Exceptionally Accurate Investment Signal
Composites Built from 50+ Indicators

Rather than attempting to forecast the future–which has long been a preoccupation of the investment industry (with highly inconsistent results)–our firm uses the scientific method to identify evidence-based, high-correlation relationships between proven indicators and intermediate-term ETF price performance.

Diversification of Indicators Used in Our Premium Strategies
We have systematically developed and tested more than 50 Point-In-Time (PIT) data series that are highly predictive for identifying intermediate-term (2 weeks to 6 months) ETF performance. From these 50+ indicators, we have created uncorrelated risk-identification rules and ETF ranking systems for each of our Premium Strategies. Minimizing risk and reducing drawdowns is the objective of these indicators.

Each Premium Strategy uses a combination of 5-10 of the indicators listed below. The indicators selected for each strategy are uncorrelated from one another, but they are combined with an approach-theme in mind, such as Momentum, Mean Reversion, Trend-Following, High Growth, Sector Winners, Market-Segment Winners, Industry Winners, Fixed Income Reversion-to-the-Mean, and more...

Our ULTIMATE 6-Model (9 ETF) COMBO Strategy combines six different uncorrelated approaches for diversification of the 5-9 ETFs it selects, accompanied by diversification of indicators within each approach. The model's consistent performance with 100% winning years is a testament to the effectiveness of this method of risk mitigation and ETF selection.

The ETFOptimize Indicators include these 50+ data series:

• Macroeconomic Indicator Series ($MI) - includes the Yield Curve trends for multiple spread composites - including the Ted Spread, Corporate AAA / Corp BBB Bond spread, High-Yield Bonds / Treasury Bonds. This category also includes the Consumer Price Index trend, US Dollar Relative Strength, Relative Profit trend for the Nine S&P Sectors, Consumer Sentiment trend, ETF Fund Flow trend, Industrial Production trend, Market Segment and Sector Relative Strength Comparison, Sector/Segment Fund Flow trends, High-Yield Bond trend, Sector Relative Growth status, Stock/Bond Relative Strength Ratio and other Bullish/Bearish pair indicators, such as Copper/Gold Ratio, Equity/Money-Market Ratio, Speculative vs. Defensive Shares trend, etc.

An increasingly important macroeconomic factor is the persistent intervention of the Federal Reserve in capital markets. The Fed's infusion of more than $5 Trillion into financial markets following the Covid Crash in 2020, including as much as $120 billion per month added through June 2022, severely distorted equity prices. Therefore, in late-2020, we added a Fed Balance Sheet Indicator to our macro lineup. Then we revised this indicator for even greater accuracy in May 2022. Whether the Fed is growing or shinking its balance sheet, our models will take the Fed's actions into consideration when assessing risk.

• Fundamental Indicator Series ($FI) - are derived by doing an analysis of an ETF's individual constituents, including Price/Sales ratio, Price/EPS (P/E Ratio), our proprietary Progressive-Blend S&P 500 Earnings Composite™ (PBEC™), EnterpriseValue/Operating Income Ratio (EV/OpInc), EV/CashFlow Trend, Price/Free Cash Flow Trend, Earnings Yield Trend, Revenue Growth Trend, Earnings Growth Trend, Debt/Equity Trend, Profit Margin Trend by sector, segment, and industry, Debt Service-to-Cash Flow Trend, Relative Earnings Trend (by market segment and sector), and others. We calculate these ratios for every individual stock in the Strategy's Universe ETF to derive a Composite Ratio and Trend for the entire index. This data is then compared to all other ETFs in the universe. This unique technique is not used by other quantitative-strategy designers, to our knowledge.

• Breadth Indicator Series ($BI) - includes Net New Highs Percent, Advancing-vs-Declining Issues Percent, Percent of an ETF's Constituent Stocks above their 250-Day (one year) Moving Average, Percent of an ETF's Constituent Stocks above their 63-day (one quarter) MA, Percent of Index Constituent Stocks above their 21-day (one month) MA, High Beta vs. Low Beta Percent Trend, McClellan Summation Index Score, TRIN (Net Advancing Shares/Net Advancing Volume), Market Segment Relative Strength Comparison, Sector/Segment Fund Flow Trends, and more...

• Sentiment Indicator Series ($SI) - includes the Consumer Confidence trend, Small-Business Confidence trend, Analyst Estimate Trends, AAII Investor Sentiment, Investor's Intelligence Advisor's Sentiment, Advisor Expectations Index, CBOE Options Equity Put/Call trend, Net Smart Money/Dumb Money Confidence Levels, S&P 500 Bullish Percent Index, and more…

• Technical Indicator Series ($TI) - includes our proprietary 'ETFOptimize Composite Technical Indicator™' (CTI), our proprietary Rainbow Indicator™ with Long-Term, Medium-Term, and Short-Term versions, Price-to-200-day MA Breadth Status, Price-to-50-day MA Breadth Status, ETF Relative Strength (by market segment, sector or an ETF's individual-company constituents), S&P 500 RSI trend, Momentum of Trend Indicator, High-Beta/Low Beta Index, Accumulation-Distribution Index, Overbought-Oversold Index, Discounted Volatility Index, BB Composite Indicator, BB Width, RSI Divergence, Chaiken Money Flow, Stochastic Close Indicator, Trend Momentum Indicator, MACD Indicator, RSI Signal, Stochastic RSI Indicator, Volume Positive/Negative Indicator (VPNI)and many others...

• Volatility Indicator Series ($VI) - includes our proprietary Momentum of Fear Index™ (MOF), proprietary Rainbow Crossover (MARC)™ Indicator, Normalized Average True Range, Average True Range Rate of Change, Normalized Volatility Index, Standard Deviation trend, Intraday Volatility trend and Signal Theshold, Volatility-Normalized Rate of Change, Volume Volatility, Bollinger Band Signals (Reversals), BB Width Mean Reversion, Relative Volatility (by market segment or sector), and a plethora of other Volatility Indicator signals. We test each of our technical indicators with various time series to determine the period that is optimal.

Managing Expectations
Some investors, particularly those who are relatively inexperienced, expect the ETFOptimize Premium Strategies to provide a loss-free performance from every ETF selection their Premium Strategy makes. While we try hard to achieve this objective and are arguably far more successful than our peers, investors must realize that selecting 100% winning trades is unachievable. For most investment managers, producing anything more than 50% winners is considered to be a success, and even a negative ratio, such as 40% winners/60% losers can be effective if the average percentage gain of winning trades is substantially more than the average percentage loss of the losing trades.

All algorithmic, rules-based investment models rely on probabilities, with the objective of selecting more winners than losers and higher gains on the winning trades than losses on the losing trades. However, clients must understand that there will always be periods of consecutive losing trades, periods of underperformance, and occasionally even extended periods with persistent portfolio losses. Every day, the stock market represents the decisions of many millions of investors and speculators, and since participants are often driven by emotions driven, there will be periods when your systematic model will be out of synch with the market, no matter how robust it has been in the past.

Investors must accept that money-losing trades are an inherent part of investing. Whether a single trade is a winner or loser is less important than whether your portfolio is a winner over the long term. We recommend a minimum commitment of 20 months to attain a near-100% probability of having a winning portfolio. The longer the commitment, the more likely you'll see significant profits from your ETFOptimize Strategy.

Our models have never experienced a losing year since their inception, but they may sometimes experience losing weeks and months during a year—temporary losses from which they later recover. Losing trades and losing stretches are a normal part of the investment process, but if you stick with your ETFOptimize Premium Strategy, it will invariably recover from down periods and produce substantial gains for your portfolio.

Resources Used
Our indicators require institutional-grade data sets that eliminate survivorship bias and offer accurate point-in-time detail, allowing testing to replicate conditions and prices at the time of all transactions. Each of the data sets used are high-quality (few errors), point-in-time (PIT) data, without survivorship bias. Data is sourced from highly-respected, market-data titans such as FactSet, S&P Global Market Intelligence, Compustat, S&P Capital IQ, ICE Data Services, St. Louis Federal Reserve, and IEX Cloud.

In each Premium Strategy, ETFOptimize utilizes different combinations of uncorrelated indicators listed on this page to generate consistently robust investment signals. When applied to universes of high-liquidity ETFs with low spreads, our Strategies deliver consistent, climbing equity curves – and perhaps most importantly:

- Providing users with profitable performance in 100% of years since inception

– Select an ETFOptimize Premium Investment Strategy that's right for you –