Monday, May 20, 2013

There has been remarkable stability in the rankings over the last week with the mentioned energy and foreign funds still occupying similar positions and the PowerShares Dynamic OTC Portfolio Fund (PWO) still leading both Quant and the Green Diamond Reward models.  Scoring better for the last few weeks and making the top 10 for most of the past week is today’s 9th place iShares PHLX SOX Semiconductor Sector Index Fund (SOXX) with 8.6 Green Reward Diamonds and a lower than average 4 Red Risk Diamonds.

SOXX has usually scored and ranked well but the only time it was in the top 10 as consistently as the past week was back in December when it went on to outperform a strong US market in subsequent months.  Falling out of the top 100 on February 6th signaled a period of underperformance that ensued until mid April.  Its 3rd place rank driven by a high sentiment score on April 2nd was an early signal that it was ready to rally again and those sentiment readings are most responsible for its top 10 position for 4 of the last 5 days.  Sentiment scores are the more volatile of the ETFGsm models and SOXX has varied option activity making its scores more volatile than many.  A one day zero put/call score pushed it out of the top 100 on May 8th which is a reason to look at this one over a period of days and the last week has seen those puts elevated the whole time.

It is ranking better now than it was during that stretch in December but on lower Total Quant Scores.  Back then SOXX had a Fundamental Score above 80 which after rallying more than 20% has come down to 62.8.  Its Behavioral Score is better now with technical above 70 and sentiment above 80 all distilling to a Total Score of 68.9.   Only 5 funds have Total Quant Scores above 70 today compared to 20 or more typically scoring above that level in December.   SOXX looks like its recent outperformance will continue but at 1,000 points above the S&P 500’s 2009 low, we probably shouldn’t expect another 20% before year end.  If you would like some historical perspective on a fund you follow, please ask us at  Thanks for reading and good luck this week.

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