Skip to main content

Sector ETFs showing the most strength - signs this rally has legs?

If you're wondering how broad based the current rally is, this post will highlight some of the sectors that are showing the most price momentum and strength in their up-trends.

We evaluate a selection of what I call "Benchmark ETFs" as proxies for various market sectors. The following list is based on daily data. All these ETFs are showing strong bullish readings for Aroon and DMI which we use to determine how strong a stock or ETF's trend is. In addition, these ETFs are all above their 20-day moving average.

Benchmark ETFBenchmark Index
EEMMSCI Emerging Markets Index
FXIFTSE/Xinhua China 25 Index
IGWDow Jones U.S. Semiconductors Index
IJHS&P MidCap 400 Index
IWFRussell 1000® Growth Index
IWORussell 2000® Growth Index
IWPRussell Mid-Cap® Growth Index
IYCDow Jones U.S. Consumer Services Index
IYMDow Jones U.S. Basic Materials Index
IYWDow Jones U.S. Technology Index
IYZDow Jones U.S. Select Telecommunications Index
QQQQNASDAQ-100® Index

Many of these are no surprise if you are an enthusiastic follower of stock market news. Much has been made of how Emerging Markets have been on a tear and how Materials have been surging. You probably also know that Technology and the NASDAQ led the market up over these last few months since the March lows.

What is somewhat surprising, however, is that the Financial sector is not found on this list. Financials are in the news constantly and many have been recovering from deep declines. Recently, however, the sector has been lagging and the Aroon trend indicator has been weakening.

Another interesting aspect of this list is that there is a pretty fair weighting toward small cap and mid cap and a heavy weighting toward growth. It is often said that these kinds of stocks tend to be the leaders when coming out of bear markets.

So it is clear that we have a wide selection of sectors showing strength at this time. Tech, small cap and mid cap with a smattering of cyclical and large cap. It's a broad based variety that would seem to indicate we have left the bear market lows behind. With leadership from this group of benchmarks it isn't hard to feel bullish. Now if the economy just cooperates...

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what