We are strong believers of sentiment as a tool in helping to time buys and sells correctly. By using the Ned Davis Research Crowd Sentiment Poll for Energy Futures one can see that historically, by buying oil when sentiment was 42.4 and below, annual gains would be 14.9 percent, compared with buying oil when sentiment is above 67.8, resulting in an annual loss of 6.7 percent. Between the two the annual gain has been 7.4 percent.

With oil breaking out to a new 2009 rally high this morning ($73.98), we thought we would bring readers up to speed with regard to investor sentiment towards oil. We can see from the chart below that monitoring sentiment in the oil patch since the uptrend began in 1999 with oil priced at about $12 has benefited investors. Last summer when oil was climbing its Icarus path towards $200 a barrel, oil reached its highest extreme optimism sentiment at 85.3 and its "Surprising-Not!" collapse to $30.8 resulted in sentiment falling to a near record low in pessimism at 19.6.

Exceptionally rich in natural resources and currently among the world’s top 10 largest economies, investment in Russia (via the Market Vectors Russia ETF Trust - RSX) might seem like a good long-term play. But is it?

We would argue that demographically, no, Russia is a horrible long-term investment because it’s losing population at a percentage rate that could within 40 years match that of medieval Europe’s population loss during the plague years.

Global Energy ETFs
iShares S&P Global Energy Sector Index Fund (IXC)

Greenspan, Stock Jockey

Gee, and I thought he was a bond guy. Things were going along pretty smoothly until Greenspan started talking up his short position [who's he kidding!] in Chinese stocks by saying that a "dramatic contraction" could occur. He didn't have much affect on U.S. stocks [maybe a day or two] when he uttered the famous "irrational exuberance" line in 1996. But who knows, maybe he has more influence apart from his previous official role. So it's Greenspan Unplugged.

The NASDAQ and Small-Caps had their turn, while the DJIA took a break. This is encouraging for bulls IF it holds.

Rydex Equal Weight Sector ETFs
Rydex S&P Equal Weight Consumer Discretionary ETF (RCD)
Rydex S&P Equal Weight Consumer Staples ETF (RHS)
Rydex S&P Equal Weight Energy ETF (RYE)
Rydex S&P Equal Weight Financials ETF (RYF)
Rydex S&P Equal Weight Health Care ETF (RYH)
Rydex S&P Equal Weight Industrials ETF (RGI)
Rydex S&P Equal Weight Materials ETF (RTM)
Rydex S&P Equal Weight Technology ETF (RYT)
Rydex S&P Equal Weight Utilities ETF (RYU)

What Are They?

Homebuilders having some problems? And here I thought they were "value plays" according to some prominent Wall Street analysts. The one thing that seems so amazing is that no one seemed to take seriously any of the warnings, not to mention insider selling, issued by CEOs of all these firms. It's bizarre on the surface, but perhaps just reflects the high levels of cash rationalizing investments.

David Fry (ETF Digest) submits:

Equity markets were pushed higher with action heavily dominated by program trading which as of the latest readings accounts for 34% of all NYSE volume. So the computers are still dominant players.

Roger Nusbaum submits: Rydex issued nine sector ETFs that are equal-weighted. This differs from the other sector ETFs that weight by market cap or some fundamental screen. The result of market cap weighting or most fundamental weighting is that the largest stocks have the heaviest exposure, even in the fundamental funds. For example Exxon Mobil makes up 23% of the RAFI Energy ETF (PRFE), GE is 20% of the RAFI Industrial ETF (PRFN), although I will say that the RAFI Financial ETF (PRFF) is not lopsided in this manner.

The equal-weight funds offer access to sectors in a way that should be different than what exists now. I wrote an article for TheStreet.com that you can read here without a subscription that goes into more detail about the composition method.