Sector Week-in-Review: Momentum in Software, Telecom While Metals Lag (SWH, TTH, GLD, SLV)

Includes: GLD, SLV, SWH, TTH
by: Nick Perry

Nick Perry (Schaeffer's Investment Research) submits: Last week we saw that losses dominated as only the TLT was able show a noticeable gain. This week we find a slightly more balanced view:

Based on this graph you might be temped to conclude it was a quiet week for everything but silver and gold. This is of course not true. Weakness in the first part of the week was offset by the rally we saw on Wednesday and Thursday and left most groups near the "two percent" range in terms of how far they deviated from breakeven.

For a longer-term perspective, the bullets below show how the ETFs listed above have faired over the last six-months, prior to this week.

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

* Software HOLDRS (NYSE:SWH) -13.7%
* Telecom HOLDRS (NYSEARCA:TTH) +6.8%
* iShares DJ Transportation Average (BATS:IYT) +11.2%
* Retail HOLDRS (NYSEARCA:RTH) -6.5%
* Semiconductor HOLDRS (NYSEARCA:SMH) -15.5%
* AMEX Diamonds (NYSEARCA:DIA) +0.4%
* SPDR-Technology (NYSEARCA:XLK) -8.6%
* iShares DJ U.S. Technology (NYSEARCA:IYW) -9.6%
* iShares GS Software (BATS:IGV) -10.7%
* SPDR-Industrial (NYSEARCA:XLI) +4.3%
* iShares DJ U.S. Telecomm (BATS:IYZ) +4.2%
* PS Pharmaceuticals (NYSE:PJP) -4.2%

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

* PS Utilities (NASDAQ:PUI) +5.0%
* PS Zacks Micro Cap (NYSE:PZI) +5.0%
* iShares DJ U.S. Financial (NYSEARCA:IYF) +2.2%
* PS Water Resource (NASDAQ:PHO) +5.5%
* US Oil Fund (NYSEARCA:USO) n/a
* Wilshire REIT Fund (NYSEARCA:RWR) +7.9%
* iShares DJ U.S. Financial Services (NYSEARCA:IYG) +3.1%
* Regional Bank HOLDRS (NYSEARCA:RKH) +4.3%
* SPDR-Financial (NYSEARCA:XLF) +1.6%
* PS WilderHill Clean Energy (NYSE:PBW) +16.6%
* streetTRACKS Gold (NYSEARCA:GLD) +17.0%
* iShares Silver Trust (NYSEARCA:SLV) n/a

Painting the action in board strokes, we had strength in technology and blue-chips with weakness in financials and commodities. The pullback in gold has definitely had an impact on the momentum in the yellow metal. In past columns we discussed the strong intermediate-term uptrend and here we see that eroding. And speaking of eroding, note the action in technology. While these funds showed small gains this week, they have struggled over the last six months.