Every week I like to run a screen on a list of over 800 ETFs and ETNs that I'm tracking to see which areas of the investable landscape are reaching price extremes. I do this to get a sense of where potential bubbles are occurring relative to other investments.
Below is a summary of the top 10 ETFs and ETNs which are furthest away from their respective 200 day moving averages.
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Almost universally across over 800 ETFs and ETNs, nearly all the extremes are in the commodity space. This has been updated as of 11/17/2010. Just last week, for example, cotton (NYSEARCA:BAL) was even further above its 200 day moving average than it is as of yesterday. The same applies to sugar. If there is froth in this market, the message appears to be that it's in commodities as an asset class, particularly when compared to the S&P 500 (NYSEARCA:SPY). It is also worth noting that following the announcement of QE2, the dollar's strength has resulted in many of these ETFs/ETNs falling 10% in just a few days.
Disclosure: The author, Pension Partners, LLC, and/or its clients may hold positions in securities mentioned in this article at time of writing.