Leading and lagging sector ETFs (XLE, TLT, ICF, RWR, IYR, OIH, SWH, PPH, IBB)

by: Nick Perry

The graphs below are based on a select list of ETFs and indices that I follow, and show the top and bottom performing groups over the week to Friday afternoon (approximately 1:30 PM), writes Nick Perry, who covers ETFs for Schaeffer's Investment Research.


For the most part we see that the holiday shortened trading week was quiet and moves were capped near two percent on both sides. One of the interesting points that stands out is the bond related ETF, the TLT.


As you can see, this week's gains have helped push the TLT past its best levels from earlier this year and toward its all-time high near 97. You can also see a fairly strong upward sloping channel that describes this trend.

One of the names that caught my eye is the Energy Sector SPDR (NYSEARCA:XLE).  Three weeks ago we looked at the weekly chart below.


When we last looked at this graph, I said was keeping an eye on the zone just above 36 that marked the late-2004 top. The ETF has bounced off this level and retaken the 20-week moving average. On a short-term basis, I have been watching the daily chart in the  blog. On May 23 I posted this chart and said:

Here you can see a downtrending channel, the 50-day moving average and a congestion zone near 40. I wouldn't call any of these measures a silver bullet, but I do like to use them as a way to measure when a trend may be changing. For now, the XLE is still locked in a short-term downtrend as it trades below its 50-day trendline. A move above this congestion would be the first sign of strength, but the upper rail of the channel (which is aligned with the moving average) is what I will be watching for as a break may offer that the selling pressure has run its course.

Here is how that chart stands now...


While a small pullback here would not be out of the question, it appears that the XLE has now broken the downtrend and retaken it 50-day trendline.

Looking to my graph of the major indices shows us how some of the key barometers are moving relative to each other.


This perspective shows that the major market indices such as the SPX and COMP were relatively flat this week. Money flowed toward gold, brokers, and bonds and away from biotech and drugs.

As I said when I introduced this column, it may seem like simplistic information, but my experience has been that many times we overlook the basics. Just knowing this data tells me that which groups have held up and which have seen money outflows.

Nick Perry (regressionchannels@sir-inc.com)