Negative Market Momentum in Real Estate, Semis and Software, but Gold Looks Good (ETFs: IYR, IGW, SWH, GLD, IAU)

by: Nick Perry

Two weeks ago, writes Nick Perry, who covers ETFs for Schaeffer's Investment Research, we saw that momentum had reversed course with only gold gaining and a tight bunching of ETFs losing around two percent. This past week we see that momentum to the downside has accelerated as three of the "best" performing ETFs still lost more than one percent. The small handful of ETFs from my list that were able to hold above breakeven this week came from the gold, energy, and bond areas. It is also worth noting we once again see a rather "tight cluster" of losses. I interpret this as a sign of "generalized" selling.


ETF comparison

As usual, the bullets below show the year-to-date returns for the ETFs listed above.

Year-to-Date Returns for This Week's Top Performing Sector Exchange Traded Funds:

  • iShares Treas Bond (NYSEARCA:TLT) +4.7%
  • Energy Sector SPDR (NYSEARCA:XLE) +44.9%
  • streetTRACKS Gold (NYSEARCA:GLD) +5.5%
  • iShares COMEX Gold Trust (NYSEARCA:IAU) n/a
  • Oil Service HOLDRS (NYSEARCA:OIH) +41.2%
  • iShares Energy (NYSEARCA:IYE) +39.5%
  • iShares Natural Resource (BATS:IGE) +35.9%
  • iShares Transport Average (BATS:IYT) -6.0%
  • Internet HOLDRS (NYSE:HHH) -18.6%
  • Industrial Sector SPDR (NYSEARCA:XLI) -4.7%

Year-to-Date Returns for This Week's Bottom Performing Sector Exchange Traded Funds:

  • Biotech HOLDRS (NYSEARCA:BBH) +25.5%
  • iShares Financial Svcs (NYSEARCA:IYG) -6.7%
  • iShares Utilities (NYSEARCA:IDU) +16.0%
  • iShares Russell 2000 (NYSEARCA:IWM) -0.0%
  • Wilshire REIT Fund (NYSEARCA:RWR) +4.5%
  • iShares C&S Realty Majors (BATS:ICF) +5.6%
  • iShares Basic Materials (NYSEARCA:IYM) -6.4%
  • Software HOLDRS (NYSE:SWH) -12.3%
  • iShares Semiconductor (IGW) +7.0%
  • iShares Real Estate (NYSEARCA:IYR) +1.6%
One of the things I am watching is the action in gold. It has been one of the best performing ETFs for the last two weeks but on a year-to-date basis it doesn't appear to be overdone. But what caught my eye was the "dismissal" of strength that I noted in this Schaeffer's Daily Contrarian article,
Is Wall Street Ignoring Gold's Luster?.

As a contrarian, I am always interested when strong price action is discounted because I believe it signals that potential sideline money still exists. GLD did push into a short-term overbought condition, so a pullback may be likely. However, it would seem that the overall prospects still look interesting.

Nick Perry (regressionchannels@sir-inc.com)

Related:

  • Articles about the gold ETFs, GLD and IAU.
  • ETFs mentioned in this article (clicking on a link pulls up articles for the ETF in question): IYR, IGW, and SWH.
  • Other articles from The Gold Stock Blog (in beta, though the RSS feed is up and running).

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