Energy Sector Drives Market To New Highs

Nick Perry (Schaeffer's Investment Research) submits: I have changed the column around this week. I still have the week's leading and lagging ETFs, but am introducing a "profile" section that delves into an ETF. With the profuse proliferation of ETFs, it is becoming increasingly harder to stay abreast of everything that is out there. My intent it to use this space to dig into the details of a particular fund or to compare and contrast two funds that track the same sector.

So, with that housekeeping out of the way, let's turn our attention to this week's action:

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It was a generally positive week for the market, as 86% of the ETFs on my list ended higher. Most advances were contained near 3% and losses were limited to 2%. All in all, it was a mild week in terms of net movement. In broad strokes, energy, materials, semiconductors, and networking led while consumer, insurance, and real-estate funds lagged.

The exception to the "mild moves" was the action in the PowerShares WilderHill Clean Energy Fund (PBW) . This ETF topped the charts 3 weeks ago and 2 weeks ago and it continues to push to new annual highs. The PBW has been rallying with other energy stocks as we see the SPDR-Energy (XLE) and the iShares DJ U.S. Energy Fund (IYE) near the top of the list as well. As I said a few weeks ago, the stubborn price of oil combined with its headline-grabbing nature make the alternative energy sector one to watch.

The other interesting point is that while energy-related ETFs led, the Oil Service HOLDRS (OIH) showed a loss on the week. The short-term correlation between the OIH and energy ETFs like the XLE tends to be very high so it will be interesting to see if this divergence is just a quick blip.

Index performance this week:

Index performance year to date:

Charts: Google Finance