Domestic Momentum in Clean Energy, Pharm; Internet Sector Slumps (PBW, HHH)

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Includes: HHH, PBW
by: Nick Perry


Nick Perry (Schaeffer's Investment Research) submits: Last week we saw that gains dominated the landscape as semiconductors led a widespread group while bonds, utilities and energy-related funds "rested." This week we see a bit of a reversal:

Mild losses appear to be the theme of the week. Gold, biotech, and pharmaceuticals garnered mild gains while the "clean energy" fund took the lead. It looks as if the PBW rallied into the President's State of the Union Address and popped higher the following morning. However, the fund closed lower that day and has drifted sideways for the past two sessions.

Of the decliners, the standout was of course, the Internet group. At first blush it might be easy to assume that the HHH was hit by the one-two punch of disappointing earnings from first Google (NASDAQ:GOOG), and then Amazon.com (NASDAQ:AMZN). However, that isn't exactly the way it played out. Because of its structure, and the fact it was created years ago, the HHH does not include GOOG as a component. The HHH actually closed higher on the day GOOG gapped lower. But it could not escape the gap lower in AMZN's shares.

For a longer-term perspective, the bullets below show how the ETFs listed above have faired during the past six months, prior to this week. In other words, it shows how they had been performing before this week's move.

Prior Six-Month Returns for This Week's Top Performing Sector Exchange Traded Funds:

* PS WilderHill Clean Energy (NYSEARCA:PBW) +24.2%
* streetTRACKS Gold (NYSEARCA:GLD) +27.6%
* Biotech HOLDRS (NYSEARCA:BBH) +1.9%
* iShares Nasdaq Biotech (NASDAQ:IBB) +6.2%
* PS Pharmaceuticals (NYSEARCA:PJP) +6.7%
* PS Aerospace & Defense (NYSEARCA:PPA) n/a
* Telecom HOLDRS (NYSEARCA:TTH) -0.9%
* iShares Lehman 20+ Year Bond (NYSEARCA:TLT) -1.3%
* iShares S&P MidCap 400 Growth (NYSEARCA:IJK) +10.8%
* MidCap SPDRS (NYSEARCA:MDY) +9.4%
* PS Semiconductors (NYSEARCA:PSI) +22.1%
* PS Zacks Micro Cap (NYSEARCA:PZI) n/a

Prior Six-Month Returns for This Week's Bottom Performing Sector Exchange Traded Funds:

* iShares GS Software (NYSEARCA:IGV) +4.5%
* iShares DJ U.S. Energy (NYSEARCA:IYE) +14.7%
* iShares DJ U.S. Technology (NYSEARCA:IYW) +6.3%
* iShares GS Semiconductor (IGW) +15.5%
* PS Software (NYSEARCA:PSJ) +14.0%
* Utilities HOLDRS (NYSEARCA:UTH) +3.6%
* Pharmaceutical HOLDRS (NYSEARCA:PPH) +0.3%
* iShares GS Technology (NYSEARCA:IGM) +6.9%
* NASDAQ 100 Trust (QQQQ) +6.7%
* Oil Service HOLDRS (NYSEARCA:OIH) +32.1%
* SPDR-Energy (NYSEARCA:XLE) +17.1%
* Internet HOLDRS (NYSE:HHH) +2.9%

Last week I noted that while the PBW had lagged the more traditional Oil Service HOLDRS (OIH), it appeared to be gaining momentum. That continues to be the case, but given the post-State-of-the-Union-reaction, I am curious to see if the group can hold the recent gains.

It's also worth noting the strength in gold during the past six months. While many of you are probably already aware of that, I think its still worth mentioning.