Author: Gerry Wollert, Rebound Trading
Disclaimer: Gerry owns EZA, IDX and DGS in his Covestor Rebound ETF model.
October 4, 2010: Despite its historical reputation of being one of the worst months of the year for the Stock Market, September 2010, turned out to defy the odds. In fact, it was one of the strongest Septembers in over 50 years! I do not try to predict what the market is going to do next month, next quarter, or next year. Rather, I rely on my momentum models and strict buy criteria to tell me when it is safe to be invested in the market. I also use a strict stop loss and profit-protect discipline on every trade to let my profits run and minimize my losses. Note: Covestor does not utilize stop losses in its replication process.
I was fully invested in my Rebound ETF Trader portfolio for the entire month of September. Some of the standout performers are:
- EWM (iShares MSCI Chile )
- EZA (iShares MSCI South Africa)
- IDX (Market Vectors Indonesia)
- DGS (Wisdom Tree Emerging Markets Small Cap)
I have been trading Mutual Funds and ETFs for over 20 years. During the last two decades I have seen International Mutual Funds and International ETFs rotate in and out of the top tier of my momentum models. It is interesting to note that all of my top performing ETFs are International ETFs. This is because of the fact that the International ETFs are now at the top of my momentum universe – this was not the case as recently as six month ago.)
I use an upgrading strategy to continually upgrade my portfolio with the best performing ETFs. When they start to lag, I replace them with an ETF that is exhibiting stronger growth momentum. I have no idea how long the International ETS will lead the pack, but I will enjoy the ride as long as they do. When the U.S. Dollar is weak, as it is currently, you enjoy the added benefit of the impact of exchange rate differential trends.
My Rebound Solo Trading System (not licensed to Covestor) trades only one stock at a time. Some standout performers are:
- ANV (Allied Nevada Gold Corp.)
- LZ (Lubrizol Corporation)
- SWC (Stillwater Mining company)
- FOE (Ferro Corp.)
- KMX (CarMax Inc.)
My long and short term market timing models remain bullish so that is the stance I am taking as we begin trading in October.
