3 ETFs That Moved While You Were Sleeping

Includes: DIA, GLD, IYT, PXF, XLI
by: Gary Gordon

Conventional commentary on Wednesday, 7/6/2011, described the trading as light and lackluster. Yet S&P SPDR Gold (NYSEARCA:GLD) climbed back above a critical trendline, PowerShares Developed Market Ex US (NYSEARCA:PXF) experienced 30x the normal trading volume and iShares DJ Transports (NYSEARCA:IYT) notched a new 52-week high.

Beginning with the yellow metal, some surmised that the “risk-on” trade would result in a downtrend for S&P SPDR Gold (GLD). After all, GLD had risen a staggering 20% between the three months of late January and late April. Moreover, the share price had remained above a 50-day moving average for four months before succumbing in late June.

The “downtrend” didn’t last very long, though. On 7/6/2011, GLD rose back above its 50-day to close a mere -2.2% from all-time highs.

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GLD 6 months

In spite of the euro losing ground to world currencies, in spite of a downgrade on Portuguese debt, not everyone is disgusted with non-U.S. developed world equities. An institutional investor, or a few money managers, bought $38 million worth of PowerShares FTSE RAFI Developed World ex U.S. (PXF) on 30x normal volume. The fund’s assets under management swelled from roughly $285 million to $323 million - a 13.3% increase in one trading session.

PowerShares FTSE RAFI Developed Markets ex-U.S. tracks an index of the largest developed world stocks (excluding the U.S.) - 1,000 equities that score highly on fundamental measures (e.g., book value, income, sales and dividends). The fundamentally weighted portfolio is rebalanced on an annual basis. PXF remains roughly -5.5% below its April 29 multi-year high.

Perhaps most impressive, iShares DJ Transports (IYT) actually registered a new multi-year high on 7/6/11. Dow Theory proponents would likely declare that the bull market is back in gear, as transporters are hitting new highs before industrials; transporters should surge first because their profits rise as they move “stuff” from manufacturers to big industrial companies.

In other words, the move in IYT suggests that new highs for SPDR Industrials (NYSEARCA:XLI) and/or Dow Industrials Diamonds (NYSEARCA:DIA) is just around the bend. Granted, they may still be a few percentage points off a new peak right now. Still, a 10% jump over two weeks from the transporters is a rather strong sign of bullish momentum for the market at large.

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IYT New Highs

Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.