ETF Investor Tutorials

The Trend Ranking Data Tables

The 3 Trend Ranking Database Tables are the core subscription offering where all the important trend and data analyis are held, including links to real-time charts. 

Each of the 154 ETFs in the data tables has 12 columns of unique trend data that is updated weekly on Sundays at 6pm EST. 

The 3 main data tables are:

  1. ETF Heatmap – this trend data table sorts the 150+ ETF universe into descending order of trend performance quintiles.
  2. ETF Asset Classes – this table divides the 150+ ETF universe into 9 common asset class categories, and within each category sorts in decending order of trend strength performance.  This is a way to start to put together a custom portfolio based on asset classes.
  3. ETF Portfolios – this table contains 6 popular ETF Model Portfolios that sort in descending order of trend performance within each portfolio.  You can use this as a starting point of professionally assembled ETF portfolios.

 

Getting Started with the Data Tables

There is a lot of data presented in the ranking tables so it will be good to take some time to understand how to read and interpret the trend data tables

The 2 key trend ranking (Power Score & Long Trend) columns are always color-coded to give you an “at-a-glance” easy view of top trending ETFs.  Here are some of the core trend analytics from each table:

  • Invest in the Green Zone – You’ll notice that many of the Top 1 or 2 Quintile ETFs are in the Green Zone.  This means typically both Power Score + Long Term Trend are positive.
  • Understanding Quintiles – its helpful to understand the concept of quintiles as it is the basis for our trend strength color coding of the Power Score and Long Trend rankings.
  • Power Score – this is the key ranking score that is updated weekly, drives most investor decisions and is part of the green zone strategy.
  • Long Trend – the Long Trend is a measure of an individual ETF’s trend direction and velocity and is part of the green zone strategy.
  • Alike Score – the Alike Score is a measure of how closely correlated an ETFs trend direction movement is with the broad stock market index.

If you spend some time to understand these key parts to the tables you will be doing well.  You can read more about all the trend data columns in Interpreting the Trend Data Tables.

 

What is the “Green Zone” of Investing?

The Investing “Green Zone” is the top 2 quintiles of ETF Power Score trend rankings as well as the top 2 quintiles of individual trend direction and velocity.  These ETFs have exhibited trend strength that are outperforming the broad stock market index.

Part 1 – Power Score

The Power Score is the overall measure of an ETF’s trend strength and combines a weighted average over multiple time periods of both the absolute trend momentum strength (Momo Score) and relative trend strength in relation to the Wilshire 5,000 stock market index (Edge Score) for an ETF.

Power score is also color-coded into 5 quintile colors of trend performance:

  • the 1st quintile (Top 20%) is shaded dark green
  • the 2nd quintile (2nd 20%) is shaded light green
  • the 3rd quintile (3rd 20%) is shaded yellow
  • the 4th quintile (4th 20%) is shaded light red
  • the 5th quintile (Bottom 20%) is shaded dark red

The 1st and 2nd Quintile are the top 40% of a ranking list and are collectively referred to as the “Green Zone”.  

The overall market average performance would be the middle-most point of this list at 50%.  The worst performing ETF segments are in the bottom quartiles of the list.

Part 2 – Long Trend Score

The Long Trend is a measure of an individual ETF’s trend direction and velocity.  The higher the value, the greater the velocity and slope of the ETF’s trend movement over the last several months.

Long Trend is also color-coded into quintiles because of its important status in the ETF selection process.  By selecting ETFs in the “Green Zone” you will be selecting ETFs that have greater individual positive trend direction and velocity than the market average.

Green Zone = Part 1 + Part 2

The Green Zone is a composite ranking measure of the two color-coded columns.  Staying invested in ETFs with the green zone of both columns is a winning trade over time as you can be sure the trend direction, velocity and strength on both an absolute momentum basis, and a relative momentum basis is outperforming the broad market index.

 

How to Use the NetPicks ETF Investor?

We will be publishing more documentation and videos taking you through how we use this powerful data to trade our long-term ETF portfolio.  Let me give you a few basic approaches that can provide downside protection while enjoying most of the upside in the markets:

 Power Score + Long Term Trend Strategy

  1. Buy:  When the Power Score & Long Term Trend are positive you Buy/Hold.
  2. Sell:  When the Power Score is negative Two Weeks in a Row and the Long Term Trend is also negative you will Exit your ETF.  Buy once rule #1 qualifies again on a weekly closing basis (alternate:  Two consecutive negative lower lows of the Long Term Trend and a negative Power Score)

Long Term Trend Only Strategy

  1. Buy:  When you have two consecutive “up” weeks in the Long Term Trend value (for example 0.03 week #1, 0.10 week #2).  Hold until…
  2. Sell:  When the Long Term Trend is negative and consecutively lower two weeks in a row (for example -0.03, then -0.10) then sell…buy again at rule #1

Green Zone

  1. Buy/Hold an ETF as long as it remains in the Green Zone.  Exit when leaves the Green Zone (both Power Score + Long Term Trend green)
  2. Or, Buy/Hold when in Quintile #1 or #2.  Exit when falls into Quintile #3 or below.  However, keep in mind in a very weak market you might have negative Power and Long Term Trend scores here so you might also want to qualify it that these should be positive.

 

Publishing Frequency

This trend data tables are sortable and are updated 50 times per year each Sunday by 5pm New York Time.  There will be 2 times per year it is not updated due to regular server maintenance schedules and you will receive advance notice of these server maintenance dates. 

The real-time charts always give you real-time access to the latest pricing action and are available 24/7. You will also receive real-time charts for each ETF.

Setting Your Own Portfolio Review Frequency

This is a personal choice you must make and should be related to your investment planning horizons, we do not provide e-mail alerts. 

It is important to remember that all of the trend data analytics is built from long-term trend pricing data – so it makes no sense to set a short-term portfolio review or trading frequency with this service.

Many of our long-term focused investors typically have a quarterly or bi-monthly review of their portfolio holdings to check-in with changes in the trend tables.  More active investors that are still trading long term trends will check in monthly or even weekly in some cases – the choice is yours.

It only takes a few minutes per week to check the weekly update and most weeks you have no changes so should take no more than 15-20 minutes per month even with a weekly check.