Energy, Smallcaps Lead Pre-Holiday Rally

This week we have a bounce with just over 80% of my list showing a gain:

The PowerShares Energy Exploration & Production Fund (PXE) "officially" tops the list but there really wasn't much in the way of standout action as the gains were tightly clustered. In broad strokes we had leadership from energy, commodities, small caps and select technology. The iShares Silver Trust (SLV) and PowerShares Water Resource (PHO) joined the iShares DJ U.S. Energy (IYE) and various oil service funds on the top of the list.

Last's column noted the PowerShares WilderHill Clean Energy (PBW) had ticked to a new high today and I said I continued to believe this is an interesting group to watch. The PBW added to those new highs this week and my thoughts remain the same.

A look to the bottom of the list shows a number of small losses, but I believe some of those are actually the result of dividends. For example, I show the SPDR-Financial (XLF) as going ex-div Friday.

Perhaps the most interesting fund on my list is the iShares Russell 2000 Index Fund (IWM). This ETF tracks the Russell 2000 (RUT), a measure of small-cap stocks. We usually don't find the IWM at either end of the chart above so it would suggest the group was especially strong.

Index performance this week:

Index performance year to date:

Comments

[Greg Pinelli:]

This is nothing more than mindless trend following and up tick sniffing....I wouldn't quit your day job..unless, of course, this is it..because it's of no value. Zero.

2007 Dec 22 09:03 PM

[gordon:]

I am very skeptical also, due to gap-up shortcovering ahead of options expiration on Friday, this is a favorite game of hedgefunds preying on the etfs with the largest short interest, like the Russell 2K, it's trading desks at the broker-dealers mounting a year end windowdressing effort, and Paulson's PPT funneling who-knows-how-much in repo funds to keep the markets up artificially, suspiciously hitting the DIA with big block buying at 1:30 est, the lowest volume of the day, and surprisingly closing the SPY exactly a tick above the 50-day moving average, this crap doesn't happen by accident, sorry.

2007 Dec 23 02:08 PM

[rafael:]

Actually, I think the author should pull this article. One cannot take it seriously, despite his best intents, since I have found numerous, material inaccuracies that cast doubt on the validity of the data and charts.

I have noticed that PZD (The PowerShares Cleantech Portfolio) was excluded from the list of top performers despite the fact that PZD outperformed at least one of the ETFs (WMH) listed. Last week, PZD rose 3.22% (the appreciation from the previous Friday’s adjusted close and the correct way to measure weekly price appreciation, period). So looking at the graph and checking the numbers, it’s clear that the returns for IJR and SLV were understated and those for WMH were overstated. I didn’t check the rest but when one find three errors in such a small sample population, it’s safe to say that the data set should be abandoned post haste. FYI, none of the ETFs I mentioned had distributions last week.

My one caveat is that my data source is Yahoo Finance, which in my experience, has had erratic data quality (especially with regard to data sourced from Capital IQ), but has been better on price data.

2007 Dec 23 02:47 PM