5 Post-Thanksgiving Breakout ETFs

You have to go back to the 1930s to find a consecutive, 5-day rally with percentage gains as impressive as the '08 Thanksgiving surge. Not surprisingly, then, today's December 1 plunge was practically pre-ordained.

Nevertheless, investors looking to put money back to work incrementally over the course of a "deep recession" might wish to ponder sector stand-outs; that is, for the first time in months, there were a number of stock ETFs that climbed above short-term trendlines.

5 Stock ETFs That Climbed Above Their Respective 50-Day Moving Averages
				50-Day		Annual Yield
iShares Global Telecom (IXP)				0.01		6%
SPDR Pharmaceuticals (XPH)				0.16		1.70%
Utilities SPDR Select (XLU)				1.44		4%
WisdomTree Small Japan (DFJ)				3.29		2%
Market Vectors Gold Miners (GDX)				4.85		4.20%

There are "themes" that make sense in the potential strength in these areas. For example, traditional defensive segments like drugs and utilities may be receiving inflows. In fact, there was a time that telecommunications was considered defensive.

And then there's the yield-hungry play. With 10-year treasuries yielding historic lows of 2.8%, it's not hard to see why investors may be intrigued with Telecom (IXP), Miners (GDX) and Utilities (XLU). (Read "Sector ETFs With Higher Yield and Relative Protection.")

The strength that may be brewing in Small-cap Japan (DFJ), however, is entirely a valuation-based endeavor. More than half of the small-cap Japanese stocks on major indexes are trading at or below book value. (Read more about "Small Japan" here.)

If there's a single enigma in the "Breakout ETFs" from the T-Giving surge, it may be the Market Vectors Gold Miners (GDX). This ETF tracks an index of publicly traded companies involved primarily in mining for gold and silver.

Granted, gold has held up far better than most commodities; yet, the broader metals and mining proxy, SPDR Metals/Mining (XME) is still down more than 70% from its peak. Are the companies tracked by GDX really all that different from those tracked by XME... or are the underlying commodities determining the fate of the common stock?

Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Advisor with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.

Comments

[User 301818:]

THESE ARE FALSE BREAKS! Half of them ocurred on Black Friday, very light volume. Do not look for GDX XLU to do anything.

2008 Dec 02 08:22 AM