Entering text into the input field will update the search result below

Gossip on Sector ETF Rankings - May 17, 2011

May 17, 2011 6:27 PM ETXLE, XLB
Diffusion profile picture
Diffusion's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Although I have only a few data points, I think I have some proof to show that ETF ranking does drive short term return, barring any fundamental changes.

For the week starting on May 9th, my ETF ranking put XLB slightly above XLE. And for the first two day of that week, XLB rose 2.31%, slightly higher than the 2.23% rise of XLE. But then both reversed their courses in the rest of the week. By Friday, XLB was down 1.78% for the week, a bigger one than the 1.35% drop of XLE for the week. My guess is that fundamentals deteriorated in materials sector duing that three days so XLB was down more severely for the week. Actually, if you pay attention to this week's Sector ETF ranking article, you'll find that we did see fundamentals deterioration in materials sector in the week before.

The same happened for the first two days of this week. My ETF ranking put XLE slightly above XLB for this week. By today's close, XLE is down 0.76% for the week, relatively better than the 1.53% drop of XLB. As the earnings season is approaching to its end, hopefully we won't see any fundamental changes for the rest of the week. And hopefully XLE will continue to outperform XLB in near future.

By the way, if you are interested in Warren Buffett, I'm writing a series of articles titled as "Wisdom of Warren Buffett". More information available on my blog http://trustamind.blogspot.com/. Please look under the "SERVICES" section to the top right. 

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.