Below is a summary of sector performance for the week of September 14th-18th. Conglomerates, the smallest of the group based on the number of stocks, was the best performer. The sector was led by Gencorp and GE, up 14.4% and 13.17% for the week.

On a forward looking basis, healthcare still looks like the most attractive based on valuation. However, one should watch Washington closely in the coming weeks as any healthcare bill could lead to added volatility in the sector. (For momentum based portfolio strategies, please visit Scott's Investments.)

Barron's had a fascinating article this weekend about something called medical tourism. The basic idea as put forth in the article is that US insurance companies are slowly starting to encourage policy holders to go abroad for medical procedures. The costs are shockingly cheaper than the US. Barron's said that the costs, including flying there with a companion, having a short stay and getting the procedure, could be half or even less than half the cost of the same procedure in the US.

The concept is a new one on me and I find it fascinating. The typical context along these lines in past blog posts has been, if you move to a foreign country what would you do for medical care? While I have no plans to move anywhere, there is something intellectually intriguing about living in New Zealand or Uruguay or the like. So the idea of medical service in another country is fascinating (repeated from above for emphasis).

For most investors, the typical rules of investing have been shattered. You may be astonished at the rise of stocks and ETFs since the market’s March 9 low. If you believe the market may be overextended, there are some ways to play it.

The stock market cycle typically runs ahead of the economic cycle and in the markets, sectors typically gain ground at uneven paces. Over this past uptrend, some sectors are performing as one would expect. Others, such as industrials and metals, are surprising investors. Those areas tend to recover in the latter stages, states Mitchell Corwin of Morningstar.

Global sector ETF performance update for the close of August is below. Note that all ETFs are above the 200 day moving average. The top three at the end of August are IXG (financials), IXN (technology) and RXI (Consumer Discretionary). I have previously discussed some possible strategies using this data on my blog.

The momentum strategy that an investor could implement would be to purchase the best returning Global sector ETF(s) over the trailing 3, 6, and 12 months. This strategy has been written about extensively by Mebane Faber, author of The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets.

It’s baaaaaaaaack. Or maybe more accurately, swine flu never left.

The H1N1 virus, which has caused widespread concern on at least two occasions over the last year, is back in the headlines as many parts of the world begin to gear up for the traditional flu season. In recent days and weeks, we’ve seen a number of high profile indications that the deadly virus didn’t simply retreat into the distance:

Here is a list of 73 exchange traded funds with at least $100 million market-cap, at least $1 million daily Dollar trading volume, and at least 3% annualized last dividend yield.

click image to enlarge

Healthcare reform has been in the news a lot lately, with constant finger-pointing, debate, and competing versions of comprehensive bills. Although the passage of comprehensive reform appears to be less certain than it was only weeks ago, it remains likely that major changes are coming before the end of the year.

While many specifics are still up in the air, it is becoming clear that the outcome of this issue could make a major impact from Main Street to Wall Street.

Global sector ETF performance update for the beginning of August is below. Note that all ETFs are above the 200 day moving average. The top three at the end of July are IXG (financials), MXI (materials), and IXN (technology). I have previously discussed some possible strategies using this data on my blog.

The momentum strategy that an investor could implement would be to purchase the best returning Global sector ETF(s) over the trailing 3, 6, and 12 months. This strategy has been written about extensively by Mebane Faber, author of The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets .

Our ETF Update typically takes a sector-based look at the market, and spotlights a particular choice. This week is a bit different. Last week's signal to go short was a big loser. It calls for deeper consideration. We have whimsically called this a trip to the couch with Dr. Brett Steenbarger. (While we enjoy an occasional meeting for coffee with Brett, the advice given here comes from his blog, not a specific consultation:)

I gave an example earlier this week of a US sector rotation system using ETFs. This portfolio strategy uses the same rules, only with the iShares Global Sector ETFs. The momentum strategy that an investor could implement would be to purchase the best returning Global sector ETF(s) over the trailing 3, 6, and 12 months. This strategy has been written about extensively by Mebane Faber, author of The Ivy Portfolio.

I decided to use the results as of today's close, rather then June 30th like my previous post. The top 3 Global Sectors in order are IXN, RXI, and KXI. The full results are below:

On Tuesday, the Congressional Budget Office [CBO] released a preliminary analysis of the House health bill, also known as the Tri-Committee bill. Among the key findings:

1. The bill uses five levers to increase health insurance coverage:

America’s health care system is broken, but President Obama inspires little confidence with his fix.

Health care absorbs 18 percent of GDP—about 50 percent more than in other wealthy countries. Prices are too high and are a terrible burden on jobs creation.

Last Thursday, the World Health Organization (WHO) labeled the swine flu with the fear-provoking word, "pandemic." It's the first time that the label has been attached to a strain in more than 40 years.

The swine (pig) flu has been diagnosed in 30,000 cases worldwide, resulting in 144 deaths. It seems to have surpassed its predecessor, avian (bird) flu, in both coverage, concern and incidence.

The World Health Organization on Thursday informed its member nations that it is declaring an H1N1 (aka "Swine Flu") pandemic. The declaration of a flu pandemic, the first since 1968, means that the WHO believes a global outbreak of H1N1 has begun. As a result of the declaration, all countries, including those with no reported cases, will be required to launch pandemic-prevention plans. "At this early stage, the pandemic can be characterized globally as being moderate in severity,'' WHO said in the statement. "(We) remain in close dialogue with influenza vaccine manufacturers.''

As media coverage dwindled, the swine flu threat faded from the minds of most Americans, despite warnings that we weren't out of the woods yet. Many believed that the virus could return with a vengeance come flu season, but it appears that even those predictions may have been optimistic. On Wednesday, the WHO announced that 74 countries had reported 27,737 cases of H1N1, including 141 deaths. About half of the confirmed cases are in the U.S. In Australia, the number of reported cases has tripled in the last week, drawing the attention of the WHO as it evaluated the severity of the threat.

One of the issues affecting analysis of the market lately is that so many stocks have been in steep up-trends. This means that the Trend Leaders list is pretty big each time we run it, often listing well over 1000 entries. The sheer volume sometimes makes it difficult to pick out the stocks of interest. That is why I have implemented functionality to allow you to sort the data. Still, I realize that may not be enough.

Spotlight on today's leaders --

Owning multiple funds with close correlations is mostly wasted effort and potentially self-deception. Owning multiple funds with a significant correlation spread can be helpful in reducing overall portfolio volatility.

Here is a table with the 6-month correlation of daily returns of selected iShares ETFs with at least 6 months of history (as of April 21, 2009), as rendered by the iShares website.

There isn't going to be a global depression. You can bank on that... literally.

While GM's (GM) bailout uncertainty pummeled stocks and commodities on yet another manic Monday, the greater reality is that the U.S. is pumping $2,000,000,000,000 into the credit markets. The U.S. has also allocated enormous sums to the banks via TARP 1.0 and will likely give more via TARP 2.0. What's more, we have one of the largest spending packages in our history AND we have scores of help-the-housing-market projects.