ETF XRAY

iShares FTSE/Xinhua China 25 Index (FXI)

Today FXI closed at $125.56 after a 2.31% increase. That puts FXI just off its 52 week high of $125.89.
Other noteworthy facts:
* FXI broker through a double top back at $120 when it also passed its bearish resistance level.
* There have been significant corrections to the downside like back in January and February. It would be wise to establish an exit strategy to capture any significant gains.
* Last year around this time FXI remained in demand for seven months and went from $70 to $118. (The past is no guarantee of the future)

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By DE Smith of MyPortfolioView

Russell 2000 (IWM) Breaks Resistance

Arthur B. Hill of ETF Investment Outlook - pointed out back on June 1 that IWM is back above resistance and small-caps are showing some leadership. IWM broke above consolidation resistance at 83 on Tuesday and closed above this level the last three days. The move signals a continuation of the Mar-Apr advance and the next upside target is around 88.

The March-April advance was roughly eight points and a similar advance from the May low at 80 would extend to around 88.The breakout is bullish until proven otherwise and there are two levels to watch for signs of trouble. First, the resistance breaks at 83 turns into support. This is at least the third breakout attempt and a strong ETF should hold its breakout. A move back below 83 would be negative. Second, IWM should hold key support at 81.5. The March trend line, 50-day SMA and late May low all converge to mark support here. A break below 81.5 would represent a total failure and reverse the medium-term uptrend.

DE Smith

Telecom HOLDRs (TTH) Dominated by Two Giants

Telecommunication has evolved in the last two decades into a dynamic global business sector driven by mobile services, data communication, and the Internet, and e-government and e-commerce applications. As the sector evolves from monopoly to competitive market structures, governments formulate the legal and regulatory frameworks in which private companies can compete to provide services.

There are some very impressive and powerful companies in the telecommunications sector like AT&T Inc, and Verizon Communications. One of the most popular exchange traded funds in this sector is TTH with nearly 75% of its assets in two giants.

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DE Smith of MyPortfolioView

Fundamental Indexing

PowerShares introduced an exchange traded fund based on fundamental indexing in December 2005. Since then, PowerShares FTSE RAFI U.S. (NYSE:PRF) has returned 18.86% for 2006, while the S&P 500 returned 13.62%. Year to date, the ETF has returned 9.01% against the S&P's 7.46%.

Fundamental indexes are different from traditional indexes because stocks are not weighted by market capitalization. The S&P 500, for example, gives the biggest weight to stocks like Exxon Mobil. Other indexes equal-weight the companies, but that is still taking market cap into account.

Fundamental indexes weight stocks according to measures of "true" size, such as sales, cash flow, book value and dividends. The idea is to give a better reflection of a company's impact on the market, says Jason Hsu, director of research at Research Affiliates. Research Affiliates designed the index PowerShares uses. Read More

DE Smith MyPortfolioView

Oil Services HOLDRs (OIH)

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52 –Week High $173.15 (May 21, 2007)
52 – Week Low $118.19 (October 4, 2006)
Average Price: 50 day MA $154.07 | 200 day MA $140.14

LARGE-CAP ETFS HEAT UP

Large-cap firms have turned up the heat in recent sessions. The Dow Jones Industrial Average recently hit a string of record highs. Many corporate giants still delivered better-than-expected earnings this season. The world's biggest software publisher, Microsoft, recently reported a 56% jump in profit, its best performance in many quarters.

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DE Smith of MyPortfolioView

iShares Goldman Sachs Natural Resourc (IGE)

IGE is tracked in the materials sector along with SLX, XLB, and XME. All four have done exceptionally well and are responsible for materials being the top sector year to date. With these types of short term gains

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By DE Smith of MyPortfolioview

China's Booming Trade Surplus

May 2007 ISI | The State Administration of Foreign Exchange (SAFE) recently released the government's official figures for China's balance of payments in 2006. On the back of a booming trade surplus, the country posted an enormous current-account surplus of US$249.9bn, equivalent to an estimated 9.2% of GDP and up from 7.1% the previous year. The rise in the surplus will provide further ammunition to critics of China's exchange-rate regime, leading to more pressure for more rapid renminbi appreciation. Domestically, the huge size of the surplus is likely to aggravate problems associated with excess liquidity in the economy, given the large inflows of foreign currency requiring conversion into renminbi that such a surplus implies.

An awesome trade machine
Observers were already expecting balance-of-payments data to show an extraordinarily large merchandise trade surplus, given that previously released customs data (which are calculated differently from balance-of-payments numbers) had already shown exports exceeding imports by US$177.5bn in 2006. In the event, as the balance-of-payments figure for imports was significantly lower than the customs figure, the trade surplus in balance-of-payments terms worked out at US$217.7bn. This was up from US$134.2bn in 2005 and accounted for 87% of the total current-account surplus last year. (Read More)

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DE Smith of MyPortfolioView

SPDR S&P Metals & Mining (XME)

SPDR S&P Metals & Mining (XME) The below point & figure chart illustrates one of the best performing ETFs YTD which is in the Materials sector. Since 1915, Commercial Metals Company (CMC) has manufactured recycled and marketed steel and metal products and related materials around the world. CMC is an efficient, high quality, low-cost producer and is one of the few steel companies with investment grade public debt ratings. CMC has a high degree of vertical integration and is organized into five business segments: Domestic Mills, CMCZ, Fabrication, Recycling, and Marketing & Distribution. CMC is the top position of XME with 4.06%.

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By DE Smith of MyPortfolioView

iShares Dow Jones US Industrial (IYJ)

The top position in iShares IYJ is General ELectric Co. to the tune of 18.23%. General Electric Co. is involved in a multibillion- dollar engine project along with Britain's Rolls-Royce Plc for the F-35 Joint Strike Fighter. The U.S. House of Representatives Armed Services Committee voted to force the Pentagon to fund further development of the engine -- (Read more).

Morgan Stanley India Investment Fund, Inc. (IIF)

Back in February IIF broke a triple bottom at $47 and today it closed at $42.56. It’s important to track supply and demand in order to avoid serious pitfalls which cost you money. In the case with IIF had you sold at $47 when it broke a triple bottom you would have saved yourself 9% in additional losses. IIF has just reversed into a column of O’s and is threatening to break another triple bottom.

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DE Smith | MyPortfolioView.com

Ultra Semiconductor ProShares (USD)

Exchange-traded funds tracking the chip sector were among the best performers today. A new comer (USD) ProShares Ultra Semiconductors closed the day up 3.96% for a total YTD gain of 18.31%.

DE Smith | MyPortfolioView.com

iShares S&P 500 Growth Index (IVW)

IVW Ishares S&P 500 Growth has come up short to its brother IVE on the value side. Since May 2003 IVW has grown by 41% or 8.20% annually. Top five holdings are: 1) Exxon Mobil 6.97%; 2) Procter Gamble Co 3.24%; 3) American Intl Group Inc 2.84%; 4) Johnson and Johnson 2.83%; 5) Cisco Systems Inc 2.5%.

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By DE Smith of MyPortfolioView.com

iShares S&P 500 Value Index (IVE)

IVE Ishares S&P 500 Value has had a nice run since May 2005 when it broke through it bearish resistance. In Five years IVE has gained 78% that’s better than 15% annually. The top five holdings: 1) Citigroup Inc with 3.83%; 2) AT&T Inc has 3.75%; 3) Bank of American 3.47%; 4) General Electric Co 3.32%; 5) JP Morgan Chase Co 2.56%.

By DE Smith of MyPortfolioView.com

ETFs Better than Diamonds

What is still the most-quoted market indicator in newspapers, on TV and on the Internet – the Dow Jones Industrial Index (DJIA) which has recently made historic highs. But it may be out of date and there may be better ETF options than the Dow Diamonds (DIA) to tap into the mega-cap trend.

I suggest that investors might be better off trading their Diamonds for the Rydex Mega 50 ETF (XLG) which tracks an index of the largest fifty U.S. stocks. Another good pick would be (SDY) whose basket includes the 50 highest yielding stocks in the S&P 1500. If you think the Dow is overbought you might consider the new Pro Funds ETF that moves inversely to the Dow and trades under the apt symbol (DOG).

Because the DJIA is made up of exclusively U.S. companies and by definition focused on industrial companies, it does not accurately reflect the performance of large swaths of the U.S. or global marketplace. There are a lot of good companies in the DJIA but it is no longer a good barometer of the American economy or the typical American portfolio nor a useful index for investment vehicles to track.

Another ETF to consider is the S&P Global 100 ETF (IOO) that includes exposure to 100 of the largest companies in the world. About 50% are American companies.

By Carl Delfeld of the Chartwell ETF Advisor

iShares Dow Jones Transportation Average (IYT)

IYT iShares Dow Jones US Transportation Index has recently reversed negatively into a column of O’s. IYT has hit $94 twice this year only to fall back, once in February and again in April. In three years IYT has appreciated 78% for an annualized average gain of 26%. Despite the exceptional growth there have been periods of correction such as last May through September when IYT gave up 17%. During that period of time especially July - September the transportation sector fell out of favor. If IYT breaks through its bullish support line of $86 and hits $85 it will form a double bottom below it bullish support and generate a sell signal.

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By Don Smith of MyPortfolioView

iShares MSCI Austria Index (EWO)

Austria has had a great couple of years. Though it started out the year a little bumpy the value of 100 shares as tracked by this chart is up 11% YTD. At the top of the chart is a summary of the position owned showing a 47.40% increase in value since January 3, 2006.

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By DE Smith | MyPortfolioView.com

iShares S&P SmallCap 600 Growth (IJT)

The Dow Jones industrial has shot past 13,000 for the first time in history on stronger-than-expected earnings reports. Growth ETFs like iShares S&P Small Cap 600 Growth fund (IJT) have also performed very well. The below point & figure chart shows IJT hitting its own all time high. A word of caution: Last year IJT hit a five year high just prior to a correction in the market were it fell 14%. Be smart about maintaining proper asset allocation in this time of record highs.

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DE Smith of MyPortfolioView

Dividend Oriented ETFs

Some active exchange-traded funds have overly complicated models and high turnover rates but Morningstar's Sonya Morris highlights the Vanguard Dividend Appreciation ETF (VIG). This is a dividend-oriented fund that tracks the Mergent Dividend Achievers Select Index, a market-cap-weighted index of firms that have increased their dividends in each of the last 10 years. But Vanguard goes a step further by developing quantitative screens that are applied to the benchmark to identify those companies that are most likely to continue to grow dividends over time. For example, recently it tossed out names such as Citigroup C, Pfizer PFE, and Chevron CVX because the model indicated that these companies may not be able to increase their payouts as time goes on.

Morningstar goes on to base its recommendation on the reasoning that companies that have the financial resources to grow their dividends for 10 straight years are generally solid franchises so it's not surprising that this fund dedicates almost 70% of its portfolio to stocks with strong balance sheets and a competitive edge. Dividend growth is an excellent sign of financial health, and this fund's portfolio has a cumulative return on equity higher than most competing ETFs.

The WisdomTree family of ETFs also has the bulk of its ETFs selected and weighted by their cash dividend records and is another alternative for ETF investors on the hunt for yield with quality. Lastly, the Powershares International Dividend Acheivers (PID) ETF invests in a basket of ADRs that have solid dividend records.

By Carl Delfeld of the Chartwell ETF Advisor

Consumer Discretionary SPDR (XLY)

Top 10 Holdings
HOME DEPOT INC 7.01%
TIME WARNER INC NEW 6.63%
COMCAST CORP NEW 4.60%
LOWES COS INC 4.25%
VIACOM INC 4.11%
EBAY INC 4.03%
TARGET CORP 3.94%
DISNEY WALT CO 3.76%
MCDONALDS CORP 3.46%
NEWS CORP 3.09%
Total 44.88%

The top ten holdings of Select Sector SPDR-Consumer Discretionary - XLY make up 44.85% with Home Depot Inc. taking the lion share with 7.01%. The chart above illustrates the supply and demand battle of 100 shares of XLY since January 3, 2006. As you can see XLY has not disapointed and remains firmly positioned in a column of X's or in demand.

XLY - 50 day moving average - 38.75 | 200 day moving average - 36.24

By Don Smith of MyPortfolioView.com

Advantages of the Preferred ETF

Preferred stocks have the primary advantage of high yields which is an important consideration for baby boomers trying to stetch their nest egg. Will McClatchy of ETFzone writes about the pluses and minuses of the iShares S&P U.S. Preferred Stock (AMEX:PFF) which is an exchange-traded fund or ETF that has a basket of the most liquid and high yielding preferred stocks in its basket. Here is how preferreds stack up against the competition according to Standard and Poors.

Preferred Stock 6.4%
Bonds 5.4%
6 Month CD 4.6%
Money Market 3.3%
Common Stock 1.8%

Currently, the ETF has 44 companies in its basket with Ford Motor Company's preferred stock at the top of the list. The next 9 are financial companies of one sort or another, including Met Life and Citigroup, and financial firms dominate the remainder of the list.

By Carl Delfeld of the Chartwell ETF Advisor

iShares MSCI Australia Index (EWA)

Australia's economy grew twice as much as forecast in the fourth quarter as consumers and companies increased spending. Gross domestic product rose 1 percent from the third quarter, when it expanded 0.3 percent, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 25 economists was for a 0.5 percent increase.

"The bulk of the Australian economy, which is in wholesale and retail and manufacturing and service industries, is being kept strong by high employment levels and rising wages,'' Treasurer Peter Costello said in Canberra today.

Woolworths Ltd., Australia's biggest retailer, said sales in the three months to Dec. 31 rose 11.5 percent from a year earlier. (AMEX: EWA). Invest with caution,.

More Technical Stuff on EWA:
Moving Averages:
50 day – 24.47
200 day – 21.81

Top Five Holdings -
BHP Billiton Ltd - 9.86%
National Australia Bank Ltd - 7.04%
Commonwealth Bank of Australia - 6.95%
Australia and New Zealand Banking Group Ltd - 5.78%
Westpac Banking Corp - 4.99%

DE Smith of MyportfolioView.com

iShares MSCI Mexico Index (EWW)

Today the ETF of the day comes from the Region of Latin America. This is a very hot region which has posted better than average returns in all three of the regions ETFs. Exchange Traded Fund EWW - iShares: MSCI Mexico is our choice today which advanced 3.96% yesterday.

The Mexican economy is gaining momentum, having grown 4.5% in 2006. Internationally minded investors looking to spice up their holdings with a shot of that economic hot sauce might consider the iShares MSCI Mexico Index (AMEX: EWW). Invest with caution, though -- despite its fine performance, the fund has a few glaring weaknesses.

EWW has its heaviest sector exposure in Wireless Telecom, at 27%, with 15% in construction materials and 12% in diversified telecomm.

More Technical Stuff on EWW:
Moving Averages:
50 day - 51.82
200 day - 44.90

Top Five Holdings -
America Movil SAB de CV 22.63%
Cemex SA B de CV 15.51%
Telefonos de Mexico SA de CV 9.06%
Wal-Mart de Mexico SA de CV 4.99%
Grupo Televisa SA 4.80%

iShares Silver Trust (SLV)

Ishares Silver Trust SLV has a very interesting point and figure chart which reminds me a little bit of the weather – “always changing”. I’ve selected SLV as my ETF of the day to illustrate volatility.

Take a look at the last three months for an example:
December: High 142 – Low 124 (-13% correction)
January: High 140 – Low 122 (-13% correction)
February: High 146 – Low 140 (-4% correction)
March: High 138 – Low 126 (-9% correction)

Before taking a position in SLV you should consider its history of volatility. Establish with your advisor an exit strategy before investing. The purchase of any security requires proper planning and SLV is no different. As illustrated below 13% reversals are common with SLV. However, a modest position in this commodity can yield above average gains.

By DE Smith of MyPortfolioView.com

Vanguard REIT Index ETF (VNQ)

Today’s Exchange Traded Fund of the day is Vanguard’s REIT Viper (VNQ). This popular REIT seeks income and moderate long-term capital growth. The fund normally invests at least 98% of assets in stocks of real estate investment trusts (REITs) that are included in the Morgan Stanley REIT index.

Point & Figure Chart Evaluation:
VNQ’s point and figure chart shows a pattern of steady growth. There have been corrections over the last two years but they have each been followed with significant rebounds. The most recent reversal came just after VNQ hit its 52 Week High of $87.44. Today VNQ is in a column of X’s trading well above its bullish support.

Fundamentals on VNQ:
Performance – 1 year 30.58%
Year to date return: 5.71
Dividend Yield: 5.14%
Average Price/Earnings Ratio: 17.19
Number of holdings: 101

Top 5 Holdings
% of assets / Description / Column
6.03% | Simon Property Group [X] Recent reversal to demand status
4.49% | Equity Office Properties Trust [X]
4.18% | Equity Residential [O] Broke double bottom
4.12% | ProLogis [X] Near double top
4.01% | Vornado Realty Trust [X] Recent reversal to demand status

By DE Smith of MyPortfolioView.com

Vanguard Utilities ETF (VPU)

Today’s Exchange Traded Fund of the day is Vanguard’s Utilities Viper (VPU). The investment seeks to track the performance of a benchmark index that measures the investment return of utilities stocks. From May 2006 until February 2007 VPU maintained a very strong demand status moving from $65 to $84 a share. After a modest reversal VPU is back in a column of X’s and trading at $79.99.

Fundamentals on VPU:
Performance – 1 year 22.65%; 3 year 20.07;
Performance since inception – 20.17% (1/26/04)
Yield: 2.71%
Expense Ratio: 0.25%
Number of holdings: 89

Top 5 Holdings
% of assets / Description / Column
7.37% | Exelon Corp [X] – Recent reversal back to demand
7.08% | Duke Energy Corp. [O] – Major reversal in Jan.07 from $34 to $19
5.11% | TXU Corp. [X] – Nicely positioned in a column of X’s
5.05% | Dominion Resources Inc. [O] – Broke a double bottom
4.62% | Southern Company [X] – just off its 52 week high

By DE Smith of MyPortfolioView.com

PowerShares Dynamic Market (PWC)

Today’s highlighted ETF is PowerShares Dynamic Market (PWC). This ETF seeks to replicate the Dynamic Market Intellidex. In October 06 PWC broker a double top when it hit $50. It continues to maintain a strong column of X’s well above its bullish support line.

Fundamentals on PWC:
Performance – 1 year 11.60%; 3 year 15.14%; 5 year 13.06%
Price to Earning ratio: 14.62
Price to book ratio: 2.96
Number of holdings: 100

Top 5 Holdings
% of assets / Description / Column
3.35% | Baker Huges Inc [O] – Reversed into supply and is below its bullish support
3.19% | Exxon Mobil Corp. [X] – Threatening a reversal into a column of O’s
3.17% | General Mills Inc. [O] - In a column of O’s still above its bullish support
3.16% | PepsiCo Inc [O] – In a column of O’s still above its bullish support
2.62% | Boeing Co. [X] - In a column of X’s yet down from 52 week high

By DE Smith of MyPortfolioView.com

Vanguard REIT Index ETF (VNQ)

First Purchased: 01/03/2006
Cost Basis: $59.94
Quantity: 193
TOTAL COST: $11,568.42
CURRENT VALUE: $15,208.40
GAIN/LOSS: $3,639.98

The point & figure chart above is tracking 193 shares of VNQ purchased Jan.3, 2006. The position has performed nicely since that date to the tune of 31.46% to the upside. It has given up 9 points since its high back in February when it hit a 52 week high at $87.42. VNQ boasts a nice dividend yield of 5.14%. With strong fundamentals this REIT should weather the recent storms on Wall Street.

By DE Smith of MyPortfolioView.com