Turbulence or top?/Sector ETF winners and losers
While last week’s sell-off may be a sign to expect increased turbulence ahead, it did little to change the positive intermediate-term trend picture for all the major market indices. Even the iShares MSCI Japan Index – which had been negative – is now positive.
That said, there’s certainly room for the market to correct further without significantly damaging the current uptrend. Near term support is about 1375-1380 for the S&P 500 and 2370-2380 for the Nasdaq. Any break below 1350-1360 on the S&P 500 or 2350 on the Nasdaq, however, would be a concern.
Sector ETF Highlights
Of the 11 sector ETFs I currently follow, most – like the rest of the market – are positive, but showing varying amounts of near-term weakness. There are, however, three positive standouts, and one negative standout:
Energy has once again taken the lead as one of the strongest performing sectors, as represented by the Energy Sector SPDR (XLE):
The related Oil Services HOLDRs (OIH) is also of course performing well:
Currently tied with energy for the best performing sector is the utilities sector, as represented by the Utilities Sector SPDR (XLU):
The only sector ETF I follow that currently has an all-negative trend picture is the Semiconductor HOLDRs (SMH):
New positions
Despite having 16 limit orders in place to sell puts last Monday, none were triggered, even though many of the underlying stocks fell to or very close to my target prices. This could be just a sign of underlying market strength, or it might be suggesting some complacency (i.e., lack of fear) among market participants – a cautionary sign.
In any case, finally, last Friday I sold some December 67.5 puts on Amgen (AMGN) as it fell below 70:
While the stock may be at a support level here (69-70), it seems likely that it may fall further in the near term. The next lower support levels appear to be about 67-68, and below that, about 64-65. Long term I’m comfortable owning AMGN (if it’s put to me), but admittedly lately it hasn’t been a performer.
Watchlists
New additions to the “upside strength” list include ASA Limited (ASA), Campbell Soup (CPB), Eagle Materials (EXP), Fremont General (FMT), GlobalSantaFe (GSF), KLA-Tencor (KLAC), Nicor (GAS), Plum Creek Timber (PCL), and Taiwan Semiconductor (TSM).
Current and new additions to the “oversold” list include Crane (CR), Frontline (FRO), Humana (HUM), MGIC Investment (MTG), and Pengrowth Energy Trust (PGH).
