Momentum in Semis, Software; Biotech, Retail Lagging (SMH, IGW, SWH, IBB, RTH)

Includes: IBB, RTH, SMH, SOXX, SWH
by: Nick Perry

Nick Perry (Schaeffer's Investment Research) submits: I was somewhat surprised when I saw that most sectors saw little net movement last week, as the action had seemed somewhat volatile:

However, after thinking it through, I realized that we saw the broad market sell-off earlier in the week and then rally back Thursday, so the moves tended to cancel out. I wouldn't call it a "quiet" week, but the net moves were mostly small, while the overall picture is fairly balanced. Semis, software, and gold took the lead while biotech, retail and internet lagged.

For a longer-term perspective, 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:

* Semiconductor HOLDRS (NYSEARCA:SMH) +16.8%
* iShares Semiconductor (IGW) +19.0%
* Software HOLDRS (NYSE:SWH) -5.1%
* streetTRACKS Gold (NYSEARCA:GLD) +14.5%
* Materials Sector SPDR (NYSEARCA:XLB) +1.3%
* iShares COMEX Gold Trust (NYSEARCA:IAU) N/A
* Oil Service HOLDRS (NYSEARCA:OIH) +51.3%
* iShares Basic Materials (NYSEARCA:IYM) +2.1%
* iShares Technology (NYSEARCA:IYW) +6.9%
* Technology Sector SPDR (NYSEARCA:XLK) +4.4%

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

* iShares Treas Bond (NYSEARCA:TLT) +1.1%
* iShares Transport Average (NYSEARCA:IYT) +8.7%
* Wireless HOLDRS (NYSEARCA:WMH) +1.3%
* iShares Financial Sector (NYSEARCA:IYF) +4.8%
* Financial Sector SPDR (NYSEARCA:XLF) +4.8%
* iShares Financial Svcs (NYSEARCA:IYG) +1.9%
* Regional Bank HOLDRS (NYSEARCA:RKH) -0.2%
* Internet HOLDRS (NYSE:HHH) -4.0%
* Retail HOLDRS (NYSEARCA:RTH) -1.2%
* iShares Nasdaq Biotech (NASDAQ:IBB) +1.8%

In my last column we revisited the theory that technology related groups tended to be where the buyers have to flocked to off of bottoms, and it seems that semis continue to come on strong. Their year-to-date performance is now hitting levels that might catch the attention of those looking for momentum, so it will be interesting to see if we have a year-end run...

Nick Perry (