Momentum in Silver, Internet Early This Quarter

Nick Perry (Schaeffer's Investment Research) submits: With October drawing to a close this week, and the year-end creeping up on us, I thought I would offer a change of pace from my usual weekly recap of the action and turn your attention to a slightly larger picture.

The chart below shows the leading and lagging funds so far this quarter (click to enlarge):

We are a third of the way through the quarter so it seemed that this would offer a good opportunity to step back see where the money has been flowing. But before we get to that, I thought it was worth pointing out the overall upward bias. My select list of funds shows that more than 80 percent are gaining ground so far this quarter. With the recent new high in the Dow Jones Industrial Average (DJIA - 12,044.4), it would appear that money is now in the mode of chasing stocks.

As far as individual funds, silver tops the list with a quarter-to-date gain of nearly 10 percent. Internet, biotech, basic materials, utilities, media and consumer discretionary round out the remainder of the list. The action in utilities is somewhat interesting. That group is typically known for stodgy action, so the relative outperformance over the last month is worth noting.

Losses this quarter are so far limited to just mild declines, with select technology and financial-related funds overshadowing the list. Semis and networking have so far failed to gain much interest as those groups are severely lagging. However, while those tech groups are usually considered mainstays of the Nasdaq, their underperformance doesn't appear to be hampering the action of the NASDAQ-100 Trust (QQQQ) . The graph below plots the QQQQ relative to some of the other ETFs that track the broad-market indices.

Despite the lackluster action from semis and networking, the QQQQ is holding its own as it outpaces both the SPY and DIA. The small-cap focused IWM is leading, but the QQQQ is within striking distance.

I am sure that the numbers above will change as the quarter wears on. However, tracking and noting the action here may offer a chance to watch trends develop as investors position themselves for the last two months of the year.