According to IndexUniverse, IndexIQ has filed to release an additional 15 ETFs that will follow the recently launched Multi Strategy Hedge Fund ETF (QAI) which doesn’t invest in hedge funds and is not a hedge fund but seeks to replicate the hedge fund multi-strategy index using a variety of strategies from emerging markets to fixed income arbitrage, to long/short, etc. Essentially what you get is a return close to the overall market so not an ETF I’m all that interested in. I might be interested in a few of the next 15 from IndexIQ, some of which will hone in on specific strategies.
My favorites are:
– IQ CPI Inflation Tracker ETF – IQ Hedge Distressed Tracker ETF – IQ ARB Merger Arbitrage ETF – IQ ARB Global Real Estate ETF – IQ ARB Global Infrastructure ETF
I’ll have more on these after they launch. Most important will be liquidity.. if the liquidity isn’t there which is likely, I won’t touch them.
I’m going to start doing some more chart analysis here at ETF Central.. in fact I’m going to do more posting in general. Today, I take a look at the Direxion Financial Bull 3x ETF (FAS) which is part of a family of ETF’s from Direxion that offer triple leverage (in theory) on both sides of the market. There has been quite a bit of discussion recently about leveraged ETFs and how you should avoid them because they can kill a portfolio. Nonsense! Of course if not used properly any trading instrument will kill a portfolio. Much of discussion centers around the fact that the performance of the leveraged ETF’s can vary dramatically because they seek daily investment results and many times not return 2x or 3x the underlying index over longer time periods. While this is true and the longer you hold these ETF’s the more out of whack their performance may be, for shorter time periods, they offer tremendous trading vehicles. Volume levels have absolutely exploded in all of the Direxion ETFs including FAS which today traded over 315 million shares! It’s astonishing when you consider that Microsoft, IBM, Apple and Google combined don’t trade anywhere near that many shares.
Anyway on to the chart..
Financials have been on tear over the past few weeks and that’s reflected in the chart of the Direxion 3x Bull Financials ETF below. The sharp V like move off the bottom has run it right up into resistance around the 50 day moving average which it tested today before reversing on heavy volume. I think this sets it up for some short term weakness and a possible retest of the area around 5, but once the consolidation is complete look for a run up to the downtrend line around 8. If it can get through that level, the next area of resistance is around the November lows & Feb/March highs around 12. After a major correction, you typically get a big initial move up followed by a retest of the lows before the ultimate bottom can be put in, so watch for that once this March surge has run its course.
Forgive the lack of clarity in the chart.. I forgot to create the smaller chart so had to squish it a bit.
