Sector Week-in-Review: Momentum in Transportation and Software

Nick Perry (Schaeffer's Investment Research) submits: Last week we saw a balanced view as most groups finished near breakeven. This week we have a similar picture:

The graph shows a fairly even distribution with the largest moves contained near three percent. Transports were tied with the PowerShares Energy Exploration & Production fund for the top spot while wireless and real estate were the largest decliners.

For a longer-term perspective, the bullets below show how the ETFs listed above have faired over the last six-months, prior to this week. In other words, it shows how they had been performing before this week's move.

Prior Six-Month Returns for This Week's Top Performing Sector Exchange Traded Funds:

* iShares DJ Transportation Average (IYT) +13.1%
* PS Energy Exploration & Production (PXE) -1.7%
* Software HOLDRS (SWH) -11.1%
* PS Software (PSJ) -4.1%
* iShares GS Software (IGV) -8.8%
* Internet HOLDRS (HHH) -23.9%
* SPDR-Materials (XLB) +3.5%
* PS Building & Construction (PKB) -9.1%
* US Oil Fund (USO) n/a
* iShares GS Natural Resources (IGE) +4.2%
* SPDR-Energy (XLE) +3.4%
* iShares DJ U.S. Basic Materials (IYM) +4.7%

Prior Six-Month Returns for This Week's Bottom Performing Sector Exchange Traded Funds:

* PS Media (PBS) -3.3%
* iShares DJ U.S. Telecomm (IYZ) +6.9%
* PS Pharmaceuticals (PJP) -3.2%
* PS Biotechnology & Genome (PBE) -5.7%
* Wilshire REIT Fund (RWR) +9.8%
* iShares DJ Select Dividend (DVY) +0.5%
* iShares GS Networking (IGN) -2.3%
* iShares DJ U.S. Utilities (IDU) +0.6%
* Biotech HOLDRS (BBH) -12.7%
* iShares DJ U.S. Real Estate (IYR) +8.0%
* iShares C&S Realty Majors (ICF) +9.4%
* Wireless HOLDRS (WMH) -0.2%

One of the more interesting twists here is that transports top a list that is sprinkled with oil related stocks and oil itself. Conventional wisdom holds that high oil prices should put a damper on transport stocks, but the IYT was showing a fairly healthy return heading into this week. In fact, a look over the data shows that it had been one of the best performing funds from my list, trailing behind the streetTRACKS Gold (GLD) and PowerShares WilderHill Clean Energy (PBW) funds.