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May ETF Trend Summary

|Includes: DIA, FXI, GLD, iShares Russell 2000 ETF (IWM), OIH, PALL, PPLT, SLV, SLX, XLB, XLE

It was a decisively bearish May for the market and also a memorable one. The DJIA had its biggest monthly drop since in February 2009 and the biggest May point drop in DJIA history (worst % loss since 1962). As we do each month let’s step back and take a look at what major trends emerged or faded during the previous month. In many cases this can provide an good perspective into the next 30-60 days.

Take a look at the ETF heat maps below – we’re looking at May performance alone and YTD of some of the most prominent ETFs. As you can see the May heatmap is covered in bright red, while the YTD is just about unchanged with exception to the extreme underperformers and extreme outperformers. As usual the brightest blocks are usually leveraged ETFs.

Here’s what I see (sound off in the comments below if you notice anything else!):

  • Small Caps (NYSEARCA:IWM) posted the largest loss with Blue Chips (NYSEARCA:DIA) losing the least
  • Energy and Materials were the weakest sectors for 2010 were the weakest in May (XLE, OIH, SLX, XLB)
  • Gold & Oil continue to show EXTREMES in their relationship, which support the performance converging soon. (USO down 17% and GLD up 4%)
  • China (NYSEARCA:FXI) held strong surprisingly well during the May sell-off. It out performed just about every other developed or emerging market ETF in May. For the YTD FXI is still underperforming so this could indicate change in tide for FXI relative performance.
  • Almost all metals Platinum (NYSEARCA:PPLT), Palladium (NYSEARCA:PALL), Copper (NYSEARCA:JJC), Nickel (JJN and Silver (NYSEARCA:SLV) posted losses during May with Gold (NYSEARCA:GLD) posting a gain. This shows the fear or expectation of inflation is tangible.

ETF HEATMAP (May Performance)


ETF HEATMAP (YTD Performance)

ETF Heatmaps Courtesy of FINVIZ

Disclosure: None at time of writing