Nick Perry (Schaeffer's Investment Research) submits: Last week we saw a continued decline in energy, while many other groups were able to bounce. This week, we find a downside bias, as 59 percent of my list trades lower:
Aside from the percent of funds losing ground we also see that the magnitude of losses was greater. The SPDR Homebuilders (NYSEARCA:XHB) was the largest gainer, but only managed to tack on a little more two percent. Meanwhile, the smallest loss on the graph, the Internet HOLDRS (NYSE:HHH), showed a drop of three percent. In broad strokes it looks like we had a minor bounce in energy, while Technology-related ETFs were hit hardest. Semiconductors, in particular, were weak as the Powershares Semiconductors (NYSEARCA:PSI), Semiconductor HOLDRS (NYSEARCA:SMH), and iShares GS Semiconductor (IGW) funds gravitated to the bottom of the graph.
Looking over the charts below shows an interesting situation on XHB. (Note - details about the indicators used in these charts can be found at the bottom of this column.) I have talked about the housing group in the past, noting how the ETF has held its ground in the face of some gloomy headlines. This week's outperformance is helping to bounce the XHB off its 50-day moving average. The ETF has generally trended higher off its July bottom and this bounce appears to mark the end of the pullback from the best levels of December. The peak from last month, near 39, would be a potential short-term resistance level to keep in mind.
Each chart features the 50-day moving average and a 9-day relative strength index [RSI]. I use the moving average (the green line) as a simple way to gauge trends and the RSI (red line below the price) suggests whether the ETF is overbought or oversold. (More information about using the RSI can be found here.)
Year-to-date performance of Dow, Nasdaq Composite and S&P 500: