ETFs: Technical Analysis vs. Trend Following | ETF Trends

If there’s any trend in the markets right now, it might be that of technical analysis. But is this the best way to put exchange traded funds (ETFs) to use in your portfolio?

Josh Lipton of Minyanville spoke to a few experts about increasing popularity of such analysis in a recent article. According to Sam Stovall of S&P, “People were so taken by surprise in 2008. The technicians saw it. The fundamentalists didn’t. We ended up with a bear market of 57%.”

(From May 31, 2008 to Dec. 31, 2008, the SPDR S&P 500 (NYSEArca: SPY) was down 35.7%.)

Kevin Depew at Minyanville was one such technician to have seen a technical sell signal in the form of the long-term monthly TD Sequential Sell Signal in May 2008. It had been the first sell signal since March 2006.

According to Stovall, fundamentals tell you “what,” but technicals tell you “when.”