Exchange-Traded Fund focus: leading and lagging sector ETFs (IYT, RTH, IWM, IGN, SMH, GLD, IAU)

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 |  Includes: GLD, IAU, IGN, IWM, IYT, RTH, SMH
by: Nick Perry

Nick Perry, who writes about ETFs for Schaeffer's Investment Research, writes:

The graphs below are based on a select list of ETFs and indices that I follow in the blog and show the top and bottom performing groups from last Friday's close through this afternoon (approximately 12:00 PM).

Etf052005etfw

Overall, we see a very strong week as most of the "worst" performing groups still showed gains. The exception was gold, which sufferd only a very slight loss. It is also a somewhat eclectic mix with transports taking the top spot.

And here is where I must admit a bit of ignorance on my part. I actually had to look up the IYT to see what stocks were the top-weighted components. But since I was pulling data I did a little exploring and found an interesting morsel. The table below shows the top-weighted stocks, their return over the past week, and the analysts ratings from Zacks.

Etf052005iyt_2

While the transports haven't been liveliest of groups this year, the IYT does sit within seven percent of its annual high. Yet despite that, the Street is firmly on sidelines, as only 40 percent of total ratings above are "buys." It might be worthwhile to keep an eye on this group to see if the strength seen this week holds. If so, the group has room for upgrades...

I also want to revisit a chart from last week.

Etf052005iwm

Last Friday I noted how the IWM was trading below resistance and perched on short-term support near 115. The broad-based strength this week helped the small-cap proxy bounce off that support. It is now back to challenge resistance. A move above this area would negate some of my concerns about weakening momentum.

Looking to my graph of the major indices shows us how some of the key barometers are moving relative to each other.

Etf052005indexw

Nothing too surprising here as we see a similar picture as what we saw on the ETFs, as only gold failed to participate in the rally.

Finally, I want to turn your attention to some numbers I ran to satisfy my own curiosity. Specifically, I wanted to see what groups had been the best performers since the S&P 500 Index (SPX) bottomed on April 20. Here are the top 20 performing ETFs over that time.

Blog052005etfreturns

As you can, it is a fairly tight race at the top half of the graph, but it is clear that technology-related groups have been where the "hot" money has been flowing to.

To those who closely follow the market on a day-to-day basis, these results probably don't come as too much of a surprise. However, if you are like me, it can useful to occasionally revisit the "obvious"...

Nick Perry (regressionchannels@sir-inc.com)