Saturday, May 30, 2009

ETF Rewind - Week 22 (05/29/09)

(Click Image to Enlarge/ Glossary)

It was another choppy but positive week for equities with the S&P500 (SPY) gaining an impressive +3.9% during the holiday-shortened week. This move put the index well above its simple 10-month moving average for the first time in over a year (although it remains just slightly below its 200-day).

In fact, gains were posted across all asset classes, with only the US Dollar showing mild weakness (UUP -0.8%). Note, however, how the reflation trade has nearly all commodities and correlated emerging market ETFs, such as DBC and EEM, looking very short-term overbought under the Price Index columns.

Week Twenty-Three of 2009 features another busy earnings and economic calendar, including the important Friday Jobs report:

Volume was very light during most of May, and it is easy to imagine a scenario where institutional money now begins to reenter equities after price having consolidated through time alongside all of the major indices having moved above -- or nearly above -- that magic 200-day line in the sand.

However, that is merely the technician's perspective. Last week's sector leadership was less than inspiring, equities are slightly short-term overbought, the economy remains off-track, and bonds could start competing with equities at current (rising) rate levels. The light volume contributed without a doubt, but it is really no wonder we witnessed such repeated sharp, fast breaks last week given these vastly opposed perspectives! Enjoy Your Weekend!

Never Investment Advice

If you are interested in a significantly more thorough version of this weekly summary, consider taking a look at Market Rewind's new nightly
ETF Rewind Pro service (free trial). In addition to coverage of over 170 ETFs across twelve major asset classes, you will find three model portfolios, daily market signals and commentary, pairs trading and various portfolio management tools.


ANNE-MARIE said...

Love the new color and chart format ...much easier to read, more more aesthetically pleasing

Jeff Pietsch CFA said...

I have clarified the titling of price versus the 10-month moving averages.