrient’s proprietary analytics, that, when taken as a whole, offer a forward-looking take on the markets. Daniel scans the top 10-15% of the weekly rankings (which are updated three times weekly). He limits his choices to one ETF per sector, in an effort to achieve a healthy level of diversification.
Among the analytics he pays particular attention to is what Sabrient terms “Bull Score” and “Bear Score.”
The Bull Score offers a “technical” measure of how underlying stocks performed on “up days” in the broader market during the last two month’s action. The higher an ETF’s Bull Score, the better it has performed on recent up days in the market.
The Bear Score — the flip-side analytical — indicates the reverse. The higher an ETF’s Bear Score, the better it has performed on recent “down days” in the market. A high Bear Score implies a “defensive” ETF.
The Bull Score and Bear Score are among the tools that Daniel incorporates into the overall hedging equation. His ultimate goal is to craft a hedged, lower-risk portfolio that protects against the markets inevitable gyrations while continuing to allow for upside potential.
Next, he looks at the ETF’s chart, seeking divine inspiration, or, failing that, at least a high level of technical confirmation via support and resistance levels, simple moving averages, etc.
Finally, he checks to see if the ETF offers options, which he frequently uses in place of buying shares in the ETF itself.
In selecting ETFs to cover the short side of the portfolio, he flips the process, scanning the bottom 10-15% of the Rankings and adapting the Bull Score/Bear Score analytic as appropriate.
Disclaimer: ETF Periscope is published solely for informational purposes and is not to be construed as advice or a recommendation to specific individuals. Individuals should take into account their personal financial circumstances in acting on any rankings or stock selections provided by Sabrient. Sabrient makes no representations that the techniques used in its rankings or selections will result in or guarantee profits in trading. Trading involves risk, including possible loss of principal and other losses, and past performance is no indication of future results.